NEW YORK, Oct. 16, 2020
/PRNewswire/ --
|
|
Revenue down
<1%
|
|
EPS down
8%
|
|
ROE
9%
ROTCE
17% (a)
|
|
CET1
13.0%
Tier 1 leverage 6.5%
|
|
|
|
|
|
|
|
|
The Bank of New York Mellon Corporation ("BNY Mellon") (NYSE:
BK) today reported:
|
3Q20
vs.
|
|
3Q20
|
2Q20
|
3Q19
|
2Q20
|
3Q19
|
Net income applicable
to common shareholders (in millions)
|
$
|
876
|
|
$
|
901
|
|
$
|
1,002
|
|
(3)
|
%
|
(13)
|
%
|
Diluted earnings per
common share
|
$
|
0.98
|
|
$
|
1.01
|
|
$
|
1.07
|
|
(3)
|
%
|
(8)
|
%
|
Third Quarter
Results
|
|
CEO
Commentary
|
|
|
|
Total revenue of
$3.8 billion, decreased less than 1%
• Fee revenue
decreased 1% •
Impacted by money market fee waivers
• Net interest
revenue decreased 4% •
Decrease would have been 8% larger due to the impact
of
the 3Q19 lease-related impairment
Provision for
credit losses of $9 million
Total noninterest
expense of $2.7 billion, increased 4%
• 3% of the
increase driven by the 3Q19 tax-related reserve
reduction
• Continued
investments in technology
Investment
Services
• Total revenue
decreased 4%
• Income before
taxes decreased 17%
• AUC/A of $38.6
trillion, increased 8%
Investment and
Wealth Management
• Total revenue
increased 3%
• Income before
taxes decreased 17%, driven by 3Q19
tax-related
reserve reduction
• AUM of $2.0
trillion, increased 9%
Capital
• CET1 ratio
13.0%; increased ~ 40 bps in 3Q20 • CET1 and Tier 1
capital increased $1.14 billion in 3Q20
|
|
"Our third quarter
results reflect the resilience of our business model despite the
significant impact of lower rates and associated money market fee
waivers, as we reported EPS of 98 cents, down 8 percent year on
year. Our operating margin was 30 percent as we controlled
costs, and our return on tangible common equity was solid at 17
percent," Todd Gibbons, Chief Executive Officer, said.
"Our pipeline is
strong as we continue to win new mandates by differentiating
ourselves with clients and addressing a broader set of their
needs. While remaining focused on improving organic fee
growth, we are also managing structural expenses by investing in
automation and executing other efficiency programs to enhance the
client experience. Our business model continues to generate
significant excess capital. We look forward to recommencing
share buybacks as soon as possible, which we expect to be
meaningfully accretive to EPS," Mr. Gibbons added.
"While uncertainty
lies ahead in terms of how the pandemic evolves and its impact on
the global economy, I believe the underlying strength of our
franchise will become more apparent next year, as we expect to have
most of the run-rate impact of lower rates and associated money
market fee waivers in our earnings. At that point, we can
start to more clearly demonstrate the progress we are making around
our key priorities of driving organic growth, optimizing the
balance sheet and executing on our efficiency priorities," Mr.
Gibbons further noted.
"I am also proud that
our employees across the company have worked diligently throughout
this unprecedented time to provide great client service and am
confident the team we have in place will continue to navigate the
challenges we face. We entered this crisis from a position of
strength and have an unwavering focus on building ever greater
value for all our stakeholders going forward," Mr. Gibbons
concluded.
|
Media
Relations: Madelyn McHugh (212) 635-1376
|
Investor
Relations: Magda Palczynska (212) 635-8529
|
(a) For
information on this Non-GAAP measure, see "Supplemental Information
– Explanation of GAAP and Non-GAAP financial measures" on page
9.
|
Note: Above
comparisons are 3Q20 vs. 3Q19, unless otherwise
noted.
|
CONSOLIDATED
FINANCIAL HIGHLIGHTS
|
|
(in millions,
except per share amounts and unless otherwise noted; not
meaningful - N/M)
|
|
|
|
3Q20
vs.
