Bank of New York Mellon Corp Quarterly Report for Q1 Ended Mar 31, 2024

Summary

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 trillion, 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%, 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.

Key Highlights

• 1Total 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.
• 2Assets 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.
• 3Net 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.
• 4The company returned $1.3 billion to common shareholders in Q1 2024, comprising $988 million in share repurchases and dividends.
• 5Net 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.
• 6Noninterest expense increased by 2% year-over-year, driven by investments and severance costs, with adjusted noninterest expense (excluding notable items) up 1%.
• 7The provision for credit losses was $27 million, primarily reflecting increased reserves for commercial real estate exposure.

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