Bank of New York Mellon Corp Quarterly Report for Q2 Ended Jun 30, 2023

Summary

Bank of New York Mellon (BK) reported solid results for the second quarter of 2023, with net income applicable to common shareholders reaching $1.0 billion, or $1.30 per diluted common share. This represents a notable increase from the $835 million, or $1.03 per diluted common share, reported in the same quarter last year. Total revenue rose by 5% year-over-year to $4.5 billion, primarily driven by a significant 33% increase in net interest revenue, which benefited from higher interest rates, partially offset by changes in balance sheet size and mix. While fee revenue saw a modest 2% decline due to lower foreign exchange revenue and the impact of a divestiture, this was cushioned by the abatement of money market fee waivers and growth in investment services fees. The company also demonstrated a commitment to shareholder returns by increasing its quarterly cash dividend by 14% to $0.42 per share. From a capital perspective, BNY Mellon maintained strong capital ratios, with its CET1 ratio at 11.1% as of June 30, 2023. Assets Under Custody/Administration (AUC/A) grew 9% to $46.9 trillion, indicating robust client activity and higher market values, though Assets Under Management (AUM) slightly decreased by 2% to $1.9 trillion due to lower market values and a divestiture. The strong performance across key segments, particularly Securities Services and Market and Wealth Services, coupled with prudent capital management and a commitment to shareholder returns, paints a positive picture for investors.

Key Highlights

• 1Net income applicable to common shareholders increased by 23% year-over-year to $1.0 billion ($1.30 per diluted share).
• 2Total revenue grew 5% to $4.5 billion, driven by a substantial 33% increase in net interest revenue due to higher interest rates.
• 3The company's Board of Directors approved a 14% increase in the quarterly cash dividend on common stock to $0.42 per share.
• 4Assets Under Custody/Administration (AUC/A) increased by 9% to $46.9 trillion, reflecting higher market values and client inflows.
• 5Securities Services segment revenue increased 12% and income before income taxes rose 91% (52% excluding notable items).
• 6Market and Wealth Services segment revenue increased 10%, with income before income taxes up 8%.
• 7Common Equity Tier 1 (CET1) ratio remained strong at 11.1% as of June 30, 2023.

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