|
3Q20
|
2Q20
|
3Q19
|
2Q20
|
3Q19
|
Fee
revenue
|
$
|
3,108
|
|
$
|
3,167
|
|
$
|
3,129
|
|
(2)
|
%
|
(1)
|
%
|
Net securities gains
(losses)
|
9
|
|
9
|
|
(1)
|
|
N/M
|
|
N/M
|
|
Total fee and other
revenue
|
3,117
|
|
3,176
|
|
3,128
|
|
(2)
|
|
—
|
|
Income from
consolidated investment management funds
|
27
|
|
54
|
|
3
|
|
N/M
|
|
N/M
|
Net interest
revenue
|
703
|
|
780
|
|
730
|
|
(10)
|
|
(4)
|
|
Total
revenue
|
3,847
|
|
4,010
|
|
3,861
|
|
(4)
|
|
—
|
|
Provision for credit
losses
|
9
|
|
143
|
|
(16)
|
|
N/M
|
|
N/M
|
|
Noninterest
expense
|
2,681
|
|
2,686
|
|
2,590
|
|
—
|
|
4
|
|
Income before income
taxes
|
1,157
|
|
1,181
|
|
1,287
|
|
(2)
|
|
(10)
|
|
Provision for income
taxes
|
213
|
|
216
|
|
246
|
|
(1)
|
|
(13)
|
|
Net income
|
$
|
944
|
|
$
|
965
|
|
$
|
1,041
|
|
(2)
|
%
|
(9)
|
%
|
Net income applicable
to common shareholders of The Bank of New York Mellon
Corporation
|
$
|
876
|
|
$
|
901
|
|
$
|
1,002
|
|
(3)
|
%
|
(13)
|
%
|
Operating leverage
(a)
|
|
|
|
(388)
|
bps
|
(388)
|
bps
|
Diluted earnings per
common share
|
$
|
0.98
|
|
$
|
1.01
|
|
$
|
1.07
|
|
(3)
|
%
|
(8)
|
%
|
Average common shares
and equivalents outstanding - diluted (in
thousands)
|
891,069
|
|
890,561
|
|
935,677
|
|
|
|
Pre-tax operating
margin
|
30
|
%
|
29
|
%
|
33
|
%
|
|
|
|
|
(a)
|
Operating leverage is
the rate of increase (decrease) in total revenue less the rate of
increase (decrease) in total noninterest expense.
|
bps – basis
points.
|
KEY DRIVERS (comparisons are 3Q20 vs. 3Q19, unless
otherwise stated)
- Total revenue decreased less than 1% primarily reflecting:
-
- Fee revenue decreased 1% primarily reflecting higher money
market fee waivers, partially offset by higher client activity and
balances in Pershing and Asset Servicing, higher market values and
the favorable impact of a weaker U.S. dollar.
- Net interest revenue decreased 4%. The decrease would
have been 8% larger due to the impact of the 3Q19 lease-related
impairment of $70 million. The
decrease primarily reflects lower interest rates on
interest-earning assets, partially offset by the benefit of lower
deposit and funding rates, higher deposits, securities portfolio
and loan balances.
- Provision for credit losses of $9
million reflects a fairly consistent macroeconomic outlook
compared with 2Q20.
- Noninterest expense increased 4%, 3% of which was due to the
impact of 3Q19 net reduction of reserves for tax-related exposure
of certain investment management funds. The remainder of the
increase primarily reflects continued investments in technology,
higher professional, legal and other purchased services expense and
the unfavorable impact of a weaker U.S. dollar, partially offset by
lower staff and business development (travel and marketing)
expenses.
- Effective tax rate of 18.4%.
Assets under custody and/or administration ("AUC/A") and
Assets under management ("AUM")
- AUC/A of $38.6 trillion,
increased 8%, primarily reflecting higher market values, net new
business, higher client inflows and the favorable impact of a
weaker U.S. dollar.
- AUM of $2.0 trillion, increased
9%, primarily reflecting higher market values, the favorable impact
of a weaker U.S. dollar (principally versus the British pound) and
net inflows.
Capital and liquidity
- Open market share repurchases temporarily suspended for 3Q20
and 4Q20 for CCAR banks.
- Paid $279 million in dividends to
common shareholders.
- Return on common equity ("ROE") of 9%; Return on tangible
common equity ("ROTCE") of 17% (a).
- Common Equity Tier 1 ("CET1") ratio – 13.0%.
- Tier 1 leverage ratio – 6.5%.
- Supplementary leverage ratio ("SLR") – 8.5% (b).
- Average liquidity coverage ratio ("LCR") – 111%.
- Total Loss Absorbing Capacity ("TLAC") ratios exceed minimum
requirements.
(a)
|
See "Supplemental
information – Explanation of GAAP and Non-GAAP financial measures"
on page 9 for additional information.
|
(b)
|
See "Capital and
Liquidity" on page 7 for additional information.
|
Note:
Throughout this document, sequential growth rates are
unannualized.
|
INVESTMENT
SERVICES BUSINESS HIGHLIGHTS
|
|
(dollars in
millions, unless otherwise noted; not meaningful -
N/M)
|
|
|
|
3Q20
vs.
