NEW YORK, July 21, 2015 /PRNewswire/ --
TOTAL REVENUE INCREASED 4% YEAR-OVER-YEAR
- Increased 3% on an adjusted basis (a)
TOTAL EXPENSE DECREASED 7% YEAR-OVER-YEAR
- Decreased 1% on an adjusted basis (a)
GENERATED 460 BASIS POINTS OF POSITIVE OPERATING LEVERAGE
YEAR-OVER-YEAR ON AN ADJUSTED BASIS (a)
EXECUTING ON CAPITAL PLAN AND RETURN OF VALUE TO COMMON
SHAREHOLDERS
- Repurchased 19.4 million common shares for $834 million in the second quarter of
2015
- Return on tangible common equity of 22% in the second
quarter of 2015 (b)
The Bank of New York Mellon Corporation ("BNY Mellon") (NYSE:
BK) today reported second quarter net income applicable to common
shareholders of $830 million, or
$0.73 per diluted common share, or
$868 million, or $0.77 per diluted common share, adjusted for
litigation and restructuring charges. In the second quarter
of 2014, net income applicable to common shareholders was
$554 million, or $0.48 per diluted common share, or $715 million, or $0.62 per diluted common share, adjusted for the
charges related to investment management funds and severance.
In the first quarter of 2015, net income applicable to common
shareholders was $766 million, or
$0.67 per diluted common share.
(b)
"Our strong second quarter results demonstrated our execution of
our key priorities. We are growing our earnings, investing in
next-generation operating platforms and risk management controls,
attracting new clients and driving the long-term value of our firm
for the benefit of our clients and shareholders," Gerald L. Hassell, chairman and chief executive
officer of BNY Mellon, said.
"The investments we are making in strategic technology platforms
and applications are helping our solutions resonate with clients,
contributing to our ability to capture new business including a
significant middle-office contract to service more than
$770 billion in assets for a
prominent investment manager. Our costs will increase in the
short run as we onboard the new business; however, our platforms
are designed to be leveraged by a broader client base, creating
shared economies of scale that benefit our clients and drive
profitable growth for our shareholders," Mr. Hassell added.
"Finally, we returned more than $1
billion to our shareholders in the form of dividends and
share repurchases during the quarter while achieving a 22 percent
return on tangible common equity - further evidence of the strength
of our business model," Mr. Hassell concluded.
_________________________________________________________________________________
(a) See pages 3-4 for the Non-GAAP
adjustments.
(b) See "Supplemental information – Explanation
of GAAP and Non-GAAP financial measures" beginning on page 25 for
the reconciliation of these Non-GAAP measures.
CONFERENCE CALL INFORMATION
Gerald L. Hassell, chairman and
chief executive officer, and Thomas P.
Gibbons, vice chairman and chief financial officer, along
with other members of executive management from BNY Mellon, will
host a conference call and simultaneous live audio webcast at
8:00 a.m. EDT on July 21,
2015. This conference call and audio webcast will include
forward-looking statements and may include other material
information.
Persons wishing to access the conference call and audio webcast
may do so by dialing (888) 677-5383 (U.S.) and
(773) 799-3611 (International), and using the passcode:
Earnings, or by logging on to www.bnymellon.com. Earnings
materials will be available at www.bnymellon.com beginning at
approximately 6:30 a.m. EDT on
July 21, 2015. Replays of the conference call and audio
webcast will be available beginning July 21, 2015 at
approximately 2 p.m. EDT through
August 21, 2015 by dialing
(800) 391-9847 (U.S.) or (402) 220-3093
(International). The archived version of the conference call
and audio webcast will also be available at www.bnymellon.com for
the same time period.
SECOND QUARTER 2015 FINANCIAL HIGHLIGHTS
(a)
(comparisons are 2Q15 vs. 2Q14 unless otherwise stated)
|
Earnings per
share
|
|
|
Net income applicable
to
common shareholders of The
Bank of New York Mellon
Corporation
|
(in millions,
except per share amounts)
|
|
2Q14
|
|
2Q15
|
|
|
Inc
|
|
2Q14
|
2Q15
|
|
Inc
|
|
GAAP
results
|
$
|
0.48
|
|
|
$
|
0.73
|
|
|
|
|
|
$
|
554
|
$
|
830
|
|
|
|
Add: Litigation and
restructuring charges
|
|
0.06
|
|
|
0.03
|
|
|
|
76
|
|
38
|
|
|
Charge related to
investment management funds, net of incentives
|
|
0.07
|
|
|
N/A
|
|
|
|
85
|
|
N/A
|
|
|
Non-GAAP
results
|
$
|
0.62
|
|
(a)
|
$
|
0.77
|
|
(a)
|
24%
|
|
$
|
715
|
$
|
868
|
|
21%
|
|
(a) Does not foot
due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A - Not
applicable.
|
|
|
|
|
|
|
|
|
|
|
|
|
- Total revenue was $3.9 billion,
an increase of 4%.
