10-QPeriod: Q1 FY2017

Bank of New York Mellon Corp Quarterly Report for Q1 Ended Mar 31, 2017

Filed May 8, 2017For Securities:BKBK-PKBNYBNY-PK

Summary

Bank of New York Mellon Corporation (BK) reported a solid first quarter for 2017, demonstrating growth in key areas despite a stronger U.S. dollar impacting reported results. Net income applicable to common shareholders was $880 million, or $0.83 per diluted common share, an increase from both the prior year quarter ($804 million) and the preceding quarter ($822 million). The company saw record levels in Assets Under Custody/Administration (AUC/A) at $30.6 trillion, a 5% year-over-year increase, and Assets Under Management (AUM) grew 5% to $1.73 trillion, primarily driven by higher market values. Fee revenues showed resilience, with Investment Services fees up 4% and Investment Management fees up 4% year-over-year, reflecting stronger market values and new business wins, though partially offset by currency headwinds. BNY Mellon maintained a strong capital position with a CET1 ratio of 10.4% under the Advanced Approach (and 11.5% on a fully phased-in basis). Net interest revenue increased 3% year-over-year to $792 million, supported by higher interest rates and hedging activities, though slightly down from the prior quarter due to hedging impacts. Noninterest expense was largely stable year-over-year, with increases in consulting expenses for regulatory compliance offset by other cost reductions and currency impacts. The company also highlighted its ongoing efforts to enhance client experience through digital solutions and maintain financial strength.

Financial Highlights

36 data points
Beta

Net Income

$922.00M

EPS (Diluted)

$0.83

Total Assets

$337.54B

Cash & Equivalents

$8.27B

Free Cash Flow

-$1.51B

Financial Statements
Beta
Interest Expense$168.00M
Net Income$922.00M
EPS (Basic)$0.83
EPS (Diluted)$0.83
Shares Outstanding (Basic)1.04B
Shares Outstanding (Diluted)1.05B

Key Highlights

  • 1Net income applicable to common shareholders increased to $880 million ($0.83 per share) from $804 million ($0.73 per share) in Q1 2016.
  • 2Assets Under Custody/Administration (AUC/A) reached a record $30.6 trillion, up 5% year-over-year.
  • 3Assets Under Management (AUM) grew 5% year-over-year to $1.73 trillion.
  • 4Investment Services fees increased by 4% to $1.83 billion.
  • 5Investment Management and Performance fees rose by 4% to $842 million.
  • 6Net interest revenue increased by 3% to $792 million.
  • 7Common Equity Tier 1 (CET1) ratio was 10.4% (Advanced Approach), with an estimated fully phased-in CET1 ratio of 11.5% (Standardized Approach).

Frequently Asked Questions

BNY Mellon reported a net income of $880 million, or $0.83 per diluted common share, for the first quarter of 2017. This represents an increase compared to both the first quarter of 2016 ($804 million, or $0.73 per share) and the fourth quarter of 2016 ($822 million, or $0.77 per share).

AUC/A reached a record $30.6 trillion at March 31, 2017, a 5% increase from the previous year, primarily due to higher market values, partially offset by a stronger U.S. dollar. AUM also increased by 5% year-over-year to $1.73 trillion, also driven by higher market values but tempered by currency impacts.

Revenue growth was primarily driven by increases in Investment Services fees (up 4% to $1.83 billion) and Investment Management and Performance fees (up 4% to $842 million). These increases were mainly attributed to higher money market fees, net new business, and improved equity market values, although a stronger U.S. dollar and specific business downsizing had some offsetting effects.

BNY Mellon maintained a strong capital position. The CET1 ratio under the Advanced Approach was 10.4% at March 31, 2017. The estimated fully phased-in CET1 ratio under the Standardized Approach was 11.5% at March 31, 2017, showing an increase from the previous quarter.