|
3Q20
|
2Q20
|
3Q19
|
2Q20
|
3Q19
|
Total revenue by line
of business:
|
|
|
|
|
|
Asset
Servicing
|
$
|
1,354
|
|
$
|
1,463
|
|
$
|
1,411
|
|
(7)
|
%
|
(4)
|
%
|
Pershing
|
538
|
|
578
|
|
575
|
|
(7)
|
|
(6)
|
|
Issuer
Services
|
435
|
|
431
|
|
466
|
|
1
|
|
(7)
|
|
Treasury
Services
|
323
|
|
340
|
|
312
|
|
(5)
|
|
4
|
|
Clearance and
Collateral Management
|
277
|
|
295
|
|
293
|
|
(6)
|
|
(5)
|
|
Total revenue by line
of business
|
2,927
|
|
3,107
|
|
3,057
|
|
(6)
|
|
(4)
|
|
Provision for credit
losses
|
(10)
|
|
145
|
|
(15)
|
|
N/M
|
|
N/M
|
|
Noninterest
expense
|
2,020
|
|
1,989
|
|
1,973
|
|
2
|
|
2
|
|
Income before
taxes
|
$
|
917
|
|
$
|
973
|
|
$
|
1,099
|
|
(6)
|
%
|
(17)
|
%
|
|
|
|
|
|
|
Pre-tax operating
margin
|
31
|
%
|
31
|
%
|
36
|
%
|
|
|
|
|
|
|
|
|
Foreign exchange and
other trading revenue
|
$
|
146
|
|
$
|
178
|
|
$
|
160
|
|
(18)
|
%
|
(9)
|
%
|
Securities lending
revenue
|
$
|
37
|
|
$
|
51
|
|
$
|
39
|
|
(27)
|
%
|
(5)
|
%
|
|
|
|
|
|
|
Metrics:
|
|
|
|
|
|
Average
loans
|
$
|
40,308
|
|
$
|
43,113
|
|
$
|
37,005
|
|
(7)
|
%
|
9
|
%
|
Average
deposits
|
$
|
263,621
|
|
$
|
268,467
|
|
$
|
208,044
|
|
(2)
|
%
|
27
|
%
|
|
|
|
|
|
|
AUC/A at period end
(in trillions) (current period is preliminary)
(a)
|
$
|
38.6
|
|
$
|
37.3
|
|
$
|
35.8
|
|
3
|
%
|
8
|
%
|
Market value of
securities on loan at period end (in billions)
(b)
|
$
|
378
|
|
$
|
384
|
|
$
|
362
|
|
(2)
|
%
|
4
|
%
|
|
|
(a)
|
Consists of AUC/A
primarily from the Asset Servicing business and, to a lesser
extent, the Clearance and Collateral Management, Issuer Services,
Pershing and Wealth Management businesses. Includes the AUC/A
of CIBC Mellon Global Securities Services Company ("CIBC Mellon"),
a joint venture with the Canadian Imperial Bank of Commerce, of
$1.4 trillion at Sept. 30, 2020, $1.3 trillion at
June 30, 2020 and $1.4 trillion at Sept. 30,
2019.
|
(b)
|
Represents the total
amount of securities on loan in our agency securities lending
program managed by the Investment Services business. Excludes
securities for which BNY Mellon acts as agent on behalf of CIBC
Mellon clients, which totaled $62 billion at Sept.
30, 2020 and June 30, 2020 and $66 billion at
Sept. 30, 2019.
|
KEY DRIVERS
- The drivers of the total revenue variances by line of business
are indicated below.
-
- Asset Servicing - The year-over-year decrease primarily
reflects lower interest rates, partially offset by higher client
deposits and client volumes. The sequential decrease
primarily reflects lower foreign exchange volumes, lower net
interest revenue, a one-time fee recorded in 2Q20 and lower
securities lending revenue driven by tighter spreads.
- Pershing - The year-over-year decrease primarily reflects the
impact of rate-driven money market fee waivers, partially offset by
higher money market balances. The sequential decrease
primarily reflects lower clearing volumes and higher rate-driven
money market fee waivers.
- Issuer Services - The year-over-year decrease primarily
reflects lower Depositary Receipts revenue. The sequential
increase primarily reflects seasonally higher Depositary Receipts
revenue, partially offset by lower net interest revenue.
- Treasury Services - The year-over-year increase primarily
reflects higher client deposits and money market balances.
The sequential decrease reflects lower net interest revenue,
partially offset by higher payment volumes.
- Clearance and Collateral Management - The year-over-year
decrease primarily reflects lower investment income due to the 4Q19
sale of an equity investment. The sequential decrease
primarily reflects lower clearance volumes and net interest
revenue.
- Noninterest expense increased year-over-year primarily driven
by continued investments in technology. Sequentially,
noninterest expense increased primarily reflecting higher staff
expense and the unfavorable impact of a weaker U.S. dollar.
