How did the company manage expenses?

BNY Mellon successfully reduced noninterest expense by 4% year-over-year to $2.6 billion. This reduction was mainly attributed to lower staff expenses and the favorable impact of a stronger U.S. dollar. However, the company noted continued investments in technology, which are expected to increase in 2019.

What is the company's capital return strategy?

BNY Mellon is committed to returning capital to shareholders. In Q2 2019, the company repurchased $750 million of common stock and increased its quarterly cash dividend by 11% to $0.31 per share. Additionally, the Board of Directors approved a new share repurchase program of up to $3.94 billion, commencing in Q3 2019.

What is the company's capital position?

The company maintained a strong capital position. The Common Equity Tier 1 (CET1) ratio under the Advanced Approach was 11.1% at June 30, 2019, which is well above regulatory minimums and provides a buffer against potential losses.

BK/BK-PK 10-Q Quarterly Report Q2 FY2019 — Revenue, Net Income, EPS

Q: What were the main drivers of the revenue decrease?

The 5% decrease in total revenue was primarily driven by a 3% decline in fee revenue, largely due to cumulative AUM outflows since Q2 2018, the unfavorable impact of a stronger U.S. dollar, and lower foreign exchange and securities lending revenue. Net interest revenue decreased by 12%, as higher deposit and funding costs, along with lower non-interest-bearing deposits, more than offset improved yields on interest-earning assets.

Summary

The Bank of New York Mellon Corporation (BK) reported a net income applicable to common shareholders of $969 million, or $1.01 per diluted share, for the second quarter of 2019. This represents a decrease from the $1.06 billion, or $1.03 per diluted share, reported in the same quarter of the prior year. Total revenue declined by 5% to $3.9 billion, primarily due to a 3% decrease in fee revenue and a 12% decrease in net interest revenue. Fee revenue was impacted by AUM outflows, a stronger U.S. dollar, and lower foreign exchange and securities lending revenue, partially offset by increases in Issuer Services and clearance volumes. Net interest revenue declined due to higher funding costs and lower non-interest-bearing deposits, outpacing yield improvements. Despite the revenue pressures, the company demonstrated expense control, with noninterest expense decreasing by 4% to $2.6 billion, driven by lower staff expenses and the favorable impact of a stronger U.S. dollar. The company also returned capital to shareholders, repurchasing $750 million of common stock and increasing its quarterly cash dividend by 11% to $0.31 per share. BNY Mellon maintained a strong capital position, with a CET1 ratio of 11.1% at June 30, 2019.

Financial Highlights

36 data points

Beta

Net Income

$1.02B

EPS (Diluted)

$1.01

Total Assets

$381.17B

Cash & Equivalents

$5.56B

Free Cash Flow

-$2.02B

Financial Statements

Beta

Interest Expense	$1.16B
Net Income	$1.02B
EPS (Basic)	$1.01
EPS (Diluted)	$1.01
Shares Outstanding (Basic)	951.28M
Shares Outstanding (Diluted)	953.93M

Key Highlights

1Net income applicable to common shareholders decreased 8% year-over-year to $969 million ($1.01 per diluted share).
2Total revenue decreased 5% year-over-year to $3.9 billion, impacted by lower fee and net interest revenue.
3Fee revenue declined 3%, primarily due to AUM outflows and a stronger U.S. dollar.
4Net interest revenue decreased 12%, driven by higher deposit costs and lower deposit balances.
5Noninterest expense decreased 4% to $2.6 billion, aided by lower staff expenses and a stronger U.S. dollar.
6BNY Mellon returned $1.02 billion to shareholders through dividends ($270 million) and share repurchases ($750 million).
7The Common Equity Tier 1 (CET1) ratio remained strong at 11.1%.

Bank of New York Mellon Corp Quarterly Report for Q2 Ended Jun 30, 2019

Summary

Financial Highlights

Key Highlights

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