10-QPeriod: Q3 FY2013

Bank of New York Mellon Corp Quarterly Report for Q3 Ended Sep 30, 2013

Filed November 8, 2013For Securities:BKBK-PKBNYBNY-PK

Summary

The Bank of New York Mellon Corporation (BK) reported solid results for the third quarter of 2013, driven by growth in its core businesses and a significant one-time benefit from a favorable tax court ruling. Assets under custody and/or administration (AUC/A) increased to $27.4 trillion, up 4% year-over-year, while assets under management (AUM) reached a record $1.53 trillion, a 13% increase. This growth contributed to higher investment services fees and investment management and performance fees, signaling continued client engagement and market appreciation. The company's net income applicable to common shareholders was $967 million, or $0.82 per diluted share, bolstered by a $261 million after-tax benefit ($0.22 per diluted share) from the U.S. Tax Court's partial reconsideration of a tax decision. Excluding this benefit, adjusted net income was $706 million, or $0.60 per diluted share. The company also maintained a strong capital position, with its estimated Basel III Tier 1 common equity ratio at 10.1% on a fully phased-in basis, indicating a solid buffer against regulatory requirements.

Financial Highlights

38 data points
Beta

Revenue

$3.77B

Net Income

$975.00M

25.8% Net Margin

EPS (Diluted)

$0.82

Total Assets

$371.95B

Cash & Equivalents

$7.30B

Free Cash Flow

$790.00M

Financial Statements
Beta
Revenue$3.77B
Operating Income$1.56B
Interest Expense$83.00M
Net Income$975.00M
EPS (Basic)$0.82
EPS (Diluted)$0.82
Shares Outstanding (Basic)1.15B
Shares Outstanding (Diluted)1.15B

Key Highlights

  • 1Assets Under Custody and/or Administration (AUC/A) grew 4% year-over-year to $27.4 trillion.
  • 2Assets Under Management (AUM) reached a record $1.53 trillion, up 13% year-over-year.
  • 3Net income applicable to common shareholders was $967 million ($0.82 per diluted share), including a significant tax benefit.
  • 4Investment services fees increased 4% year-over-year, driven by higher clearing, asset servicing, and issuer services revenue.
  • 5Investment management and performance fees rose 5% year-over-year.
  • 6The estimated Basel III Tier 1 common equity ratio (Standardized Approach, fully phased-in) was 10.1% at the end of the quarter.
  • 7BNY Mellon repurchased $121 million of common stock during the quarter.

Frequently Asked Questions

The primary driver of net income was strong performance in the core investment services and investment management businesses, significantly boosted by a $261 million after-tax benefit ($0.22 per diluted share) resulting from a favorable U.S. Tax Court ruling related to foreign tax credits.

Assets under custody and/or administration (AUC/A) increased by 4% year-over-year to $27.4 trillion. Assets under management (AUM) reached a record $1.53 trillion, marking a 13% increase year-over-year, primarily driven by net new business and higher market values.

BNY Mellon's estimated Basel III Tier 1 common equity ratio, calculated under the Standardized Approach on a fully phased-in basis, was 10.1% at September 30, 2013. This ratio was up from 9.3% at June 30, 2013, indicating a strong capital base.

Revenue growth was primarily driven by increases in investment services fees (up 4% year-over-year, led by asset servicing and clearing services) and investment management and performance fees (up 5% year-over-year), reflecting higher market values and net new business.