NEW YORK, Oct. 19, 2021 /PRNewswire/ --
Revenue up
5%
|
|
EPS up
6%
|
|
ROE
9%
ROTCE
17% (a)
|
|
CET1
11.7%
Tier 1
leverage 5.7%
|
The Bank of New York Mellon Corporation ("BNY
Mellon") (NYSE: BK) today reported:
|
3Q21
vs.
|
|
3Q21
|
2Q21
|
3Q20
|
2Q21
|
3Q20
|
Net income applicable
to common shareholders (in millions)
|
$
|
881
|
|
$
|
991
|
|
$
|
876
|
|
(11)
|
%
|
1
|
%
|
Diluted earnings per
common share
|
$
|
1.04
|
|
$
|
1.13
|
|
$
|
0.98
|
|
(8)
|
%
|
6
|
%
|
Third Quarter
Results
|
|
CEO
Commentary
|
|
|
|
Total revenue of
$4.0 billion, increased 5%
• Fee and
other revenue increased 8%;
fee revenue increased 6%
• Fee
revenue increased 11% excluding money market fee
waivers
(a)
• Net
interest revenue decreased 9%
Provision for
credit losses was a benefit of $45 million
Total noninterest
expense of $2.9 billion, increased 9%
• 3% of
the increase driven by litigation reserves
Investment
Services
• Total
revenue increased 3%
• Income
before taxes decreased 9%
• AUC/A
of $45.3 trillion, increased 17%
Investment and
Wealth Management
• Total
revenue increased 12%
• Income
before taxes increased 42%
• AUM of
$2.3 trillion, increased 13%
Capital
•
Repurchased 38.1 million common shares for $2.0 billion
•
Dividends of $296 million to common shareholders
(including dividend-equivalents on share-based
awards)
|
|
"Our financial
performance this quarter reflects healthy and
broad-based organic growth across our businesses as well as a
supportive global markets backdrop. Revenue of over $4
billion was up 5 percent year-over-year, and fee revenue was
up 6 percent, or 11 percent excluding the impact of money
market fee waivers. Our operating margin of 29 percent was
essentially flat compared to the third quarter of 2020 while we
continued to make significant investments in our people,
technology, efficiency and growth initiatives," Todd Gibbons,
Chief Executive Officer, said.
Mr. Gibbons added,
"This quarter we announced several
ground-breaking new solutions that will meaningfully improve
the client experience and represent exciting growth
opportunities for us. Our Treasury Services business
announced a collaboration with Verizon enabling them to be
the first company to send request-for-payment messages
directly to consumers' bank accounts using our new real-time
e-bills and payments functionality which revolutionizes the
bill pay experience for both billers and their customers. We
also announced the launch of Pershing X, a new business
unit
within Pershing, to create the industry's leading end-to-end
platform in the wealth advisory space, offering a
comprehensive set of capabilities, and helping financial
services firms solve the challenge of managing multiple
disconnected technology tools and data sets for their
advisors."
"During the quarter
we returned $2.3 billion of capital to our
shareholders, including almost $300 million of common
dividends and $2 billion of share repurchases. We ended the
quarter with a Tier 1 leverage ratio of 5.7 percent, which
together with our continued capital generation, provides us
meaningful capacity to continue investing in our businesses
and returning excess capital to our shareholders," Mr. Gibbons
concluded.
|
Media
Relations: Garrett Marquis (949) 683-1503
|
Investor
Relations: Marius Merz (212) 298-1480
|
(a) For
information on these Non-GAAP measures, see "Supplemental
Information – Explanation of GAAP and Non-GAAP financial measures"
on page 9.
|
Note: Above
comparisons are 3Q21 vs. 3Q20, unless otherwise
noted.
|
CONSOLIDATED
FINANCIAL HIGHLIGHTS
|
|
(in millions,
except per share amounts and unless otherwise noted;
not
|
|
|
|
3Q21
vs.
