10-QPeriod: Q3 FY2021

Bank of New York Mellon Corp Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 5, 2021For Securities:BKBK-PKBNYBNY-PK

Summary

The Bank of New York Mellon Corporation (BK) reported solid results for the third quarter of 2021, with net income applicable to common shareholders reaching $881 million, or $1.04 per diluted common share, an increase from $876 million, or $0.98 per diluted common share, in the third quarter of 2020. Total revenue rose by 5% to $4.0 billion, primarily driven by an 8% increase in fee and other revenue, which benefited from higher markets, increased client volumes, and a weaker U.S. dollar. This growth in fee revenue was partially offset by higher money market fee waivers, a common occurrence in the low-interest-rate environment. Investment Services and Investment and Wealth Management segments both showed strong performance. Investment Services revenue increased by 3%, while Income Before Income Taxes in Investment and Wealth Management saw a substantial 42% increase. The company also demonstrated a commitment to returning capital to shareholders, with the Board of Directors approving a $6.0 billion share repurchase program and a 10% increase in the quarterly cash dividend. Capital ratios remained strong, with a CET1 ratio of 11.7% at the end of the quarter, although slightly down from the previous quarter due to capital deployment via repurchases and dividends.

Financial Highlights

38 data points
Beta

Net Income

$947.00M

EPS (Diluted)

$1.04

Total Assets

$470.53B

Cash & Equivalents

$10.95B

Free Cash Flow

-$322.00M

Financial Statements
Beta
Interest Expense$52.00M
Net Income$947.00M
EPS (Basic)$1.04
EPS (Diluted)$1.04
Shares Outstanding (Basic)844.09M
Shares Outstanding (Diluted)849.03M

Key Highlights

  • 1Net income applicable to common shareholders increased to $881 million ($1.04/share) from $876 million ($0.98/share) year-over-year.
  • 2Total revenue grew 5% to $4.0 billion, primarily driven by an 8% increase in fee and other revenue.
  • 3Fee revenue, excluding money market fee waivers, increased 11% on a Non-GAAP basis.
  • 4Investment and Wealth Management segment revenue increased 12%, with Income Before Income Taxes up 42%.
  • 5Investment Services segment revenue increased 3%, with AUC/A (Assets Under Custody/Administration) growing 17% to $45.3 trillion.
  • 6Announced a $6.0 billion share repurchase program and increased the quarterly cash dividend by 10% to $0.34 per share.
  • 7CET1 ratio remained strong at 11.7%, despite capital deployment through repurchases and dividends.

Frequently Asked Questions

The primary driver of revenue growth was the 8% increase in fee and other revenue, which was supported by higher market values, increased client volumes, and the favorable impact of a weaker U.S. dollar.

The low-interest-rate environment led to a 9% decrease in net interest revenue compared to the third quarter of 2020. Additionally, the company continued to implement money market fee waivers to protect investors from negative returns, which impacted fee revenues.

BNY Mellon's Board of Directors approved a significant share repurchase program of up to $6.0 billion of common stock through the fourth quarter of 2022. They also increased the quarterly cash dividend on common stock by 10%.

BNY Mellon maintains a strong capital position. The CET1 ratio was 11.7% at September 30, 2021, and the Tier 1 leverage ratio was 5.7%. These ratios are above regulatory requirements, although the CET1 ratio decreased from the prior quarter due to capital deployment actions.