- Investment services fees increased 4% reflecting organic
growth, primarily in Global Collateral Services and Asset
Servicing, higher clearing services revenue, net new business and
higher market values, partially offset by the unfavorable impact of
a stronger U.S. dollar.
- Investment management and performance fees decreased 1%, or
increased 5% on a constant currency basis (Non-GAAP), driven by
higher equity market values, the impact of the 1Q15 acquisition of
Cutwater Asset Management ("Cutwater") and strategic initiatives,
partially offset by lower performance fees. (a)
- Foreign exchange revenue increased 40% driven by higher volumes
and volatility, as well as higher Depositary Receipts-related
activity.
- Financing-related fees increased $14
million driven by higher fees related to secured intraday
credit provided to dealers in connection with their tri-party repo
activity.
- Investment and other income decreased $38 million driven by lower other revenue, equity
investment revenue and asset-related gains, partially offset by
higher leasing gains.
- Net interest revenue increased $60
million driven by higher securities and loans due to higher
deposits and the shift out of cash, lower interest expense incurred
on deposits and the impact of interest rate hedging
activities.
- The provision for credit losses was a credit of $6 million.
- Noninterest expense was $2.7
billion, a decrease of 7% reflecting lower expenses in all
categories, except incentives and business development
expense. The decrease primarily reflects the favorable impact
of a stronger U.S. dollar and the benefit of the business
improvement process which focuses on reducing structural
costs.
- Effective tax rate of 23.7%; rate is 1.4% lower due to the
income statement presentation of consolidated investment management
funds and a benefit related to the separately disclosed litigation
expense.
- Assets under custody and/or administration ("AUC/A") and
Assets under management ("AUM")
- AUC/A of $28.6 trillion,
increased slightly reflecting higher market values and organic
growth, partially offset by the unfavorable impact of a stronger
U.S. dollar.
- Estimated new AUC/A wins in Asset Servicing of $1.02 trillion in 2Q15.
- AUM of $1.72 trillion, increased
5% driven by higher market values, net new business and the
Cutwater acquisition, partially offset by the unfavorable impact of
a stronger U.S. dollar.
- Net long-term outflows totaled $15
billion in 2Q15 driven by equity, index and fixed income
investments, partially offset by liability-driven and alternative
investments.
- Net short-term outflows totaled $11
billion in 2Q15.
- Capital
- Repurchased 19.4 million common shares for $834 million in 2Q15.
- Return on tangible common equity of 22% in 2Q15
(a).
_________________________________________________________________________________
(a) See "Supplemental information – Explanation of GAAP
and Non-GAAP financial measures" beginning on page 25 for the
reconciliation of Non-GAAP measures. Non-GAAP excludes the
gains on the sales of our investment in Wing Hang Bank and the One
Wall Street building, net income attributable to noncontrolling
interests of consolidated investment management funds, amortization
of intangible assets, M&I, litigation and restructuring
charges, a charge related to investment management funds, net of
incentives, and the benefit primarily related to a tax carryback
claim, if
applicable.
Note: In the table above and throughout this document,
sequential growth rates are unannualized.
FINANCIAL SUMMARY
(dollars in
millions, except per share amounts; common shares in
thousands)
|
|
|
|
|
|
2Q15
vs.
|
2Q14
|
3Q14
|
4Q14
|
1Q15
|
2Q15
|
2Q14
|
1Q15
|
Revenue:
|
|
|
|
|
|
|
|
Fee and other revenue
(a)
|
$
|
2,980
|
|
$
|
3,851
|
|
$
|
2,935
|
|
$
|
3,012
|
|
$
|
3,067
|
|
3
|
%
|
2
|
%
|
Income from
consolidated investment management funds (a)
|
46
|
|
39
|
|
42
|
|
52
|
|
40
|
|
|
|
Net interest
revenue
|
719
|
|
721
|
|
712
|
|
728
|
|
779
|
|
8
|
|
7
|
|
