Bank of New York Mellon Corp Quarterly Report for Q3 Ended Sep 30, 2018

Summary

Bank of New York Mellon Corporation (BK) reported a net income applicable to common shareholders of $1.08 billion, or $1.06 per diluted common share, for the third quarter of 2018, an increase from $983 million, or $0.94 per diluted common share, in the third quarter of 2017. This improvement was driven by a 1% increase in total revenue to $4.1 billion, primarily due to a 6% rise in net interest revenue, benefiting from higher interest rates, and a 1% increase in fee revenue, supported by higher equity market values and improved collateral management and clearance volumes. Despite a 3% increase in noninterest expense, largely attributed to technology investments and higher litigation expenses, the company maintained a strong capital position with a CET1 ratio of 11.2%. BNY Mellon also returned capital to shareholders through $602 million in common stock repurchases and $283 million in dividends. The results demonstrate resilience and continued strategic investment, positioning the company for ongoing performance in its core Investment Services and Investment Management segments.

Key Highlights

• 1Net income applicable to common shareholders increased to $1.08 billion ($1.06 per share) in Q3 2018, up from $983 million ($0.94 per share) in Q3 2017.
• 2Total revenue rose 1% year-over-year to $4.1 billion, driven by a 6% increase in net interest revenue (higher rates) and a 1% increase in fee revenue (higher equity markets, improved collateral/clearance volumes).
• 3Noninterest expense increased 3% to $2.7 billion, primarily due to investments in technology and higher litigation expenses.
• 4The CET1 ratio (Advanced Approach) stood at a strong 11.2% at September 30, 2018, up from 11.0% at June 30, 2018.
• 5BNY Mellon repurchased $602 million of common stock and paid $283 million in dividends during the third quarter.
• 6Investment Services segment revenue increased 3%, with AUC/A growing 7% to $34.5 trillion.
• 7Investment Management segment revenue increased 2%, with AUM up slightly to $1.8 trillion.

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