Bank of New York Mellon Corp Quarterly Report for Q1 Ended Mar 31, 2023

Summary

Bank of New York Mellon Corporation (BK) reported a net income applicable to common shareholders of $905 million, or $1.12 per diluted common share, for the first quarter of 2023. This represents a significant increase compared to $699 million, or $0.86 per diluted common share, in the first quarter of 2022. The company saw a 11% increase in total revenue, reaching $4.4 billion, primarily driven by a substantial 62% rise in net interest revenue, which benefited from higher interest rates on interest-earning assets. Fee revenue remained flat year-over-year, impacted by various factors including the abatement of money market fee waivers and an $88 million reduction related to the accelerated amortization of deferred costs for depositary receipts services. BNY Mellon returned $1.6 billion to common shareholders through repurchases and dividends, signaling a commitment to capital return while maintaining a strong capital position with a CET1 ratio of 11.0% as of March 31, 2023. The company's core Securities Services segment demonstrated robust growth with a 19% increase in total revenue and a 100% increase in income before taxes, largely due to the prior year's Russia-related charge reversal. The Market and Wealth Services segment also showed healthy growth in revenue and income. Conversely, the Investment and Wealth Management segment experienced a decline in both revenue and income, reflecting lower market values, the impact of a stronger U.S. dollar, and the divestiture of Alcentra. Overall, BNY Mellon navigated a dynamic economic environment, benefiting from rising interest rates while managing expenses effectively. Investors will closely watch the impact of recent banking sector events, such as increased deposit balances and potential FDIC assessments, as well as the company's continued efforts to drive growth across its service lines.

Key Highlights

• 1Net income applicable to common shareholders increased by 30% year-over-year to $905 million ($1.12 per diluted share).
• 2Total revenue grew 11% to $4.4 billion, driven by a 62% increase in net interest revenue due to higher interest rates.
• 3Fee revenue remained flat year-over-year, impacted by the abatement of money market fee waivers and other adjustments.
• 4Securities Services segment revenue increased 19% and income before taxes grew 100%, benefiting from a prior-year charge reversal.
• 5Market and Wealth Services segment revenue increased 22% and income before taxes rose 41%.
• 6Investment and Wealth Management segment revenue decreased 14% and income before taxes fell 56%.
• 7The company returned $1.6 billion to shareholders through common stock repurchases ($1.3 billion) and dividends ($0.3 billion).

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