Total revenue – GAAP
(a)
|
3,745
|
|
4,611
|
|
3,689
|
|
3,792
|
|
3,886
|
|
4
|
|
2
|
|
Less: Net
income attributable to noncontrolling interests related to
consolidated investment management funds (a)
|
17
|
|
23
|
|
24
|
|
31
|
|
37
|
|
|
|
Gain on the sale of our
investment in Wing Hang
|
—
|
|
490
|
|
—
|
|
—
|
|
—
|
|
|
|
Gain on the sale of
the One Wall Street building
|
—
|
|
346
|
|
—
|
|
—
|
|
—
|
|
|
|
Total revenue –
Non-GAAP (a)
|
3,728
|
|
3,752
|
|
3,665
|
|
3,761
|
|
3,849
|
|
3
|
|
2
|
|
Provision for
credit losses
|
(12)
|
|
(19)
|
|
1
|
|
2
|
|
(6)
|
|
|
|
Expense:
|
|
|
|
|
|
|
|
Noninterest expense –
GAAP
|
2,946
|
|
2,968
|
|
3,524
|
|
2,700
|
|
2,727
|
|
(7)
|
|
1
|
|
Less:
Amortization of intangible assets
|
75
|
|
75
|
|
73
|
|
66
|
|
65
|
|
|
|
M&I, litigation
and restructuring charges
|
122
|
|
220
|
|
800
|
|
(3)
|
|
59
|
|
|
|
Charge related to
investment management funds, net of incentives
|
109
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
Total noninterest
expense – Non-GAAP
|
2,640
|
|
2,673
|
|
2,651
|
|
2,637
|
|
2,603
|
|
(1)
|
|
(1)
|
|
Income:
|
|
|
|
|
|
|
|
Income before income
taxes (a)
|
811
|
|
1,662
|
|
164
|
|
1,090
|
|
1,165
|
|
44
|
%
|
7
|
%
|
Provision (benefit)
for income taxes
|
217
|
|
556
|
|
(93)
|
|
280
|
|
276
|
|
|
|
Net income
(a)
|
$
|
594
|
|
$
|
1,106
|
|
$
|
257
|
|
$
|
810
|
|
$
|
889
|
|
|
|
Net (income)
attributable to noncontrolling interests (a)(b)
|
(17)
|
|
(23)
|
|
(24)
|
|
(31)
|
|
(36)
|
|
|
|
Net income applicable
to shareholders of The Bank of New York Mellon
Corporation
|
577
|
|
1,083
|
|
233
|
|
779
|
|
853
|
|
|
|
Preferred stock
dividends
|
(23)
|
|
(13)
|
|
(24)
|
|
(13)
|
|
(23)
|
|
|
|
Net income applicable
to common shareholders of The Bank of New York Mellon
Corporation
|
$
|
554
|
|
$
|
1,070
|
|
$
|
209
|
|
$
|
766
|
|
$
|
830
|
|
|
|
|
|
|
|
|
|
|
|
Key
Metrics:
|
|
|
|
|
|
|
|
Pre-tax operating
margin (a)(c)
|
22
|
%
|
36
|
%
|
4
|
%
|
29
|
%
|
30
|
%
|
|
|
Non-GAAP
(c)
|
30
|
%
|
29
|
%
|
28
|
%
|
30
|
%
|
33
|
%
|
|
|
|
|
|
|
|
|
|
|
Return on common
equity (annualized) (c)
|
6.1
|
%
|
11.6
|
%
|
2.2
|
%
|
8.8
|
%
|
9.4
|
%
|
|
|
Non-GAAP
(c)
|
8.4
|
%
|
8.5
|
%
|
7.7
|
%
|
9.2
|
%
|
10.3
|
%
|
|
|
|
|
|
|
|
|
|
|
Return on tangible
common equity (annualized) – Non-GAAP (c)
|
14.5
|
%
|
26.2
|
%
|
5.9
|
%
|
20.3
|
%
|
21.5
|
%
|
|
|
Non-GAAP adjusted
(c)
|
18.4
|
%
|
18.4
|
%
|
16.3
|
%
|
20.2
|
%
|
22.5
|
%
|
|
|
|
|
|
|
|
|
|
|
Fee revenue as a
percentage of total revenue excluding net securities gains
(a)
|
79
|
%
|
83
|
%
|
79
|
%
|
79
|
%
|
79
|
%
|
|
|
|
|
|
|
|
|
|
|
Percentage of
non-U.S. total revenue (d)
|
38
|
%
|
43
|
%
|
35
|
%
|
36
|
%
|
36
|
%
|
|
|
|
|
|
|
|
|
|
|
Average common shares
and equivalents outstanding:
|
|
|
|
|
|
|
|
Basic
|
1,133,556
|
|
1,126,946
|
|
1,120,672
|
|
1,118,602
|
|
1,113,790
|
|
|
|
Diluted
|
1,139,800
|
|
1,134,871
|
|
1,129,040
|
|
1,126,306
|
|
1,122,135
|
|
|
|
|
|
|
|
|
|
|
|
Period
end:
|
|
|
|
|
|
|
|
Full-time
employees
|
51,100
|
|
50,900
|
|
50,300
|
|
50,500
|
|
50,700
|
|
|
|
Book value per common
share – GAAP (c)
|
$
|
32.49
|
|
$
|
32.77
|
|
$
|
32.09
|
|
$
|
31.89
|
|
$
|
32.28
|
|
|
|
Tangible book value
per common share – Non-GAAP (c)
|
$
|
14.88
|
|
$
|
15.30
|
|
$
|
14.70
|
|
$
|
14.82
|
|
$
|
14.86
|
|
|
|
Cash dividends per
common share
|
$
|
0.17
|
|
$
|
0.17
|
|
$
|
0.17
|
|
$
|
0.17
|
|
$
|
0.17
|
|
|
|
Common dividend
payout ratio
|
35
|
%
|
18
|
%
|
94
|
%
|
25
|
%
|
23
|
%
|
|
|
Closing stock price
per common share
|
$
|
37.48
|
|
$
|
38.73
|
|
$
|
40.57
|
|
$
|
40.24
|
|
$
|
41.97
|
|
|
|
Market
capitalization
|
$
|
42,412
|
|
$
|
43,599
|
|
$
|
45,366
|
|
$
|
45,130
|
|
$
|
46,441
|
|
|
|
Common shares
outstanding
|
1,131,596
|
|
1,125,710
|
|
1,118,228
|
|
1,121,512
|
|
1,106,518
|
|
|
|
(a) The first quarter of 2015 was restated to
reflect the retrospective application of adopting new accounting
guidance related to Consolidations (ASU 2015-02). See page 24
for additional information.