|
meaningful -
N/M)
|
3Q21
|
2Q21
|
3Q20
|
2Q21
|
3Q20
|
Fee
revenue
|
$
|
3,265
|
|
$
|
3,224
|
|
$
|
3,074
|
|
1
|
%
|
6
|
%
|
Other
revenue
|
129
|
|
91
|
|
70
|
|
N/M
|
N/M
|
Total fee and other
revenue
|
3,394
|
|
3,315
|
|
3,144
|
|
2
|
|
8
|
|
Net interest
revenue
|
641
|
|
645
|
|
703
|
|
(1)
|
|
(9)
|
|
Total
revenue
|
4,035
|
|
3,960
|
|
3,847
|
|
2
|
|
5
|
|
Provision for credit
losses
|
(45)
|
|
(86)
|
|
9
|
|
N/M
|
N/M
|
Noninterest
expense
|
2,918
|
|
2,778
|
|
2,681
|
|
5
|
|
9
|
|
Income before income
taxes
|
1,162
|
|
1,268
|
|
1,157
|
|
(8)
|
|
—
|
|
Provision for income
taxes
|
219
|
|
241
|
|
213
|
|
(9)
|
|
3
|
|
Net income
|
$
|
943
|
|
$
|
1,027
|
|
$
|
944
|
|
(8)
|
%
|
—
|
%
|
Net income applicable
to common shareholders of The Bank of New York
Mellon Corporation
|
$
|
881
|
|
$
|
991
|
|
$
|
876
|
|
(11)
|
%
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating leverage
(a)
|
|
|
|
|
|
|
|
|
|
(315)
|
bps
|
(395)
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share
|
$
|
1.04
|
|
$
|
1.13
|
|
$
|
0.98
|
|
(8)
|
%
|
6
|
%
|
Average common shares
and equivalents outstanding - diluted (in
thousands)
|
|
849,028
|
|
|
873,475
|
|
|
891,069
|
|
|
|
|
|
Pre-tax operating
margin
|
|
29
|
%
|
|
32
|
%
|
|
30
|
%
|
|
|
|
|
(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 3Q21 vs. 3Q20, unless
otherwise stated)
- Total revenue increased 5%, primarily reflecting:
-
- Fee and other revenue increased 8%.
-
- Fee revenue increased 6% primarily reflecting the positive
impact of higher markets, higher client volumes and the favorable
impact of a weaker U.S. dollar, partially offset by higher money
market fee waivers. Excluding money market fee waivers, fee revenue
increased 11% (a).
- Other revenue increased primarily reflecting strategic equity
investment gains.
- Net interest revenue decreased 9% primarily reflecting lower
interest rates on interest-earning assets and the impact of hedging
activities (primarily offset in fee and other revenue). This was
partially offset by the benefit of lower funding and deposit rates
and higher deposit and loan balances.
- Provision for credit losses was a benefit of $45 million primarily driven by an improvement in
the macroeconomic forecast.
- Noninterest expense increased 9%, 3% of which was due to higher
litigation reserves. The remainder of the increase primarily
reflects higher revenue-related expenses, investments in growth,
infrastructure and efficiency initiatives and the unfavorable
impact of a weaker U.S. dollar.
- Effective tax rate of 18.8%.
Assets under custody and/or administration ("AUC/A") and
Assets under management ("AUM")
- AUC/A of $45.3 trillion,
increased 17%, primarily reflecting higher market values, client
inflows and net new business.
- AUM of $2.3 trillion, increased
13%, primarily reflecting higher market values, net inflows and the
favorable impact of a weaker U.S. dollar.
Capital and liquidity
- Repurchased 38.1 million common shares for $2.0 billion; Dividends of $296 million to common shareholders (including
dividend-equivalents on share-based awards).
- Return on common equity ("ROE") of 9%; Return on tangible
common equity ("ROTCE") of 17% (a).
- Common Equity Tier 1 ("CET1") ratio – 11.7%.
- Tier 1 leverage ratio – 5.7%.
