10-QPeriod: Q1 FY2019

Bank of New York Mellon Corp Quarterly Report for Q1 Ended Mar 31, 2019

Filed May 8, 2019For Securities:BKBK-PKBNYBNY-PK

Summary

The Bank of New York Mellon Corporation (BK) reported its first quarter 2019 financial results, showing a year-over-year decrease in net income applicable to common shareholders to $910 million, or $0.94 per diluted share, compared to $1.14 billion, or $1.10 per diluted share, in the first quarter of 2018. This decline was primarily driven by a 7% decrease in total revenue, which fell to $3.9 billion. The revenue reduction was attributed to a 9% drop in fee revenue, impacted by foreign currency translation, prior year divestitures, net asset management outflows, and lower foreign exchange revenue. Net interest revenue also decreased by 8% due to lower deposit and loan balances and higher deposit rates. Despite the revenue headwinds, the company managed to reduce non-interest expense by 1% to $2.7 billion, supported by lower incentive and volume-related expenses, although technology investments continued. The CET1 ratio improved to 11.1% from 10.7% at the end of 2018, reflecting solid capital generation. BNY Mellon also returned capital to shareholders through $555 million in common stock repurchases and $270 million in dividends.

Financial Highlights

36 data points
Beta

Net Income

$946.00M

EPS (Diluted)

$0.94

Total Assets

$346.13B

Cash & Equivalents

$8.29B

Free Cash Flow

-$1.21B

Financial Statements
Beta
Interest Expense$1.08B
Net Income$946.00M
EPS (Basic)$0.94
EPS (Diluted)$0.94
Shares Outstanding (Basic)962.40M
Shares Outstanding (Diluted)965.96M

Key Highlights

  • 1Net income applicable to common shareholders decreased 20% year-over-year to $910 million ($0.94/share) from $1.14 billion ($1.10/share).
  • 2Total revenue declined 7% year-over-year to $3.9 billion, primarily due to a 9% decrease in fee revenue and an 8% decrease in net interest revenue.
  • 3Fee revenue was impacted by foreign currency translation, prior year divestitures, net asset management outflows, and lower foreign exchange revenue.
  • 4Net interest revenue was affected by lower deposit and loan balances and higher deposit rates, partially offset by higher asset yields.
  • 5Non-interest expense decreased 1% year-over-year to $2.7 billion, aided by lower incentive and volume-related expenses, despite continued technology investments.
  • 6Common equity Tier 1 (CET1) ratio improved to 11.1% from 10.7% at year-end 2018.
  • 7BNY Mellon repurchased $555 million of common stock and paid $270 million in dividends during the quarter.

Frequently Asked Questions

The primary driver of the revenue decline was a 9% decrease in fee revenue, largely impacted by foreign currency translation, prior year divestitures, net asset management outflows, and lower foreign exchange revenue. Net interest revenue also contributed to the decline.

BNY Mellon reduced non-interest expense by 1% year-over-year. This was achieved through lower incentive expense, volume-related expenses, and bank assessment charges, which offset continued investments in technology. A stronger U.S. dollar also provided a favorable impact.

BNY Mellon's capital position strengthened, with the Common Equity Tier 1 (CET1) ratio increasing to 11.1% at March 31, 2019, from 10.7% at December 31, 2018. This increase reflects capital generated through earnings, unrealized gains on investment securities, and additional paid-in capital, partially offset by capital deployed through share repurchases and dividends.

BNY Mellon returned capital to shareholders by repurchasing approximately $555 million of its common stock and paying $270 million in dividends during the first quarter of 2019.