(b) Primarily attributable to noncontrolling
interests related to consolidated investment management
funds.
(c) Non-GAAP excludes the gains on the
sales of our investment in Wing Hang Bank and the One Wall Street
building, net income attributable to noncontrolling interests of
consolidated investment management funds, amortization of
intangible assets, M&I, litigation and restructuring charges,
and a charge related to investment management funds, net of
incentives. See "Supplemental information – Explanation of
GAAP and Non-GAAP financial measures" beginning on page 25 for the
reconciliation of Non-GAAP measures.
(d) Includes fee revenue, net interest revenue
and income from consolidated investment management funds, net of
net income attributable to noncontrolling interests.
CONSOLIDATED BUSINESS METRICS
Consolidated
business metrics
|
|
|
|
|
|
|
2Q15
vs.
|
|
2Q14
|
3Q14
|
4Q14
|
1Q15
|
2Q15
|
|
2Q14
|
1Q15
|
Changes in AUM
(in billions): (a)
|
|
|
|
|
|
|
|
|
Beginning balance of
AUM
|
$
|
1,620
|
|
$
|
1,636
|
|
$
|
1,646
|
|
$
|
1,710
|
|
$
|
1,741
|
|
|
|
|
Net inflows
(outflows):
|
|
|
|
|
|
|
|
|
Long-term:
|
|
|
|
|
|
|
|
|
Equity
|
(4)
|
|
(2)
|
|
(4)
|
|
(6)
|
|
(12)
|
|
|
|
|
Fixed
income
|
(1)
|
|
—
|
|
4
|
|
4
|
|
(2)
|
|
|
|
|
Index
|
7
|
|
(3)
|
|
1
|
|
8
|
|
(9)
|
|
|
|
|
Liability-driven
investments (b)
|
(17)
|
|
18
|
|
24
|
|
8
|
|
5
|
|
|
|
|
Alternative
investments
|
2
|
|
—
|
|
2
|
|
2
|
|
3
|
|
|
|
|
Total long-term
inflows (outflows)
|
(13)
|
|
13
|
|
27
|
|
16
|
|
(15)
|
|
|
|
|
Short
term:
|
|
|
|
|
|
|
|
|
Cash
|
(18)
|
|
19
|
|
5
|
|
1
|
|
(11)
|
|
|
|
|
Total net inflows
(outflows)
|
(31)
|
|
32
|
|
32
|
|
17
|
|
(26)
|
|
|
|
|
Net market/currency
impact/acquisition
|
47
|
|
(22)
|
|
32
|
|
14
|
|
9
|
|
|
|
|
Ending balance of
AUM
|
$
|
1,636
|
|
$
|
1,646
|
|
$
|
1,710
|
|
$
|
1,741
|
|
$
|
1,724
|
|
(c)
|
5
|
%
|
(1)
|
%
|
|
|
|
|
|
|
|
|
|
AUM at period end,
by product type: (a)
|
|
|
|
|
|
|
|
|
Equity
|
17
|
%
|
16
|
%
|
16
|
%
|
15
|
%
|
15
|
%
|
|
|
|
Fixed
income
|
14
|
|
13
|
|
13
|
|
13
|
|
13
|
|
|
|
|
Index
|
21
|
|
21
|
|
21
|
|
22
|
|
21
|
|
|
|
|
Liability-driven
investments (b)
|
27
|
|
28
|
|
29
|
|
29
|
|
30
|
|
|
|
|
Alternative
investments
|
4
|
|
4
|
|
4
|
|
4
|
|
4
|
|
|
|
|
Cash
|
17
|
|
18
|
|
17
|
|
17
|
|
17
|
|
|
|
|
Total AUM
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
(c)
|
|
|
|
|
|
|
|
|
|
|
|
Investment
Management:
|
|
|
|
|
|
|
|
|
Average loans (in
millions)
|
$
|
10,372
|
|
$
|
10,772
|
|
$
|
11,124
|
|
$
|
11,634
|
|
$
|
12,298
|
|
|
19
|
%
|
6
|
%
|
Average deposits
(in millions)
|
$
|
13,458
|
|
$
|
13,764
|
|
$
|
14,604
|
|
$
|
15,218
|
|
$
|
14,640
|
|
|
9
|
%
|
(4)