- 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.
|
Note:
Throughout this document, sequential growth rates are
unannualized.
|
INVESTMENT
SERVICES BUSINESS HIGHLIGHTS
|
|
(dollars in
millions, unless otherwise noted; not meaningful -
N/M)
|
|
|
|
3Q21
vs.
|
3Q21
|
2Q21
|
3Q20
|
2Q21
|
3Q20
|
Total revenue by line
of business:
|
|
|
|
|
|
Asset
Servicing
|
$
|
1,437
|
|
$
|
1,382
|
|
$
|
1,354
|
|
4
|
%
|
6
|
%
|
Pershing
|
566
|
|
590
|
|
538
|
|
(4)
|
|
5
|
|
Issuer
Services
|
400
|
|
405
|
|
435
|
|
(1)
|
|
(8)
|
|
Treasury
Services
|
326
|
|
319
|
|
323
|
|
2
|
|
1
|
|
Clearance and
Collateral Management
|
281
|
|
283
|
|
277
|
|
(1)
|
|
1
|
|
Total revenue by line
of business
|
3,010
|
|
2,979
|
|
2,927
|
|
1
|
|
3
|
|
Provision for credit
losses
|
(35)
|
|
(77)
|
|
(10)
|
|
N/M
|
N/M
|
Noninterest
expense
|
2,211
|
|
2,052
|
|
2,020
|
|
8
|
|
9
|
|
Income before
taxes
|
$
|
834
|
|
$
|
1,004
|
|
$
|
917
|
|
(17)
|
%
|
(9)
|
%
|
|
|
|
|
|
|
Pre-tax operating
margin
|
28
|
%
|
34
|
%
|
31
|
%
|
|
|
|
|
|
|
|
|
Foreign exchange
revenue
|
$
|
148
|
|
$
|
152
|
|
$
|
126
|
|
(3)
|
%
|
17
|
%
|
Securities lending
revenue
|
$
|
45
|
|
$
|
42
|
|
$
|
37
|
|
7
|
%
|
22
|
%
|
Net interest
revenue
|
$
|
632
|
|
$
|
643
|
|
$
|
681
|
|
(2)
|
%
|
(7)
|
%
|
|
|
|
|
|
|
Metrics:
|
|
|
|
|
|
Average
loans
|
$
|
47,430
|
|
$
|
46,845
|
|
$
|
40,308
|
|
1
|
%
|
18
|
%
|
Average
deposits
|
$
|
308,645
|
|
$
|
313,923
|
|
$
|
263,621
|
|
(2)
|
%
|
17
|
%
|
|
|
|
|
|
|
AUC/A at period end
(in trillions) (current period is preliminary)
(a)
|
$
|
45.3
|
|
$
|
45.0
|
|
$
|
38.6
|
|
1
|
%
|
17
|
%
|
Market value of
securities on loan at period end (in billions)
(b)
|
$
|
443
|
|
$
|
456
|
|
$
|
378
|
|
(3)
|
%
|
17
|
%
|
(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
$1.7 trillion at Sept. 30, 2021 and June 30, 2021
and $1.4 trillion at Sept. 30, 2020.
|
(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 $68 billion at Sept.
30, 2021, $63 billion at June 30, 2021 and $62 billion
at Sept. 30, 2020.
|
KEY DRIVERS
- The drivers of the total revenue variances by line of business
are indicated below. Also see page 6 for information related to
money market fee waivers.
-
- Asset Servicing – The year-over-year increase primarily
reflects higher market values, strategic equity investment gains,
higher client activity and foreign exchange revenue, partially
offset by higher money market fee waivers and lower net interest
revenue. The sequential increase primarily reflects strategic
equity investment gains and higher market levels and client
activity.
- Pershing – The year-over-year increase primarily reflects
higher market values, client balances and activity, partially
offset by higher money market fee waivers. The sequential decrease
reflects lower clearance volumes and net interest revenue,
partially offset by higher market values.
- Issuer Services – The year-over-year decrease primarily
reflects higher money market fee waivers and lower fees and net
interest revenue in Corporate Trust, partially offset by higher
Depositary Receipts revenue. The sequential decrease primarily
reflects lower fees and net interest revenue in Corporate Trust,
partially offset by seasonally higher Depositary Receipts
revenue.
