8-KEarnings & ResultsExhibits & Filings

Bank of New York Mellon Corp 8-K Report, Financial Results (Feb 17, 2015)

Filed February 17, 2015For Securities:BKBK-PKBNYBNY-PK

Summary

This 8-K filing from The Bank of New York Mellon Corporation (BK) announces an adjustment to its previously reported fourth quarter 2014 financial results. The company has recognized an additional after-tax litigation expense of $598 million, primarily related to foreign exchange actions. This adjustment is made in anticipation of resolving these legal matters and has led to a significant reduction in the aggregate range of reasonably possible losses for legal proceedings for the quarter. As a consequence of this litigation expense, BNY Mellon's regulatory capital ratios have been slightly impacted. The Common Equity Tier 1 (CET1) ratio has been adjusted down to 11.2% from 11.6%, and the leverage capital ratio has been adjusted to 5.6% from 5.7%. These figures are based on Basel III components and methodologies. Investors should note that this filing amends and restates a prior earnings release and that the information provided contains forward-looking statements subject to risks and uncertainties.

Key Highlights

  • 1BNY Mellon recorded an additional $598 million after-tax litigation expense for Q4 2014.
  • 2The expense is primarily related to the resolution of foreign exchange-related legal actions.
  • 3This adjustment significantly reduces the aggregate range of reasonably possible losses for legal proceedings.
  • 4The CET1 ratio has been adjusted downwards to 11.2% from 11.6%.
  • 5The leverage capital ratio has been adjusted downwards to 5.6% from 5.7%.
  • 6The capital ratios are calculated based on Basel III components and the Advanced Approach framework.
  • 7This filing amends and restates the January 23, 2015 earnings release.

Frequently Asked Questions

The primary reason for the adjustment is an additional after-tax litigation expense of $598 million recognized in anticipation of resolving several legal matters, most notably foreign exchange-related actions.

The litigation expense has led to a slight decrease in the company's regulatory capital ratios. The Common Equity Tier 1 (CET1) ratio has been adjusted to 11.2% from 11.6%, and the leverage capital ratio has been adjusted to 5.6% from 5.7%.

Yes, this 8-K filing announces an adjustment to the previously issued earnings release from January 23, 2015, specifically regarding litigation expenses and their impact on financial results and capital ratios. The news release attached as Exhibit 99.1 amends and restates the earlier release.

The significant decline in the aggregate range of reasonably possible losses for legal proceedings suggests a higher degree of certainty regarding the final resolution costs of these matters, which is generally viewed positively by investors as it reduces future uncertainty.