|
%
|
|
|
|
|
|
|
|
|
|
Investment
Services:
|
|
|
|
|
|
|
|
|
Average loans (in
millions)
|
$
|
33,115
|
|
$
|
33,785
|
|
$
|
35,448
|
|
$
|
37,699
|
|
$
|
38,264
|
|
|
16
|
%
|
1
|
%
|
Average deposits
(in millions)
|
$
|
220,701
|
|
$
|
221,734
|
|
$
|
228,282
|
|
$
|
234,183
|
|
$
|
237,193
|
|
|
7
|
%
|
1
|
%
|
|
|
|
|
|
|
|
|
|
AUC/A at period end
(in trillions) (d)
|
$
|
28.5
|
|
$
|
28.3
|
|
$
|
28.5
|
|
$
|
28.5
|
|
$
|
28.6
|
|
(c)
|
—
|
%
|
—
|
%
|
|
|
|
|
|
|
|
|
|
Market value of
securities on loan at period end (in billions)
(e)
|
$
|
280
|
|
$
|
282
|
|
$
|
289
|
|
$
|
291
|
|
$
|
283
|
|
|
1
|
%
|
(3)
|
%
|
|
|
|
|
|
|
|
|
|
Asset
servicing:
|
|
|
|
|
|
|
|
|
Estimated new
business wins (AUC/A) (in billions)
|
$
|
130
|
|
$
|
115
|
|
$
|
130
|
|
$
|
131
|
|
$
|
1,024
|
|
(c)
|
|
|
|
|
|
|
|
|
|
|
|
Depositary
Receipts:
|
|
|
|
|
|
|
|
|
Number of sponsored
programs
|
1,316
|
|
1,302
|
|
1,279
|
|
1,258
|
|
1,206
|
|
|
(8)%
|
|
(4)
|
%
|
|
|
|
|
|
|
|
|
|
Clearing
services:
|
|
|
|
|
|
|
|
|
Global DARTS volume
(in thousands)
|
207
|
|
209
|
|
242
|
|
261
|
|
242
|
|
|
17
|
%
|
(7)
|
%
|
Average active
clearing accounts (U.S. platform) (in thousands)
|
5,752
|
|
5,805
|
|
5,900
|
|
5,979
|
|
6,046
|
|
|
5
|
%
|
1
|
%
|
Average long-term
mutual fund assets (U.S. platform) (in millions)
|
$
|
433,047
|
|
$
|
442,827
|
|
$
|
450,305
|
|
$
|
456,954
|
|
$
|
466,195
|
|
|
8
|
%
|
2
|
%
|
Average investor
margin loans (U.S. platform) (in millions)
|
$
|
9,236
|
|
$
|
9,861
|
|
$
|
10,711
|
|
$
|
11,232
|
|
$
|
11,890
|
|
|
29
|
%
|
6
|
%
|
|
|
|
|
|
|
|
|
|
Broker-Dealer:
|
|
|
|
|
|
|
|
|
Average tri-party
repo balances (in billions)
|
$
|
2,022
|
|
$
|
2,063
|
|
$
|
2,101
|
|
$
|
2,153
|
|
$
|
2,174
|
|
|
8
|
%
|
1
|
%
|
(a) Excludes securities lending cash management
assets and assets managed in the Investment Services
business.
(b) Includes currency overlay assets under
management.
(c) Preliminary.
(d) Includes the AUC/A of CIBC Mellon Global
Securities Services Company ("CIBC Mellon"), a joint venture with
the Canadian Imperial Bank of Commerce, of $1.2 trillion at June 30,
2014 and Sept. 30, 2014 and
$1.1 trillion at Dec. 31, 2014, March 31,
2015 and June 30,
2015.
(e) Represents the total amount of
securities on loan managed by the Investment Services
business. Excludes securities for which BNY Mellon acts as
agent on behalf of CIBC Mellon clients, which totaled $64 billion at June 30,
2014, $65 billion at
Sept. 30, 2014 and Dec. 31, 2014, $69
billion at March 31, 2015 and
$68 billion at June 30, 2015.
The following table presents key market metrics at period end
and on an average basis.
Key market
metrics
|
|
|
|
|
|
2Q15
vs.