- Treasury Services – The year-over-year increase primarily
reflects higher payment volumes and higher net interest revenue
driven by higher deposit balances, partially offset by higher money
market fee waivers. The sequential increase primarily reflects
higher net interest revenue and payment volumes.
- Clearance and Collateral Management – The year-over-year
increase primarily reflects higher non-U.S. collateral management
fees driven by balances and higher clearance volumes, partially
offset by lower intraday credit fees and net interest revenue.
- Noninterest expense increased year-over-year and sequentially
primarily reflecting higher litigation reserves, higher
revenue-related expenses and investments in growth, infrastructure
and efficiency initiatives.
INVESTMENT AND
WEALTH MANAGEMENT BUSINESS HIGHLIGHTS
|
|
(dollars in
millions, unless otherwise noted; not meaningful -
N/M)
|
|
|
|
3Q21
vs.
|
3Q21
|
2Q21
|
3Q20
|
2Q21
|
3Q20
|
Total revenue by line
of business:
|
|
|
|
|
|
Investment
Management
|
$
|
727
|
|
$
|
700
|
|
$
|
641
|
|
4
|
%
|
13
|
%
|
Wealth
Management
|
305
|
|
299
|
|
277
|
|
2
|
|
10
|
|
Total revenue by line
of business
|
1,032
|
|
999
|
|
918
|
|
3
|
|
12
|
|
Provision for credit
losses
|
(7)
|
|
(4)
|
|
12
|
|
N/M
|
N/M
|
Noninterest
expense
|
691
|
|
677
|
|
661
|
|
2
|
|
5
|
|
Income before
taxes
|
$
|
348
|
|
$
|
326
|
|
$
|
245
|
|
7
|
%
|
42
|
%
|
|
|
|
|
|
|
Pre-tax operating
margin
|
34
|
%
|
33
|
%
|
27
|
%
|
|
|
Adjusted pre-tax
operating margin – Non-GAAP (a)
|
36
|
%
|
35
|
%
|
29
|
%
|
|
|
|
|
|
|
|
|
Net interest
revenue
|
$
|
47
|
|
$
|
47
|
|
$
|
47
|
|
—
|
%
|
—
|
%
|
|
|
|
|
|
|
Metrics:
|
|
|
|
|
|
Average
loans
|
$
|
12,248
|
|
$
|
11,871
|
|
$
|
11,503
|
|
3
|
%
|
6
|
%
|
Average
deposits
|
$
|
17,270
|
|
$
|
17,466
|
|
$
|
17,570
|
|
(1)
|
%
|
(2)
|
%
|
|
|
|
|
|
|
AUM (in billions)
(current period is preliminary) (b)
|
$
|
2,310
|
|
$
|
2,320
|
|
$
|
2,041
|
|
—
|
%
|
13
|
%
|
Wealth Management
client assets (in billions) (current period is preliminary)
(c)
|
$
|
307
|
|
$
|
305
|
|
$
|
265
|
|
1
|
%
|
16
|
%
|
(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. Also see page 6 for information related to
money market fee waivers.
-
- Investment Management – The year-over-year increase primarily
reflects higher market values and equity income, strategic equity
investment gains, the favorable impact of a weaker U.S. dollar and
higher performance fees, partially offset by higher money
market fee waivers. The sequential increase primarily reflects
higher market values, lower money market fee waivers and higher
performance fees.
- Wealth Management – The year-over-year and sequential increases
primarily reflect higher market values.
- Noninterest expense increased year-over-year and sequentially
primarily reflecting higher revenue-related expenses and
investments in growth initiatives. The year-over-year increase also
reflects the unfavorable impact of a weaker U.S. dollar, partially
offset by lower distribution and servicing expense.