INVESTMENT AND
WEALTH MANAGEMENT BUSINESS HIGHLIGHTS
|
|
(dollars in
millions, unless otherwise noted; not meaningful -
N/M)
|
|
|
|
3Q20
vs.
|
3Q20
|
2Q20
|
3Q19
|
2Q20
|
3Q19
|
Total revenue by line
of business:
|
|
|
|
|
|
Investment
Management
|
$
|
641
|
|
$
|
621
|
|
$
|
608
|
|
3
|
%
|
5
|
%
|
Wealth
Management
|
277
|
|
265
|
|
279
|
|
5
|
|
(1)
|
|
Total revenue by line
of business
|
918
|
|
886
|
|
887
|
|
4
|
|
3
|
|
Provision for credit
losses
|
12
|
|
7
|
|
—
|
|
N/M
|
|
N/M
|
|
Noninterest
expense
|
661
|
|
658
|
|
592
|
|
—
|
|
12
|
|
Income before
taxes
|
$
|
245
|
|
$
|
221
|
|
$
|
295
|
|
11
|
%
|
(17)
|
%
|
|
|
|
|
|
|
Pre-tax operating
margin
|
27
|
%
|
25
|
%
|
33
|
%
|
|
|
Adjusted pre-tax
operating margin – Non-GAAP (a)
|
29
|
%
|
28
|
%
|
37
|
%
|
|
|
|
|
|
|
|
|
Metrics:
|
|
|
|
|
|
Average
loans
|
$
|
11,503
|
|
$
|
11,791
|
|
$
|
12,013
|
|
(2)
|
%
|
(4)
|
%
|
Average
deposits
|
$
|
17,570
|
|
$
|
17,491
|
|
$
|
14,083
|
|
—
|
%
|
25
|
%
|
|
|
|
|
|
|
AUM (in billions)
(current period is preliminary) (b)
|
$
|
2,041
|
|
$
|
1,961
|
|
$
|
1,881
|
|
4
|
%
|
9
|
%
|
Wealth Management
client assets (in billions) (current period is preliminary)
(c)
|
$
|
265
|
|
$
|
254
|
|
$
|
259
|
|
4
|
%
|
2
|
%
|
|
|
(a)
|
Net of distribution
and servicing expense. See "Supplemental information –
Explanation of GAAP and Non-GAAP financial measures" on page 9 for
information on this Non-GAAP measure.
|
(b)
|
Excludes securities
lending cash management assets and assets managed in the Investment
Services business.
|
(c)
|
Includes AUM and
AUC/A in the Wealth Management business.
|
KEY DRIVERS
- The drivers of the total revenue variances by line of business
are indicated below.
-
- Investment Management - The year-over-year increase primarily
reflects the impact of hedging activities in 3Q19, higher market
values, the favorable impact of a weaker U.S. dollar and higher
performance fees, partially offset by the impact of money market
fee waivers. The sequential increase primarily reflects
higher market values and the favorable impact of a weaker U.S.
dollar, partially offset by lower seed capital gains, net of
hedges.
- Wealth Management - The year-over-year decrease primarily
reflects lower net interest revenue. Both comparisons reflect
higher market values offset by a shift to lower fee investment
products.
- Noninterest expense increased year-over-year primarily
reflecting the net reduction of the reserves for tax-related
exposure for certain investment management funds in 3Q19.
OTHER SEGMENT primarily includes leasing operations,
certain corporate treasury activities, derivatives, business exits
and other corporate revenue and expense items.
|
|
|
|
(in
millions)
|
3Q20
|
2Q20
|
3Q19
|
Fee revenue
(loss)
|
$
|
11
|
|
$
|
29
|
|
$
|
(5)
|
|
Net securities gains
(losses)
|
9
|
|
9
|
|
(1)
|
|
Total fee and other
revenue (loss)
|
20
|
|
38
|
|
(6)
|
|
Net interest
(expense)
|
(25)
|
|
(36)
|
|
(80)
|
|
Total (loss)
revenue
|
(5)
|
|
2
|
|
(86)
|
|
Provision for credit
losses
|
7
|
|
(9)
|
|
(1)
|
|
Noninterest
expense
|
—
|
|
39
|
|
25
|
|
(Loss) before
taxes
|
$
|
(12)
|
|
$
|
(28)
|
|
$
|
(110)
|
|
KEY DRIVERS
- Fee revenue, net securities gains and net interest expense
include corporate treasury and other investment activity, including
hedging activity which offsets between fee revenue and net interest
expense. Fee revenue increased year-over-year primarily
reflecting higher corporate treasury activity and equity investment
income. The sequential decrease in fee revenue primarily
reflects lower corporate treasury activity and equity investment
income. Net interest expense decreased year-over-year
primarily reflecting the lease-related impairment of $70 million recorded in 3Q19 and corporate
treasury activity. The sequential decrease in net interest
expense primarily reflects corporate treasury activity.
- Noninterest expense decreased year-over-year and sequentially
primarily reflecting lower staff expense.
MONEY MARKET FEE WAIVERS
The following table presents the impact of money market fee
waivers on our consolidated fee revenue, net of distribution and
servicing expense. A majority of the money market fee waivers
were driven by low short-term interest rates.