|
|
2Q14
|
3Q14
|
4Q14
|
1Q15
|
2Q15
|
2Q14
|
1Q15
|
S&P 500 Index
(a)
|
1960
|
|
1972
|
|
2059
|
|
2068
|
|
2063
|
|
5
|
%
|
—
|
%
|
S&P 500 Index –
daily average
|
1900
|
|
1976
|
|
2009
|
|
2064
|
|
2102
|
|
11
|
|
2
|
|
FTSE 100 Index
(a)
|
6744
|
|
6623
|
|
6566
|
|
6773
|
|
6521
|
|
(3)
|
|
(4)
|
|
FTSE 100 Index –
daily average
|
6764
|
|
6756
|
|
6526
|
|
6793
|
|
6920
|
|
2
|
|
2
|
|
MSCI World Index
(a)
|
1743
|
|
1698
|
|
1710
|
|
1741
|
|
1736
|
|
—
|
|
—
|
|
MSCI World Index –
daily average
|
1698
|
|
1733
|
|
1695
|
|
1726
|
|
1780
|
|
5
|
|
3
|
|
Barclays Capital
Global Aggregate BondSM Index (a)(b)
|
376
|
|
361
|
|
357
|
|
348
|
|
342
|
|
(9)
|
|
(2)
|
|
NYSE and NASDAQ share
volume (in billions)
|
187
|
|
173
|
|
198
|
|
187
|
|
185
|
|
(1)
|
|
(1)
|
|
JPMorgan G7
Volatility Index – daily average (c)
|
6.22
|
|
6.21
|
|
8.54
|
|
10.40
|
|
10.06
|
|
62
|
|
(3)
|
|
Average Fed Funds
effective rate
|
0.09
|
%
|
0.09
|
%
|
0.10
|
%
|
0.11
|
%
|
0.13
|
%
|
4
|
bps
|
2
|
bps
|
Foreign exchange
rates vs. U.S. dollar:
|
|
|
|
|
|
|
|
British pound -
average rate
|
$
|
1.68
|
|
$
|
1.67
|
|
$
|
1.58
|
|
$
|
1.51
|
|
$
|
1.53
|
|
(9)%
|
|
1
|
%
|
Euro - average
rate
|
1.37
|
|
1.33
|
|
1.25
|
|
1.13
|
|
1.11
|
|
(19)
|
|
(2)
|
|
(a) Period end.
(b) Unhedged in U.S. dollar
terms.
(c) The JPMorgan G7
Volatility Index is based on the implied volatility in 3-month
currency options.
bps – basis points.
FEE AND OTHER REVENUE
Fee and other
revenue
|
|
|
|
|
|
2Q15
vs.
|
(dollars in
millions)
|
2Q14
|
3Q14
|
4Q14
|
1Q15
|
2Q15
|
2Q14
|
1Q15
|
Investment services
fees:
|
|
|
|
|
|
|
|
Asset servicing
(a)
|
$
|
1,022
|
|
$
|
1,025
|
|
$
|
1,019
|
|
$
|
1,038
|
|
$
|
1,060
|
|
4
|
%
|
2
|
%
|
Clearing
services
|
326
|
|
337
|
|
347
|
|
344
|
|
347
|
|
6
|
|
1
|
|
Issuer
services
|
231
|
|
315
|
|
193
|
|
232
|
|
234
|
|
1
|
|
1
|
|
Treasury
services
|
141
|
|
142
|
|
145
|
|
137
|
|
144
|
|
2
|
|
5
|
|
Total investment
services fees
|
1,720
|
|
1,819
|
|
1,704
|
|
1,751
|
|
1,785
|
|
4
|
|
2
|
|
Investment management
and performance fees (b)
|
883
|
|
881
|
|
885
|
|
867
|
|
878
|
|
(1)
|
|
1
|
|
Foreign exchange and
other trading revenue
|
130
|
|
153
|
|
151
|
|
229
|
|
187
|
|
44
|
|
(18)
|
|
Financing-related
fees
|
44
|
|
44
|
|
43
|
|
40
|
|
58
|
|
32
|
|
45
|
|
Distribution and
servicing
|
43
|
|
44
|
|
43
|
|
41
|
|
39
|
|
(9)
|
|
(5)
|
|
Investment and other
income (b)
|
142
|
|
890
|
|
78
|
|
60
|
|
104
|
|
N/M
|
N/M
|
Total fee revenue
(b)
|
2,962
|
|
3,831
|
|
2,904
|
|
2,988
|
|
3,051
|
|
3
|
|
2
|
|
Net securities
gains
|
18
|
|
20
|
|
31
|
|
24
|
|
16
|
|
N/M
|
N/M
|
Total fee and other
revenue (b)
|
$
|
2,980
|
|
$
|
3,851
|
|
$
|
2,935
|
|
$
|
3,012
|
|
$
|
3,067
|
|
3
|
%
|
2
|
%
|
(a) Asset servicing fees include securities
lending revenue of $46 million in
2Q14, $37 million in 3Q14 and 4Q14,
$43 million in 1Q15 and $49 million in 2Q15.
(b) The first quarter of 2015 was restated to
reflect the retrospective application of adopting new accounting
guidance related to Consolidations (ASU 2015-02). See page 24
for additional information.
N/M - Not meaningful.
KEY POINTS
- Asset servicing fees were $1.1
billion, an increase of 4% year-over-year and 2%
sequentially. The year-over-year increase primarily reflects
organic growth, due in part to Global Collateral Services, net new
business and higher market values, partially offset by the
unfavorable impact of a stronger U.S. dollar. The sequential
increase primarily reflects organic growth and seasonally higher
securities lending revenue.
- Clearing services fees were $347
million, an increase of 6% year-over-year and 1%
sequentially. The year-over-year increase was primarily
driven by higher mutual fund and asset-based fees, clearance
revenue and custody fees. The sequential increase was
primarily driven by two additional trading days in 2Q15.