OTHER SEGMENT primarily includes leasing operations,
certain corporate treasury activities, derivatives, business exits
and other corporate revenue and expense items.
|
|
|
|
(in
millions)
|
3Q21
|
2Q21
|
3Q20
|
Fee
revenue
|
$
|
12
|
|
$
|
13
|
|
$
|
7
|
|
Other
revenue
|
23
|
|
9
|
|
13
|
|
Total fee and other
revenue
|
35
|
|
22
|
|
20
|
|
Net interest
(expense)
|
(38)
|
|
(45)
|
|
(25)
|
|
Total
revenue
|
(3)
|
|
(23)
|
|
(5)
|
|
Provision for credit
losses
|
(3)
|
|
(5)
|
|
7
|
|
Noninterest
expense
|
16
|
|
49
|
|
—
|
|
(Loss) before
taxes
|
$
|
(16)
|
|
$
|
(67)
|
|
$
|
(12)
|
|
KEY DRIVERS
- Total revenue includes corporate treasury and other investment
activity, including hedging activity which has an offsetting
impact between fee and other revenue and net interest expense.
The increase in total revenue sequentially primarily reflects
investment and disposal gains.
- Noninterest expense increased year-over-year primarily
reflecting higher staff expense. The sequential decrease primarily
reflects lower staff expense and professional, legal and other
purchased services.
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. In 3Q21, the net impact of money market
fee waivers was $233 million, down
from $252 million in 2Q21, driven by
slightly higher short-term interest rates.
Money market fee
waivers
|
|
|
|
|
|
|
|
(in
millions)
|
3Q21
|
2Q21
|
1Q21
|
4Q20
|
3Q20
|
YTD21
|
YTD20
|
Investment services
fees:
|
|
|
|
|
|
|
|
Asset servicing
fees
|
$
|
(40)
|
|
$
|
(42)
|
|
$
|
(22)
|
|
$
|
(13)
|
|
$
|
(1)
|
|
$
|
(104)
|
|
$
|
(1)
|
|
Clearing services
fees
|
(84)
|
|
(88)
|
|
(74)
|
|
(64)
|
|
(57)
|
|
(246)
|
|
(116)
|
|
Issuer services
fees
|
(16)
|
|
(15)
|
|
(10)
|
|
(6)
|
|
(1)
|
|
(41)
|
|
(2)
|
|
Treasury services
fees
|
(2)
|
|
(3)
|
|
(3)
|
|
(2)
|
|
(3)
|
|
(8)
|
|
(5)
|
|
Total investment
services fees
|
(142)
|
|
(148)
|
|
(109)
|
|
(85)
|
|
(62)
|
|
(399)
|
|
(124)
|
|
Investment management
and performance fees
|
(109)
|
|
(115)
|
|
(89)
|
|
(56)
|
|
(42)
|
|
(313)
|
|
(86)
|
|
Distribution and
servicing revenue
|
(11)
|
|
(13)
|
|
(13)
|
|
(8)
|
|
(6)
|
|
(37)
|
|
(9)
|
|
Total fee
revenue
|
(262)
|
|
(276)
|
|
(211)
|
|
(149)
|
|
(110)
|
|
(749)
|
|
(219)
|
|
Less: Distribution
and servicing expense
|
29
|
|
24
|
|
23
|
|
15
|
|
9
|
|
76
|
|
16
|
|
Net impact of money
market fee waivers
|
$
|
(233)
|
|
$
|
(252)
|
|
$
|
(188)
|
|
$
|
(134)
|
|
$
|
(101)
|
|
$
|
(673)
|
|
$
|
(203)
|
|
|
|
|
|
|
|
|
|
Impact to revenue by
line of business (a):
|
|
|
|
|
|
|
|
Asset
Servicing
|
$
|
(47)
|
|
$
|
(50)
|
|
$
|
(29)
|
|
$
|
(13)
|
|
$
|
(4)
|
|
$
|
(126)
|
|
$
|
(5)
|
|
Pershing
|
(102)
|
|
(99)
|
|
(94)
|
|
(85)
|
|
(73)
|
|
(295)
|
|
(142)
|
|
Issuer
Services
|
(22)
|
|
(22)
|
|
(15)
|
|
(10)
|
|
(2)
|
|
(59)
|
|
(3)
|
|
Treasury
Services
|
(13)
|
|
(16)
|
|
(9)
|
|
(5)
|
|
(1)
|
|
(38)
|
|
(1)
|
|
Investment
Management
|
(76)
|
|
(85)
|
|
(61)
|
|
(34)
|
|
(28)
|
|
