BNY Mellon Reports Third Quarter 2021 Earnings Of $881 Million Or $1.04 Per Common Share
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 11% excluding money market fee • 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%
• Repurchased 38.1 million common shares for $2.0 billion • Dividends of $296 million to common shareholders |
"Our financial performance this quarter reflects healthy and
Mr. Gibbons added, "This quarter we announced several
"During the quarter we returned $2.3 billion of capital to our |
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 |
$ |
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, |
June 30, |
Dec. 31, |
|||||||
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, |
June 30, |
Sept. 30, |
Sept. 30, |
Sept. 30, |
|||||||||||||
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 |
Quarter ended |
Year-to-date |
|||||||||||||||
Sept. 30, |
June 30, |
Sept. 30, |
Sept. 30, |
Sept. 30, |
|||||||||||||
(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 |
3Q21 |
3Q20 |
3Q21 vs. |
|||||
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.
SOURCE BNY Mellon
Related Links
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article