- Issuer services fees were $234
million, an increase of 1% year-over-year and
sequentially. Both increases primarily reflect higher
Depositary Receipts revenue, partially offset by lower Corporate
Trust fees. The year-over-year decrease in Corporate Trust
fees primarily reflects the unfavorable impact of a stronger U.S.
dollar.
- Treasury services fees were $144
million, an increase of 2% year-over-year and 5%
sequentially. The year-over-year increase primarily reflects
higher payment volumes. The sequential increase primarily
reflects three additional business days in 2Q15.
- Investment management and performance fees were $878 million, a decrease of 1% year-over-year, or
an increase of 5% on a constant currency basis (Non-GAAP).
The increase was driven by higher equity market values, the impact
of the 1Q15 acquisition of Cutwater and strategic initiatives,
partially offset by lower performance fees. Sequentially,
investment management and performance fees increased 1% primarily
reflecting higher equity market values and higher performance
fees.
•
|
Foreign exchange
and other trading revenue
|
|
|
|
|
|
|
(in
millions)
|
2Q14
|
3Q14
|
4Q14
|
1Q15
|
2Q15
|
|
Foreign
exchange
|
$
|
129
|
|
$
|
154
|
|
$
|
165
|
|
$
|
217
|
|
$
|
181
|
|
|
Other trading revenue
(loss):
|
|
|
|
|
|
|
Fixed
income
|
(1)
|
|
2
|
|
(18)
|
|
11
|
|
—
|
|
|
Equity/other
|
2
|
|
(3)
|
|
4
|
|
1
|
|
6
|
|
|
Total other trading
revenue (loss)
|
1
|
|
(1)
|
|
(14)
|
|
12
|
|
6
|
|
|
Total foreign
exchange and other trading revenue
|
$
|
130
|
|
$
|
153
|
|
$
|
151
|
|
$
|
229
|
|
$
|
187
|
|
Foreign exchange and other trading revenue totaled $187 million in 2Q15 compared with $130 million in 2Q14 and $229 million in 1Q15. In 2Q15, foreign
exchange revenue totaled $181
million, an increase of 40% year-over-year and a decrease of
17% sequentially. The year-over-year increase primarily
reflects higher volatility and volumes, as well as higher
Depositary Receipts-related activity. The sequential decrease
primarily reflects the benefit of unusually high volatility in
1Q15.
- Financing-related fees were $58
million in 2Q15 compared with $44
million in 2Q14 and $40
million in 1Q15. Both increases primarily reflect
higher fees related to secured intraday credit provided to dealers
in connection with their tri-party repo activity.
•
|
Investment and
other income (loss)
|
|
|
|
|
|
|
(in
millions)
|
2Q14
|
3Q14
|
4Q14
|
1Q15
|
2Q15
|
|
Lease residual gains
(losses)
|
$
|
4
|
|
$
|
5
|
|
$
|
5
|
|
$
|
(1)
|
|
$
|
54
|
|
|
Corporate/bank-owned
life insurance
|
30
|
|
34
|
|
37
|
|
33
|
|
31
|
|
|
Expense
reimbursements from joint venture
|
15
|
|
13
|
|
15
|
|
14
|
|
17
|
|
|
Private equity gains
(losses)
|
(2)
|
|
2
|
|
1
|
|
(3)
|
|
3
|
|
|
Seed capital gains
(losses) (a)
|
15
|
|
(1)
|
|
—
|
|
16
|
|
2
|
|
|
Asset-related
gains
|
17
|
|
836
|
|
20
|
|
3
|
|
1
|
|
|
Equity investment
revenue (loss)
|
17
|
|
(9)
|
|
(5)
|
|
(4)
|
|
(7)
|
|
|
Other income
(a)
|
46
|
|
10
|
|
5
|
|
2
|
|
3
|
|
|
Total investment and
other income
|
$
|
142
|
|
$
|
890
|
|
$
|
78
|
|
$
|
60
|
|
$
|
104
|
|
(a) The first quarter of 2015 was restated to
reflect the retrospective application of adopting new accounting
guidance related to Consolidations (ASU 2015-02). See page 24
for additional information.
Investment and other income was $104
million in 2Q15 compared with $142
million in 2Q14 and $60
million in 1Q15. The year-over-year decrease primarily
reflects lower other revenue, equity investment revenue and
asset-related gains, partially offset by higher lease residual
gains. The sequential increase primarily reflects higher
lease residual gains, partially offset by lower seed capital
gains.