Money market fee
waivers
|
|
|
|
|
(in
millions)
|
3Q20
|
2Q20
|
1Q20
|
YTD20
|
Investment services
fees:
|
|
|
|
|
Asset servicing
fees
|
$
|
(1)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(1)
|
|
Clearing services
fees
|
(57)
|
|
(50)
|
|
(9)
|
|
(116)
|
|
Issuer services
fees
|
(1)
|
|
(1)
|
|
—
|
|
(2)
|
|
Treasury services
fees
|
(3)
|
|
(2)
|
|
—
|
|
(5)
|
|
Total investment
services fees
|
(62)
|
|
(53)
|
|
(9)
|
|
(124)
|
|
Investment management
and performance fees
|
(42)
|
|
(30)
|
|
(14)
|
|
(86)
|
|
Distribution and
servicing revenue
|
(6)
|
|
(3)
|
|
—
|
|
(9)
|
|
Total fee and other
revenue
|
(110)
|
|
(86)
|
|
(23)
|
|
(219)
|
|
Less: Distribution
and servicing expense
|
9
|
|
7
|
|
—
|
|
16
|
|
Net impact of money
market fee waivers
|
$
|
(101)
|
|
$
|
(79)
|
|
$
|
(23)
|
|
$
|
(203)
|
|
|
|
|
|
|
Impact to revenue by
line of business (a):
|
|
|
|
|
Asset
Servicing
|
$
|
(4)
|
|
$
|
(1)
|
|
$
|
—
|
|
$
|
(5)
|
|
Pershing
|
(73)
|
|
(60)
|
|
(9)
|
|
(142)
|
|
Issuer
Services
|
(2)
|
|
(1)
|
|
—
|
|
(3)
|
|
Treasury
Services
|
(1)
|
|
—
|
|
—
|
|
(1)
|
|
Investment
Management
|
(28)
|
|
(24)
|
|
(14)
|
|
(66)
|
|
Wealth
Management
|
(2)
|
|
—
|
|
—
|
|
(2)
|
|
Total impact to
revenue by line of business
|
$
|
(110)
|
|
$
|
(86)
|
|
$
|
(23)
|
|
$
|
(219)
|
|
|
|
(a)
|
The line of business
revenue for management reporting purposes reflects the impact of
revenue transferred between the businesses.
|
CAPITAL AND
LIQUIDITY
|
|
Capital and
liquidity ratios
|
Sept. 30,
2020
|
|
June 30,
2020
|
|
Dec. 31,
2019
|
Consolidated
regulatory capital ratios: (a)
|
|
|
|
|
|
CET1 ratio
|
13.0
|
%
|
|
12.6
|
%
|
|
11.5
|
%
|
Tier 1 capital
ratio
|
15.7
|
|
|
15.4
|
|
|
13.7
|
|
Total capital
ratio
|
16.6
|
|
|
16.3
|
|
|
14.4
|
|
Tier 1 leverage
ratio
|
6.5
|
|
|
6.2
|
|
|
6.6
|
|
SLR
|
8.5
|
|
(b)
|
8.2
|
|
(b)
|
6.1
|
|
BNY Mellon
shareholders' equity to total assets ratio
|
10.5
|
%
|
|
9.9
|
%
|
|
10.9
|
%
|
BNY Mellon common
shareholders' equity to total assets ratio
|
9.4
|
%
|
|
8.9
|
%
|
|
9.9
|
%
|
|
|
|
|
|
|
Average
LCR
|
111
|
%
|
|
112
|
%
|
|
120
|
%
|
|
|
|
|
|
|
Book value per common
share
|
$
|
45.58
|
|
|
$
|
44.21
|
|
|
$
|
42.12
|
|
Tangible book value
per common share – Non-GAAP (c)
|
$
|
24.60
|
|
|
$
|
23.31
|
|
|
$
|
21.33
|
|
Common shares
outstanding (in thousands)
|
886,136
|
|
|
885,862
|
|
|
900,683
|
|
|
|
(a)
|
Regulatory capital
ratios for Sept. 30, 2020 are preliminary. For our CET1, Tier
1 capital and Total capital ratios, our effective capital ratios
under the U.S. capital rules are the lower of the ratios as
calculated under the Standardized and Advanced Approaches, which
for the periods noted above was the Advanced Approaches.
|
(b)
|
Reflects the
application of a new rule effective April 1, 2020 to exclude
certain central bank placements. Also effective on April 1,
2020 was the temporary exclusion of U.S. Treasury securities from
the leverage exposure used in the SLR calculation which increased
our consolidated SLR by 78 basis points at Sept. 30, 2020 and 40
basis points at June 30, 2020.
|
(c)
|
Tangible book value
per common share – Non-GAAP excludes goodwill and intangible
assets, net of deferred tax liabilities. See "Supplemental
information – Explanation of GAAP and Non-GAAP financial measures"
on page 9 for information on this Non-GAAP measure.
|
- CET1 capital totaled $21.2
billion at Sept. 30, 2020, an
increase of $1.14 billion compared
with June 30, 2020. The increase primarily reflects
capital generated through earnings, foreign currency translation
and unrealized gains on securities available-for-sale, partially
offset by capital deployed through dividend payments.
