10-QPeriod: Q1 FY2021

Bank of New York Mellon Corp Quarterly Report for Q1 Ended Mar 31, 2021

Filed May 6, 2021For Securities:BKBK-PKBNYBNY-PK

Summary

The Bank of New York Mellon Corporation (BK) reported a decrease in net income applicable to common shareholders to $858 million ($0.97 per diluted common share) for the first quarter of 2021, down from $944 million ($1.05 per diluted common share) in the prior year's first quarter. This decline was primarily driven by a 5% decrease in total revenue to $3.9 billion, impacted by a 20% drop in net interest revenue due to lower interest rates, which was only partially offset by growth in fee revenue. The company experienced an 5% increase in noninterest expense, mainly due to higher staff, technology, and unfavorable currency impacts. Despite the year-over-year decline in profitability, the company saw robust growth in Assets Under Custody/Administration (AUC/A) which increased by 18% to $41.7 trillion, and Assets Under Management (AUM) which grew by 23% to $2.2 trillion. The Investment and Wealth Management segment demonstrated strong performance with a 10% revenue increase and a 43% rise in income before taxes. The provision for credit losses benefited the quarter with a $83 million release, reflecting an improved macroeconomic forecast. BNY Mellon also continued its capital return program, repurchasing $699 million of its common stock.

Financial Highlights

38 data points
Beta

Net Income

$927.00M

EPS (Diluted)

$0.97

Total Assets

$464.98B

Cash & Equivalents

$9.37B

Free Cash Flow

-$3.39B

Financial Statements
Beta
Interest Expense$83.00M
Net Income$927.00M
EPS (Basic)$0.97
EPS (Diluted)$0.97
Shares Outstanding (Basic)882.56M
Shares Outstanding (Diluted)885.65M

Key Highlights

  • 1Net income applicable to common shareholders decreased by 8.9% year-over-year to $858 million.
  • 2Total revenue decreased by 5% year-over-year to $3.9 billion, primarily due to a 20% decline in net interest revenue.
  • 3Assets Under Custody/Administration (AUC/A) increased by 18% to $41.7 trillion.
  • 4Assets Under Management (AUM) increased by 23% to $2.2 trillion.
  • 5Investment and Wealth Management segment revenue grew by 10% and income before taxes increased by 43%.
  • 6Noninterest expense increased by 5% year-over-year, driven by higher staff, technology, and unfavorable currency impacts.
  • 7BNY Mellon repurchased $699 million of common stock and paid $277 million in common stock dividends during the quarter.

Frequently Asked Questions

The primary driver for the decrease in net income was a 5% year-over-year decline in total revenue, largely influenced by a 20% drop in net interest revenue due to lower interest rates. This was partially offset by growth in fee revenue.

The company saw significant growth in its assets under custody/administration (AUC/A), which increased by 18% to $41.7 trillion, and assets under management (AUM), which rose by 23% to $2.2 trillion. This growth was attributed to higher market values, net new business, and a weaker U.S. dollar.

BNY Mellon expects net interest revenue to continue decreasing in 2021 compared to 2020 due to persistently low interest rates. The company's net interest margin also saw a decrease year-over-year.

Noninterest expense increased by 5% year-over-year, mainly due to higher staff expenses, technology-related expenses, and the unfavorable impact of a weaker U.S. dollar. The company expects total reported noninterest expense to increase slightly for the full year 2021.