The Bank of New York Mellon Corporation
CEO : Mr. Robin Antony Vince
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2024 Q3 | 6.4% YoY | 22.5% | 22.8% | 2025-01-15 |
Dermot McDonogh says,
2024 Financial Performance Overview
- Total revenue for 2024 reached $18.6 billion, marking a 5% increase year-over-year.
- Fee revenue increased by 6%, with investment services fees growing 7% due to net-new business and higher market values.
- Investment management and performance fees rose 3%, with higher market values offset by a mix of AUM flows.
- Despite muted volatility, foreign exchange revenue saw a 9% rise driven by higher client volumes.
- Expenses were reported at $12.7 billion, down 4% year-over-year, but up 1% excluding notable items due to increased investments and employee merit increases.
Fourth Quarter 2024 Highlights
- Fourth-quarter revenue was $4.8 billion, an 11% increase year-over-year.
- Fee revenue during the quarter rose by 9%, with investment services fees increasing by 9%.
- Assets under custody and/or administration (AUCA) were at $52.1 trillion, up 9% year-over-year.
- Foreign exchange revenue increased by 24% driven by higher client volumes.
- Net interest income increased by 8%, bolstered by higher yields on investment securities.
Capital and Liquidity Status
| Metric | Value | Change |
|---|---|---|
| Tier 1 Leverage Ratio | 5.7% | Decreased by 4% sequentially |
| CET1 Ratio | 11.2% | Decreased by 5% sequentially |
| Liquidity Coverage Ratio | 115% | — |
| Net Stable Funding Ratio | 132% | — |
- The company returned $1.1 billion to shareholders in the fourth quarter through dividends and share repurchases.
Segment Performance
- Security Services revenue was $2.3 billion, up 7% year-over-year.
- Market and Wealth Services revenue reached $1.7 billion, up 11% year-over-year.
- Investment and Wealth Management revenue was $873 million, up 29% year-over-year, driven by a 41% increase in Investment Management.
Outlook for 2025
- The company expects mid-single-digit percentage growth in net interest income (NII) for 2025.
- Fee revenue is anticipated to grow, with expenses rising 1% to 2% year-over-year excluding notable items.
- Effective tax rate for 2025 is projected to be in the range of 22% to 23%.
- The strategy continues to focus on growth opportunities while maintaining robust capital returns to shareholders.
Robin Vince says,
Financial Performance Highlights for 2024
- Record Net Income and Revenue: BNY delivered a record net income of $4.3 billion on record revenue of $18.6 billion.
- Return on Tangible Common Equity: Achieved a return of 23% for the year.
- Positive Operating Leverage: Delivered 968 basis points of positive operating leverage on a reported basis and 288 basis points excluding notable items.
- Fee Revenue and NII: Fee revenue grew by 6% year-over-year, while NII was down 1%, outperforming initial outlook by approximately 9 percentage points.
- Expense Management: Expenses were reduced by 4% on a reported basis and increased by 1% excluding notable items.
Strategic Initiatives and Growth Opportunities
- Commercial Model Rollout: Rolled out a new commercial coverage model to improve client experience and deepen relationships, marking a milestone in operationalizing One BNY.
- Acquisition and Product Development: Acquisition of Archer and development of new client solutions like CollateralOne, Alts Bridge, and NextGen ETF servicing platform.
- Investment in Digitization and AI: Increased investments generating $0.5 billion of efficiency savings through digitization and leveraging AI.
- Platform Operating Model Transition: Transitioned approximately 13,000 employees into a new platform’s operating model.
Market Position and Future Outlook
- Strong Client Franchise: BNY plays a central role in global capital markets with $52 trillion of AUCA and $5.6 trillion on the collateral management platform.
- Growth in Treasury and Wealth Services: Treasury services, clearance, collateral management, and corporate trust are among the fastest-growing businesses.
- Emphasis on Digital Assets: BNY is an early mover, supporting the vast majority of digital asset exchange-traded products in the US and Canada.
- Outlook for 2025: Entering the year with strong momentum but cautious optimism due to geopolitical tensions and market volatility.
Culture and Workforce Development
- Employee and Community Support: Committed to matching employee donations for wildfire relief efforts in Los Angeles.
- Recruitment and Talent Development: Successful in attracting top talents and expanding the intern and analyst class.
- Cultural Transformation: Focus on improving market visibility and modernizing brand and logo to enhance recruiting efforts.
- Commitment to Execution: Emphasizing the importance of delivering on commitments and strategic priorities.
Significant Market Trends and Strategic Priorities
- Trend Toward Private Markets: Opportunity to support clients end-to-end across traditional and alternative asset classes.
- Consolidation and Outsourcing: Strength and connectivity of BNY’s platforms expected to be a differentiator for firms looking to outsource functions.
- Adoption of the Platform Model: Planned activation of largest wave of platform transitions, aiming for over half of the workforce by March.
- Digitization and AI: Emphasizing the use of AI to enhance efficiency and facilitate topline growth.
Q & A sessions,
Strategic Initiatives and Platform Operating Model
- The platform operating model is central to driving the company’s three strategic pillars: being more for clients, running the company better, and powering the culture.
- This model is expected to drive incremental topline growth, enhance resilience, and increase operational efficiency.
- Approximately 13,000 employees transitioned to this model in 2024, representing about one-quarter of the workforce.
- Key metrics of success include increased employee satisfaction, improved client delivery speed, and enhanced operational efficiency.
Financial Performance and Guidance
- Record net income of $4.3 billion and revenue of $18.6 billion were achieved in 2024.
- Return on tangible common equity was 23% for the year.
- Fee revenue increased by 6% year-over-year, while net interest income (NII) decreased by 1%.
- 2024 saw significant positive operating leverage: 968 basis points on a reported basis.
- 102% of 2024 earnings were returned to shareholders.
Market Position and Growth Opportunities
- BNY has a strong market position with $52 trillion of assets under custody and administration (AUCA) and $3 trillion of wealth assets.
- Emerging opportunities include digital asset exchange-traded products and services for ultra-high-net-worth individuals.
- Significant growth noted in treasury services, clearance, and collateral management, indicating gearing towards economic growth.
Risk Management and Market Outlook
- Potential risks include geopolitical tensions, policy uncertainties, and volatility in markets.
- A focus on operational resilience and a strong balance sheet positions BNY to navigate these uncertainties.
- Despite market risks, there’s optimism with pro-growth policies and signs of economic recovery.
Cultural Transformation and Talent Acquisition
- Celebrated the company’s 240th anniversary, emphasizing a culture of collaboration and innovation.
- Significant investments in employee experience have been recognized, enhancing talent acquisition efforts.
- BNY successfully attracted top talent, reflected in the largest intern and analyst class recruits.
| Key Metrics | 2024 |
|---|---|
| Net Income | $4.3 billion |
| Revenue | $18.6 billion |
| Return on Tangible Common Equity | 23% |
No bad stock 