NET INTEREST
REVENUE
|
|
Net interest
revenue
|
|
|
|
3Q20
vs.
|
(dollars in
millions; not meaningful - N/M)
|
3Q20
|
2Q20
|
3Q19
|
2Q20
|
3Q19
|
Net interest
revenue
|
$
|
703
|
|
$
|
780
|
|
$
|
730
|
|
(10)
|
%
|
(4)
|
%
|
Add: Tax equivalent
adjustment
|
2
|
|
2
|
|
3
|
|
N/M
|
N/M
|
Net interest revenue,
on a fully taxable equivalent ("FTE") basis – Non-GAAP
(a)
|
$
|
705
|
|
$
|
782
|
|
$
|
733
|
|
(10)
|
%
|
(4)
|
%
|
|
|
|
|
|
|
Net interest
margin
|
0.79
|
%
|
0.88
|
%
|
0.99
|
%
|
(9)
|
bps
|
(20)
|
bps
|
Net interest margin
(FTE) – Non-GAAP (a)
|
0.79
|
%
|
0.88
|
%
|
1.00
|
%
|
(9)
|
bps
|
(21)
|
bps
|
|
|
(a)
|
Net interest revenue
(FTE) – Non-GAAP and net interest margin (FTE) – Non-GAAP include
the tax equivalent adjustments on tax-exempt income. See
"Supplemental information – Explanation of GAAP and Non-GAAP
financial measures" on page 9 for information on this Non-GAAP
measure.
|
bps – basis
points.
|
- Net interest revenue decreased 4% year-over-year. The
decrease would have been 8% larger due to the impact of the 3Q19
lease-related impairment of $70
million. The decrease primarily reflects lower
interest rates on interest-earning assets, partially offset by the
benefit of lower deposit and funding rates, higher deposits,
securities portfolio and loan balances.
- Sequentially, the decrease was primarily driven by lower
interest rates on interest-earning assets. This was partially
offset by the benefit of lower deposit and funding rates and a
larger securities portfolio.
THE BANK OF NEW
YORK MELLON CORPORATION
Condensed
Consolidated Income Statement
|
|
(in
millions)
|
Quarter
ended
|
|
Year-to-date
|
|
Sept. 30,
2020
|
June 30,
2020
|
Sept. 30,
2019
|
|
Sept. 30,
2020
|
Sept. 30,
2019
|
|
|
Fee and other
revenue
|
|
|
|
|
|
|
|
Investment services
fees:
|
|
|
|
|
|
|
|
Asset servicing
fees
|
$
|
1,168
|
|
$
|
1,173
|
|
$
|
1,152
|
|
|
$
|
3,500
|
|
$
|
3,415
|
|
|
Clearing services
fees
|
397
|
|
431
|
|
419
|
|
|
1,298
|
|
1,227
|
|
|
Issuer services
fees
|
295
|
|
277
|
|
324
|
|
|
835
|
|
866
|
|
|
Treasury services
fees
|
152
|
|
144
|
|
140
|
|
|
445
|
|
412
|
|
|
Total investment
services fees
|
2,012
|
|
2,025
|
|
2,035
|
|
|
6,078
|
|
5,920
|
|
|
Investment management
and performance fees
|
835
|
|
786
|
|
832
|
|
|
2,483
|
|
2,506
|
|
|
Foreign exchange and
other trading revenue
|
137
|
|
166
|
|
150
|
|
|
622
|
|
486
|
|
|
Financing-related
fees
|
49
|
|
58
|
|
49
|
|
|
166
|
|
150
|
|
|
Distribution and
servicing
|
29
|
|
27
|
|
33
|
|
|
87
|
|
95
|
|
|
Investment and other
income
|
46
|
|
105
|
|
30
|
|
|
162
|
|
108
|
|
|
Total fee
revenue
|
3,108
|
|
3,167
|
|
3,129
|
|
|
9,598
|
|
9,265
|
|
|
Net securities gains
(losses)
|
9
|
|
9
|
|
(1)
|
|
|
27
|
|
7
|
|
|
Total fee and other
revenue
|
3,117
|
|
3,176
|
|
3,128
|
|
|
9,625
|
|
9,272
|
|
|
Operations of
consolidated investment management funds
|
|
|
|
|
|
|
|
Investment
income
|
27
|
|
54
|
|
4
|
|
|
43
|
|
40
|
|
|
Interest of
investment management fund note holders
|
—
|
|
—
|
|
1
|
|
|
—
|
|
1
|
|
|
Income from
consolidated investment management funds
|
27
|
|
54
|
|
3
|
|
|
43
|
|
39
|
|
|
Net interest
revenue
|
|
|
|
|
|
|
|
Interest
revenue
|
820
|
|
943
|
|
1,942
|
|
|
3,333
|
|
5,827
|
|
|
Interest
expense
|
117
|
|
163
|
|
1,212
|
|
|
1,036
|
|
3,454
|
|
|
Net interest
revenue
|
703
|
|
780
|
|
730
|
|
|
2,297
|
|
2,373
|
|
|
Total
revenue
|
3,847
|
|
4,010
|
|
3,861
|
|
|
11,965
|
|
11,684
|
|
|
Provision for
credit losses
|
9
|
|
143
|
|
