10-KPeriod: FY2009

Bank of New York Mellon Corp Annual Report, Year Ended Dec 31, 2009

Filed February 26, 2010For Securities:BKBK-PKBNYBNY-PK

Summary

This 10-K filing for The Bank of New York Mellon Corporation (BNY Mellon) as of December 31, 2009, highlights the company's structure post-merger with Mellon Financial Corporation and its substantial scale in assets under management ($1.1 trillion) and custody/administration ($22.3 trillion). The report details BNY Mellon's diverse business segments, including Asset Management, Wealth Management, Asset Servicing, Issuer Services, Clearing Services, and Treasury Services. It also emphasizes the company's adherence to a comprehensive regulatory framework, crucial for maintaining stability and trust in the financial services industry, especially in the wake of the 2008 financial crisis. Investors should note the significant discussion around regulatory oversight, capital adequacy requirements (Basel II implementation), and potential legislative changes impacting the financial sector. The filing addresses various risk factors, including market volatility, competition, dependence on fee-based revenues, and operational risks. Despite operating in a challenging economic environment, BNY Mellon underscores its commitment to client service, technological innovation, and robust risk management practices as key differentiators.

Financial Highlights

41 data points
Beta

Revenue

$7.65B

Net Income

-$1.08B

-14.1% Net Margin

EPS (Diluted)

$-1.16

Total Assets

$212.22B

Cash & Equivalents

$3.73B

Free Cash Flow

$3.46B

Financial Statements
Beta
Revenue$7.65B
Operating Income-$814.00M
Interest Expense$593.00M
Net Income-$1.08B
EPS (Basic)$-1.16
EPS (Diluted)$-1.16
Shares Outstanding (Basic)1.18B
Shares Outstanding (Diluted)1.18B

Key Highlights

  • 1BNY Mellon is a global financial services company with approximately $1.1 trillion in assets under management and $22.3 trillion in assets under custody and administration.
  • 2The company operates through seven distinct business segments: Asset Management, Wealth Management, Asset Servicing, Issuer Services, Clearing Services, Treasury Services, and Other.
  • 3BNY Mellon is subject to extensive U.S. and international banking laws and regulations, including those governing capital levels, permissible activities, and depositor protection.
  • 4The company is actively implementing Basel II capital adequacy guidelines and preparing for potential future reforms proposed by the Basel Committee and the U.S. Treasury.
  • 5Key risk factors include market volatility, intense competition, dependence on fee-based revenues, operational risks, and the potential impact of evolving legislative and regulatory initiatives.
  • 6BNY Mellon reported that all its bank subsidiaries were 'well-capitalized' as of December 31, 2009, according to regulatory definitions.
  • 7The company repurchased $3 billion of Series B Preferred Stock from the U.S. Treasury in June 2009 as part of the TARP Capital Purchase Program, along with the associated warrant.

Frequently Asked Questions

As of December 31, 2009, BNY Mellon's bank subsidiaries were classified as 'well-capitalized' according to regulatory standards. The company's Total capital ratio to risk-adjusted assets was 16.0%, and its Tier 1 capital ratio was 12.1%. The leverage ratio was 6.5%. The report also notes that all bank subsidiaries met the 'well-capitalized' criteria under the Prompt Corrective Action framework.

Key risks highlighted include the impact of current global financial market and economic uncertainties, high levels of market volatility, potential write-downs of financial instruments, intense competition across all business segments, significant dependence on fee-based revenues which can be affected by market activity and asset values, and operational risks related to providing services and information systems. The report also emphasizes the substantial impact of evolving legislative and regulatory initiatives on the company's financial condition, operations, and business opportunities.

BNY Mellon is actively involved in implementing Basel II capital guidelines and is closely monitoring proposed reforms from the Basel Committee and the U.S. Treasury concerning capital and liquidity requirements. The company acknowledges that these initiatives could significantly impact its financial condition, operations, capital position, and ability to pursue business opportunities. The filing also mentions ongoing compliance with anti-money laundering laws, the USA PATRIOT Act, and other regulations governing its diverse operations.

The filing states that the merger between The Bank of New York Company, Inc. and Mellon Financial Corporation occurred on July 1, 2007, with BNY Mellon as the surviving entity. The merger was accounted for as a purchase. This integration forms the basis of the current BNY Mellon structure and its combined scale of assets under management and custody, contributing to its position as a major global financial services provider.