01—Abstract
Summary
Summary of the 10-K filed February 27, 2025. Cited figures are marked; the original filing is the authoritative source.
The Bank of New York Mellon (BNY) closed 2024 with a strong earnings rebound.
Net income applicable to common shareholders rose 41% to $4.3 billiona, or $5.80 per diluted share (up from $3.89), and was depressed by notable items including severance, litigation reserves and FDIC special assessment adjustments. Excluding these items, adjusted diluted EPS was $6.03, up 19%. Total revenue grew 5% to $18.6 billion, driven by 6% fee revenue growth from higher market values, net new business and FX volumes, while noninterest expense fell 4% to $12.7 billion, reflecting FDIC assessment adjustments and efficiency savings.
Pre-tax operating margin improved to 31% from 24%, and ROE rose to 11.9% from 8.6%. Assets under custody and/or administration reached a record $52.1 trillionb (up 9%) and assets under management were $2.0 trillion (up 3%). Fee revenue accounts for about 73% of total revenue, which supports earnings durability relative to balance-sheet-driven peers.
Net interest income slipped 1% to $4.3 billionc as deposit mix shifted, and management expects 2025 net interest income to rise and noninterest expense to increase slightly. Capital and shareholder returns remain central to the investment case. BNY repurchased $3.1 billion of common stock (48.9 million shares) and paid $1.5 billion in dividends, and the quarterly dividend was raised 12% to $0.47.
The CET1 ratio declined to 11.2%d (Standardized Approach) from 11.5%, and the company remains well capitalized. Key risks flagged include operational and cybersecurity risk, interest rate sensitivity, concentrated exposure to financial institutions and commercial real estate, and the Parent's dependence on subsidiary dividends and IHC support.
02—Key points
Key Highlights
- Net income applicable to common shareholders of $4.3B (+41%); diluted EPS $5.80 GAAP vs. $6.03 adjusted (+19%) excluding notable items
- Total revenue up 5% to $18.6B; fee revenue up 6%, with fees representing 73% of total revenue
- Noninterest expense down 4% to $12.7B; pre-tax operating margin expanded to 31% from 24%
- Record AUC/A of $52.1T (+9%) and AUM of $2.0T (+3%); Wealth Management client assets $327B
- Returned $4.4B to shareholders in 2024 via $3.1B in buybacks and $1.3B in common dividends; quarterly dividend raised 12% to $0.47
- CET1 ratio of 11.2% (Standardized) vs. 11.5% a year earlier; BNY remains well capitalized; Moody's upgraded issuer ratings to Aa3
- 2025 outlook: net interest income expected to rise; noninterest expense expected to increase slightly
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 27, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $18.62B$17.70B | +5.2% |
| Net Income | $4.53B$3.30B | +37.2% |
| EPS (Basic) | $5.84$3.91 | +49.4% |
| EPS (Diluted) | $5.80$3.89 | +49.1% |
| Shares Outstanding (Basic) | 742.59M784.07M | −5.3% |
| Shares Outstanding (Diluted) | 748.10M787.80M | −5.0% |
05—Questions
Frequently Asked Questions
Why did reported earnings grow so much faster than adjusted results?
The 2023 results included larger notable items, including a $632 million initial FDIC special assessment accrual, severance and litigation charges, and a fair value reduction in a contingent consideration receivable. In 2024, the net FDIC adjustment was a benefit of $63 million, so the GAAP comparison benefited from a lower prior-year cost base. Adjusted EPS grew 19%, a more representative measure of underlying growth.
Is BNY's fee-based model resilient to market downturns?
Fee revenue is about 73% of total revenue, which diversifies income away from pure interest margin. However, the fee base is sensitive to market values, client activity and AUM flows. The 10-K notes that a 5% change in global equity markets would move fee revenue by less than 1% and diluted EPS by $0.05 to $0.08, and that market-linked fees can fall with lower transaction volumes or fund outflows, as seen in net long-term AUM outflows of $52 billion in 2024.
How is the net interest income outlook changing?
Net interest income fell 1% to $4.3 billion in 2024 due to deposit mix shifts toward interest-bearing balances, partly offset by higher securities yields. Management expects 2025 net interest income to increase versus 2024, based on forward rates as of December 31, 2024, and on deposit mix and reinvestment yields. Sensitivity analysis shows a 100 bp parallel rate increase would raise net interest income by about $125 million, and a decrease would reduce it by about $194 million.
How strong is BNY's capital position after heavy buybacks?
BNY remains well capitalized. The CET1 ratio was 11.2% under the Standardized Approach, down from 11.5%, reflecting $4.4 billion of capital returned against $4.0 billion of CET1 generation. The Tier 1 leverage ratio declined to 5.7%, and the SLR fell to 6.5%. The company's external TLAC ratio of 30.2% of RWA comfortably exceeds the 21.5% requirement with buffers.
What are the key risks highlighted for investors?
The 10-K emphasizes operational and cybersecurity risk given the scale of transaction processing, interest rate sensitivity of a large securities portfolio (about $137 billion, with roughly $6.2 billion of net unrealized losses), concentrated credit exposure to financial institutions ($48.4 billion total exposure) and commercial real estate ($9.9 billion), and the Parent's reliance on subsidiary dividends and support from its intermediate holding company. Pending legal and regulatory matters carry a reasonably possible loss range of up to $690 million above accruals.
06—Continue