(16)
|
|
|
321
|
|
(17)
|
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
Staff
|
1,466
|
|
1,464
|
|
1,479
|
|
|
4,412
|
|
4,424
|
|
|
Professional, legal
and other purchased services
|
355
|
|
337
|
|
316
|
|
|
1,022
|
|
978
|
|
|
Software and
equipment
|
340
|
|
345
|
|
309
|
|
|
1,011
|
|
896
|
|
|
Net
occupancy
|
136
|
|
137
|
|
138
|
|
|
408
|
|
413
|
|
|
Sub-custodian and
clearing
|
119
|
|
120
|
|
111
|
|
|
344
|
|
331
|
|
|
Distribution and
servicing
|
85
|
|
85
|
|
97
|
|
|
261
|
|
282
|
|
|
Bank assessment
charges
|
30
|
|
35
|
|
31
|
|
|
100
|
|
93
|
|
|
Business
development
|
17
|
|
20
|
|
47
|
|
|
79
|
|
148
|
|
|
Amortization of
intangible assets
|
26
|
|
26
|
|
30
|
|
|
78
|
|
89
|
|
|
Other
|
107
|
|
117
|
|
32
|
|
|
364
|
|
282
|
|
|
Total noninterest
expense
|
2,681
|
|
2,686
|
|
2,590
|
|
|
8,079
|
|
7,936
|
|
|
Income
|
|
|
|
|
|
|
|
Income before income
taxes
|
1,157
|
|
1,181
|
|
1,287
|
|
|
3,565
|
|
3,765
|
|
|
Provision for income
taxes
|
213
|
|
216
|
|
246
|
|
|
694
|
|
747
|
|
|
Net income
|
944
|
|
965
|
|
1,041
|
|
|
2,871
|
|
3,018
|
|
|
Net (income)
attributable to noncontrolling interests related to consolidated
investment management funds
|
(7)
|
|
(15)
|
|
(3)
|
|
|
(4)
|
|
(17)
|
|
|
Net income applicable
to shareholders of The Bank of New York Mellon
Corporation
|
937
|
|
950
|
|
1,038
|
|
|
2,867
|
|
3,001
|
|
|
Preferred stock
dividends
|
(61)
|
|
(49)
|
|
(36)
|
|
|
(146)
|
|
(120)
|
|
|
Net income applicable
to common shareholders of The Bank of New York Mellon
Corporation
|
$
|
876
|
|
$
|
901
|
|
$
|
1,002
|
|
|
$
|
2,721
|
|
$
|
2,881
|
|
|
|
|
Earnings per share
applicable to the common shareholders of The Bank of New York
Mellon Corporation
|
Quarter
ended
|
|
Year-to-date
|
|
Sept. 30,
2020
|
June 30,
2020
|
Sept. 30,
2019
|
|
Sept. 30,
2020
|
Sept. 30,
2019
|
|
(in
dollars)
|
|
Basic
|
$
|
0.98
|
|
$
|
1.01
|
|
$
|
1.07
|
|
|
$
|
3.05
|
|
$
|
3.02
|
|
|
Diluted
|
$
|
0.98
|
|
$
|
1.01
|
|
$
|
1.07
|
|
|
$
|
3.04
|
|
$
|
3.01
|
|
|
SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP
FINANCIAL MEASURES
BNY Mellon has included in this Earnings Release certain
Non-GAAP financial measures on a tangible basis as a supplement to
GAAP information, which exclude goodwill and intangible assets, net
of deferred tax liabilities. We believe that the return on
tangible common equity is additional useful information for
investors because it presents a measure of those assets that can
generate income, and the tangible book value per common share is
additional useful information because it presents the level of
tangible assets in relation to shares of common stock
outstanding.
Net interest revenue, on a fully taxable equivalent ("FTE")
basis – Non-GAAP and net interest margin (FTE) – Non-GAAP and other
FTE measures include the tax equivalent adjustments on tax-exempt
income which allows for the comparison of amounts arising from both
taxable and tax-exempt sources and is consistent with industry
practice. The adjustment to an FTE basis has no impact on net
income.
BNY Mellon has also included the adjusted pre-tax operating
margin – Non-GAAP, which is the pre-tax operating margin for the
Investment and Wealth Management business net of distribution and
servicing expense that was passed to third parties who distribute
or service our managed funds. We believe that this measure is
useful when evaluating the performance of the Investment and Wealth
Management business relative to industry competitors.