(222)
|
|
(66)
|
|
Wealth
Management
|
(2)
|
|
(4)
|
|
(3)
|
|
(2)
|
|
(2)
|
|
(9)
|
|
(2)
|
|
Total impact to
revenue by line of business
|
$
|
(262)
|
|
$
|
(276)
|
|
$
|
(211)
|
|
$
|
(149)
|
|
$
|
(110)
|
|
$
|
(749)
|
|
$
|
(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,
2021
|
June 30,
2021
|
Dec. 31,
2020
|
|
Consolidated
regulatory capital ratios: (a)
|
|
|
|
|
CET1 ratio
|
11.7
|
%
|
12.6
|
%
|
13.1
|
%
|
|
Tier 1 capital
ratio
|
14.4
|
|
15.2
|
|
15.8
|
|
|
Total capital
ratio
|
15.3
|
|
16.0
|
|
16.7
|
|
|
Tier 1 leverage
ratio
|
5.7
|
|
6.0
|
|
6.3
|
|
|
SLR
|
7.0
|
|
7.5
|
|
8.6
|
|
(b)
|
BNY Mellon
shareholders' equity to total assets ratio
|
9.3
|
%
|
9.7
|
%
|
9.8
|
%
|
|
BNY Mellon common
shareholders' equity to total assets ratio
|
8.3
|
%
|
8.7
|
%
|
8.8
|
%
|
|
|
|
|
|
|
Average
LCR
|
111
|
%
|
110
|
%
|
110
|
%
|
|
|
|
|
|
|
Book value per common
share
|
$
|
47.30
|
|
$
|
47.20
|
|
$
|
46.53
|
|
|
Tangible book value
per common share – Non-GAAP (c)
|
$
|
24.88
|
|
$
|
25.64
|
|
$
|
25.44
|
|
|
Common shares
outstanding (in thousands)
|
825,821
|
|
863,174
|
|
886,764
|
|
|
(a)
|
Regulatory capital
ratios for Sept. 30, 2021 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 Sept. 30, 2021 and June 30, 2021 was the Standardized Approach
for the CET1 and Tier 1 capital ratios and the Advanced Approaches
for the Total capital ratio, and for Dec. 31, 2020, was the
Advanced Approaches.
|
(b)
|
Reflects the
temporary exclusion of U.S. Treasury securities from the leverage
exposure used in the SLR calculation which increased our
consolidated SLR by 72 basis points at Dec. 31, 2020. The
temporary exclusion ceased to apply beginning April 1,
2021.
|
(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 $19.8
billion at Sept. 30, 2021, a
decrease of $1.6 billion compared
with June 30, 2021. The
decrease primarily reflects capital deployed through common stock
repurchases and dividends, partially offset by capital generated
through earnings.
NET INTEREST
REVENUE
|
|
Net interest
revenue
|
|
|
|
3Q21
vs.
|
(dollars in
millions; not meaningful - N/M)
|
3Q21
|
2Q21
|
3Q20
|
2Q21
|
3Q20
|
Net interest
revenue
|
$
|
641
|
|
$
|
645
|
|
$
|
703
|
|
(1)
|
%
|
(9)
|
%
|
Add: Tax equivalent
adjustment
|
3
|
|
3
|
|
2
|
|
N/M
|
N/M
|
Net interest revenue,
on a fully taxable equivalent ("FTE") basis – Non-GAAP
(a)
|
$
|
644
|
|
$
|
648
|
|
$
|
705
|
|
(1)
|
%
|
(9)
|
%
|
|
|
|
|
|
|
Net interest
margin
|
0.67
|
%
|
0.67
|
%
|
0.79
|
%
|
—
|
bps
|
(12)
|
bps
|
Net interest margin
(FTE) – Non-GAAP (a)
|
0.68
|
%
|
0.67
|
%
|
0.79
|
%
|
1
|
bps
|
(11)
|
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 year-over-year primarily
reflecting lower interest rates on interest-earning assets and the
impact of hedging activities (primarily offset in fee and other
revenue). This was partially offset by the benefit of lower funding
and deposit rates and higher deposit and loan balances.
