01—Abstract
Summary
Summary of the 10-Q filed May 3, 2024. Cited figures are marked; the original filing is the authoritative source.
Bank of New York Mellon Corporation (BK) reported its first quarter 2024 results, demonstrating growth in fee and other revenue, driven by higher market values and client activity, while navigating a decrease in net interest income due to balance sheet mix changes, partially offset by higher interest rates.
The company's Assets Under Custody/Administration (AUC/A) increased by 5% to $48.8 trilliona, and Assets Under Management (AUM) grew by 6% to $2.0 trillion, both primarily attributed to higher market values. BNY Mellon returned $1.3 billion to shareholders through share repurchases and dividends, underscoring a commitment to capital return. The company maintained strong capital ratios, with its CET1 ratio under the Standardized Approach at 10.8%, exceeding regulatory minimums.
While noninterest expense saw a slight increase driven by investments and severance, adjusted noninterest expense grew by a more modest 1%b, reflecting ongoing efficiency efforts. The provision for credit losses increased, primarily due to reserve increases related to commercial real estate exposure, highlighting a key area of focus for risk management.
02—Key points
Key Highlights
- Total revenue increased by 3% compared to the prior year's first quarter, primarily driven by a 5% increase in fee revenue, which benefited from higher market values and client activity.
- Assets Under Custody/Administration (AUC/A) grew 5% year-over-year to $48.8 trillion, and Assets Under Management (AUM) increased 6% to $2.0 trillion, both largely due to higher market values.
- Net income applicable to common shareholders was $953 million ($1.25 per diluted share), an increase from $911 million ($1.13 per diluted share) in the first quarter of 2023.
- The company returned $1.3 billion to common shareholders in Q1 2024, comprising $988 million in share repurchases and dividends.
- Net interest income decreased by 8% year-over-year, primarily due to changes in balance sheet mix, though this was partially offset by higher interest rates.
- Noninterest expense increased by 2% year-over-year, driven by investments and severance costs, with adjusted noninterest expense (excluding notable items) up 1%.
- The provision for credit losses was $27 million, primarily reflecting increased reserves for commercial real estate exposure.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed May 3, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Interest Expense | $5.06B$2.81B | +79.7% |
| Net Income | $1.02B$982.00M | +4.4% |
| EPS (Basic) | $1.26$1.13 | +11.5% |
| EPS (Diluted) | $1.25$1.13 | +10.6% |
| Shares Outstanding (Basic) | 756.94M803.34M | −5.8% |
| Shares Outstanding (Diluted) | 762.27M807.72M | −5.6% |
05—Questions
Frequently Asked Questions
How did BNY Mellon's revenue perform in Q1 2024 compared to Q1 2023?
Total revenue increased by 3% compared to the first quarter of 2023. This growth was primarily driven by a 5% increase in fee revenue, which benefited from higher market values and client activity. Investment and other revenue also saw an increase, reflecting higher trading and seed capital results.
What was the trend in BNY Mellon's Assets Under Custody/Administration (AUC/A) and Assets Under Management (AUM)?
AUC/A increased by 5% year-over-year to $48.8 trillion, and AUM grew by 6% to $2.0 trillion. These increases were mainly attributable to higher market values.
How did the company manage its expenses in the quarter?
Total noninterest expense increased by 2% compared to the prior year's first quarter, mainly due to higher investments, severance expense, and employee merit increases. However, excluding notable items, adjusted noninterest expense increased by a more modest 1%, indicating efforts to manage costs while investing in strategic areas.
What is the company's capital position and how is it returning capital to shareholders?
BNY Mellon maintained strong capital ratios, with a CET1 ratio under the Standardized Approach of 10.8% at March 31, 2024. The company returned $1.3 billion to common shareholders in Q1 2024 through $988 million in share repurchases and dividends, demonstrating a commitment to capital return.
What factors impacted the company's net interest income?
Net interest income decreased by 8% compared to the first quarter of 2023. This decline was primarily due to changes in the balance sheet mix, although higher interest rates provided a partial offset.
06—Continue