For the reconciliations of these Non-GAAP measures, see
"Supplemental Information - Explanation of GAAP and Non-GAAP
Financial Measures" in the Financial Supplement available at
www.bnymellon.com.
CAUTIONARY STATEMENT
A number of statements (i) in this Earnings Release, (ii) in our
Financial Supplement, (iii) in our presentations and (iv) in the
responses to questions on our conference call discussing our
quarterly results and other public events may contain
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, including statements
about our capital plans, strategic priorities, financial goals,
organic growth, performance, organizational quality and efficiency,
investments, including in technology and product development,
resiliency, capabilities, revenue, net interest revenue, money
market fee waivers, fees, expenses, cost discipline, sustainable
growth, company management, deposits, interest rates and yield
curves, securities portfolio, taxes, business opportunities,
divestments, volatility, preliminary business metrics and
regulatory capital ratios and statements regarding our aspirations,
as well as our overall plans, strategies, goals, objectives,
expectations, outlooks, estimates, intentions, targets,
opportunities, focus and initiatives, including the potential
effects of the coronavirus pandemic on any of the foregoing.
These statements may be expressed in a variety of ways, including
the use of future or present tense language. Words such as
"estimate," "forecast," "project," "anticipate," "likely,"
"target," "expect," "intend," "continue," "seek," "believe,"
"plan," "goal," "could," "should," "would," "may," "might," "will,"
"strategy," "synergies," "opportunities," "trends," "future,"
"potentially," "outlook" and words of similar meaning may signify
forward-looking statements. These statements and other
forward-looking statements contained in other public disclosures of
BNY Mellon which make reference to the cautionary factors described
in this Earnings Release are based upon current beliefs and
expectations and are subject to significant risks and uncertainties
(some of which are beyond BNY Mellon's control). Actual
results may differ materially from those expressed or implied as a
result of a number of factors, including, but not limited to, the
risk factors and other uncertainties set forth in BNY Mellon's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, the Annual Report on Form 10-K for
the year ended Dec. 31, 2019 and BNY
Mellon's other filings with the Securities and Exchange
Commission. Statements about the effects of the current and
near-term market and macroeconomic outlook on BNY Mellon, including
on its business, operations, financial performance and prospects,
may constitute forward-looking statements, and are based on
assumptions that involve risks and uncertainties and that are
subject to change based on various important factors (some of which
are beyond BNY Mellon's control), including the scope and duration
of the pandemic, actions taken by governmental authorities in
response to the pandemic, and the direct and indirect impact of the
pandemic on us, our clients, customers and third parties.
Preliminary business metrics and regulatory capital ratios are
subject to change, possibly materially, as BNY Mellon completes its
Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2020. All forward-looking
statements in this Earnings Release speak only as of Oct. 16, 2020, and BNY Mellon undertakes no
obligation to update any forward-looking statement to reflect
events or circumstances after that date or to reflect the
occurrence of unanticipated events.
ABOUT BNY MELLON
BNY Mellon is a global investments company dedicated to helping
its clients manage and service their financial assets throughout
the investment lifecycle. Whether providing financial
services for institutions, corporations or individual investors,
BNY Mellon delivers informed investment and wealth management and
investment services in 35 countries. As of Sept. 30, 2020, BNY Mellon had $38.6 trillion in assets under custody and/or
administration, and $2.0 trillion in
assets under management. BNY Mellon can act as a single point
of contact for clients looking to create, trade, hold, manage,
service, distribute or restructure investments. BNY Mellon is
the corporate brand of The Bank of New York Mellon Corporation
(NYSE: BK). Additional information is available on
www.bnymellon.com. Follow us on Twitter @BNYMellon or visit
our newsroom at www.bnymellon.com/newsroom for the latest company
news.
CONFERENCE CALL INFORMATION
Todd Gibbons, Chief Executive
Officer, and Emily Portney, Chief
Financial Officer, will host a conference call and simultaneous
live audio webcast at 8:00 a.m. EDT
on Oct. 16, 2020. This
conference call and audio webcast will include forward-looking
statements and may include other material information.
Investors and analysts wishing to access the conference call and
audio webcast may do so by dialing (800) 390-5696 (U.S.) or (720)
452-9082 (International), and using the passcode: 807070, or by
logging onto www.bnymellon.com/investorrelations. Earnings
materials will be available at www.bnymellon.com/investorrelations
beginning at approximately 6:30 a.m.
EDT on Oct. 16, 2020.
Replays of the conference call and audio webcast will be available
beginning Oct. 16, 2020 at
approximately 2:00 p.m. EDT through
Nov. 15, 2020 by dialing (888)
203-1112 (U.S.) or (719) 457-0820 (International), and using the
passcode: 5375940. The archived version of the conference
call and audio webcast will also be available at
www.bnymellon.com/investorrelations for the same time period.
View original
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SOURCE BNY Mellon