- Sequentially, the decrease primarily reflects a decline in
interest-earning assets driven by lower deposits.
THE BANK OF NEW
YORK MELLON CORPORATION
|
Condensed
Consolidated Income Statement
|
|
(in
millions)
|
Quarter
ended
|
|
Year-to-date
|
|
Sept. 30,
2021
|
June 30,
2021
|
Sept. 30,
2020
|
|
Sept. 30,
2021
|
Sept. 30,
2020
|
|
|
Fee and other
revenue
|
|
|
|
|
|
|
|
Investment services
fees:
|
|
|
|
|
|
|
|
Asset servicing
fees
|
$
|
1,223
|
|
$
|
1,200
|
|
$
|
1,168
|
|
|
$
|
3,622
|
|
$
|
3,500
|
|
|
Clearing services
fees
|
423
|
|
435
|
|
397
|
|
|
1,313
|
|
1,298
|
|
|
Issuer services
fees
|
280
|
|
281
|
|
295
|
|
|
806
|
|
835
|
|
|
Treasury services
fees
|
165
|
|
160
|
|
152
|
|
|
482
|
|
445
|
|
|
Total investment
services fees
|
2,091
|
|
2,076
|
|
2,012
|
|
|
6,223
|
|
6,078
|
|
|
Investment management
and performance fees
|
913
|
|
889
|
|
835
|
|
|
2,692
|
|
2,483
|
|
|
Foreign exchange
revenue
|
185
|
|
184
|
|
149
|
|
|
600
|
|
587
|
|
|
Financing-related
fees
|
48
|
|
48
|
|
49
|
|
|
147
|
|
166
|
|
|
Distribution and
servicing
|
28
|
|
27
|
|
29
|
|
|
84
|
|
87
|
|
|
Total fee
revenue
|
3,265
|
|
3,224
|
|
3,074
|
|
|
9,746
|
|
9,401
|
|
|
Investment and other
income
|
127
|
|
89
|
|
61
|
|
|
225
|
|
240
|
|
|
Net securities
gains
|
2
|
|
2
|
|
9
|
|
|
4
|
|
27
|
|
|
Total other
revenue
|
129
|
|
91
|
|
70
|
|
|
229
|
|
267
|
|
|
Total fee and other
revenue
|
3,394
|
|
3,315
|
|
3,144
|
|
|
9,975
|
|
9,668
|
|
|
Net interest
revenue
|
|
|
|
|
|
|
|
Interest
revenue
|
693
|
|
685
|
|
820
|
|
|
2,116
|
|
3,333
|
|
|
Interest
expense
|
52
|
|
40
|
|
117
|
|
|
175
|
|
1,036
|
|
|
Net interest
revenue
|
641
|
|
645
|
|
703
|
|
|
1,941
|
|
2,297
|
|
|
Total
revenue
|
4,035
|
|
3,960
|
|
3,847
|
|
|
11,916
|
|
11,965
|
|
|
Provision for
credit losses
|
(45)
|
|
(86)
|
|
9
|
|
|
(214)
|
|
321
|
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
Staff
|
1,584
|
|
1,518
|
|
1,466
|
|
|
4,704
|
|
4,412
|
|
|
Software and
equipment
|
372
|
|
365
|
|
340
|
|
|
1,099
|
|
1,011
|
|
|
Professional, legal
and other purchased services
|
363
|
|
363
|
|
355
|
|
|
1,069
|
|
1,022
|
|
|
Sub-custodian and
clearing
|
129
|
|
132
|
|
119
|
|
|
385
|
|
344
|
|
|
Net
occupancy
|
120
|
|
122
|
|
136
|
|
|
365
|
|
408
|
|
|
Distribution and
servicing
|
76
|
|
73
|
|
85
|
|
|
223
|
|
261
|
|
|
Bank assessment
charges
|
34
|
|
35
|
|
30
|
|
|
103
|
|
100
|
|
|
Amortization of
intangible assets
|
19
|
|
20
|
|
26
|
|
|
63
|
|
78
|
|
|
Business
development
|
22
|
|
22
|
|
17
|
|
|
63
|
|
79
|
|
|
Other
|
199
|
|
128
|
|
107
|
|
|
473
|
|
364
|
|
|
Total noninterest
expense
|
2,918
|
|
2,778
|
|
2,681
|
|
|
8,547
|
|
8,079
|
|
|
Income
|
|
|
|
|
|
|
|
Income before income
taxes
|
1,162
|
|
1,268
|
|
1,157
|
|
|
3,583
|
|
3,565
|
|
|
Provision for income
taxes
|
219
|
|
241
|
|
213
|
|
|
681
|
|
694
|
|
|
Net income
|
943
|
|
1,027
|
|
944
|
|
|
2,902
|
|
2,871
|
|
|
Net loss (income)
attributable to noncontrolling interests related to consolidated
investment management funds
|
4
|
|
(5)
|
|
(7)
|
|
|
(6)
|
|
(4)
|
|
|
Net income applicable
to shareholders of The Bank of New York Mellon
Corporation
|
947
|
|
1,022
|
|
937
|
|
|
2,896
|
|
2,867
|
|
|
Preferred stock
dividends
|
(66)
|
|
(31)
|
|
(61)
|
|
|
(166)
|
|
(146)
|
|
|
Net income applicable
to common shareholders of The Bank of New York Mellon
Corporation
|
$
|
881
|
|
$
|
991
|
|
$
|
876
|
|
|
$
|
2,730
|
|
$
|
2,721
|
|
|
Earnings per share
applicable to the common shareholders of The Bank of New
York Mellon Corporation
|
Quarter
ended
|
|
Year-to-date
|
|
Sept. 30,
2021
|
June 30,
2021
|
Sept. 30,
2020
|
|
Sept. 30,
2021
|
Sept. 30,
2020
|
|
(in
dollars)
|
|
Basic
|
$
|
1.04
|
|
$
|
1.14
|
|
$
|
0.98
|
|
|
$
|
3.15
|
|
$
|
3.05
|
|
|
Diluted
|
$
|
1.04
|
|
$
|
1.13
|
|
$
|
0.98
|
|
|
$
|
3.14
|
|
$
|
3.04
|
|
|
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 – Non-GAAP 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 – Non-GAAP 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.
BNY Mellon has presented the measure of fee revenue, excluding
money market fee waivers – Non-GAAP. We believe that this
measure is useful information for investors on the impact of
current interest rates and market conditions on fee revenue growth
rates and the performance of our business.
|
|
|
|
Fee revenue
reconciliation (dollars in millions)
|
3Q21
|
3Q20
|
3Q21
vs. 3Q20
|
Fee
revenue
|
$
|
3,265
|
|
$
|
3,074
|
|
6
|
%
|
Less: Money market
fee waivers
|
(262)
|
|
(110)
|
|
|
Fee revenue, excluding
money market fee waivers – Non-GAAP
|
$
|
3,527
|
|
$
|
3,184
|
|
11
|
%
|
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, human capital management (including
related ambitions, objectives, aims and goals), 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," "ambition,"
"objective," "aim," "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 Annual Report on Form 10-K
for the year ended Dec. 31, 2020 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 and
other third parties in response to the pandemic, the availability,
use and effectiveness of vaccines 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, 2021. All
forward-looking statements in this Earnings Release speak only as
of October 19, 2021, 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, 2021, BNY Mellon had $45.3 trillion in assets under custody and/or
administration, and $2.3 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. ET on
Oct. 19, 2021. 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: 444308, 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.
ET on Oct. 19, 2021. Replays of the conference
call and audio webcast will be available beginning Oct. 19,
2021 at approximately 2:00 p.m. ET
through Nov. 19, 2021 by dialing
(888) 203-1112 (U.S.) or (719) 457-0820 (International), and using
the passcode: 3619155. 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
content:https://www.prnewswire.com/news-releases/bny-mellon-reports-third-quarter-2021-earnings-of-881-million-or-1-04-per-common-share-301403140.html
SOURCE BNY Mellon