NET INTEREST REVENUE
Net interest
revenue
|
|
|
|
|
|
2Q15
vs.
|
(dollars in
millions)
|
2Q14
|
3Q14
|
4Q14
|
1Q15
|
2Q15
|
2Q14
|
1Q15
|
Net interest revenue
(non-FTE)
|
$
|
719
|
|
$
|
721
|
|
$
|
712
|
|
$
|
728
|
|
$
|
779
|
|
8
|
%
|
7
|
%
|
Net interest revenue
(FTE) – Non-GAAP
|
736
|
|
736
|
|
726
|
|
743
|
|
794
|
|
8
|
|
7
|
|
Net interest margin
(FTE)
|
0.98
|
%
|
0.94
|
%
|
0.91
|
%
|
0.97
|
%
|
1.00
|
%
|
2
|
bps
|
3
|
bps
|
|
|
|
|
|
|
|
|
Selected average
balances:
|
|
|
|
|
|
|
|
Cash/interbank
investments
|
$
|
140,357
|
|
$
|
139,278
|
|
$
|
140,599
|
|
$
|
123,647
|
|
$
|
125,640
|
|
(10)%
|
|
2
|
%
|
Trading account
securities
|
5,532
|
|
5,435
|
|
3,922
|
|
3,046
|
|
3,253
|
|
(41)
|
|
7
|
|
Securities
|
101,420
|
|
112,055
|
|
117,243
|
|
123,476
|
|
128,641
|
|
27
|
|
4
|
|
Loans
|
53,449
|
|
54,835
|
|
56,844
|
|
57,935
|
|
61,076
|
|
14
|
|
5
|
|
Interest-earning
assets
|
300,758
|
|
311,603
|
|
318,608
|
|
308,104
|
|
318,610
|
|
6
|
|
3
|
|
Interest-bearing
deposits
|
162,674
|
|
164,233
|
|
163,149
|
|
159,520
|
|
170,730
|
|
5
|
|
7
|
|
Noninterest-bearing
deposits
|
77,820
|
|
82,334
|
|
85,330
|
|
89,592
|
|
84,890
|
|
9
|
|
(5)
|
|
|
|
|
|
|
|
|
|
Selected average
yields/rates:
|
|
|
|
|
|
|
|
Cash/interbank
investments
|
0.43
|
%
|
0.38
|
%
|
0.31
|
%
|
0.35
|
%
|
0.34
|
%
|
|
|
Trading account
securities
|
2.19
|
|
2.36
|
|
2.64
|
|
2.46
|
|
2.63
|
|
|
|
Securities
|
1.68
|
|
1.56
|
|
1.54
|
|
1.55
|
|
1.57
|
|
|
|
Loans
|
1.66
|
|
1.61
|
|
1.58
|
|
1.55
|
|
1.51
|
|
|
|
Interest-earning
assets
|
1.10
|
|
1.05
|
|
1.02
|
|
1.07
|
|
1.08
|
|
|
|
Interest-bearing
deposits
|
0.06
|
|
0.06
|
|
0.03
|
|
0.04
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
Average
cash/interbank investments as a percentage of average
interest-earning assets
|
47
|
%
|
45
|
%
|
44
|
%
|
40
|
%
|
39
|
%
|
|
|
Average
noninterest-bearing deposits as a percentage of average
interest-earning assets
|
26
|
%
|
26
|
%
|
27
|
%
|
29
|
%
|
27
|
%
|
|
|
FTE – fully taxable equivalent.
bps – basis points.
KEY POINTS
- Net interest revenue totaled $779
million in 2Q15, an increase of $60
million compared with 2Q14 and an increase of $51 million sequentially. Both increases
primarily reflect higher securities and loans due to higher
deposits, lower interest expense incurred on deposits, and the
impact of interest rate hedging activities. The
year-over-year increase also reflects the shift out of cash and
into investments in securities and loans, which was partially
offset by lower yields on interest-earning assets.
NONINTEREST EXPENSE
Noninterest
expense
|
|
|
|
|
|
2Q15
vs.
|
(dollars in
millions)
|
2Q14
|
3Q14
|
4Q14
|
1Q15
|
2Q15
|
2Q14
|
1Q15
|
Staff:
|
|
|
|
|
|
|
|
Compensation
|
$
|
903
|
|
$
|
909
|
|
$
|
893
|
|
$
|
871
|
|
$
|
877
|
|
(3)
|
%
|
1
|
%
|
Incentives
|
313
|
|
340
|
|
319
|
|
425
|
|
349
|
|
12
|
|
(18)
|
|
Employee
benefits
|
223
|
|
228
|
|
206
|
|
189
|
|
208
|
|
(7)
|
|
10
|
|
Total
staff
|
1,439
|
|
1,477
|
|
1,418
|
|
1,485
|
|
1,434
|
|
—
|
|
(3)
|
|
Professional, legal
and other purchased services
|
314
|
|
323
|
|
390
|
|
302
|
|
299
|
|
(5)
|
|
(1)
|
|
Software and
equipment
|
236
|
|
234
|
|
235
|
|
228
|
|
228
|
|
(3)
|
|
—
|
|
Net
occupancy
|
152
|
|
154
|
|
150
|
|
151
|
|
149
|
|
(2)
|
|
(1)
|
|
Distribution and
servicing
|
112
|
|
107
|
|
102
|
|
98
|
|
96
|
|
(14)
|
|
(2)
|
|
Sub-custodian
|
81
|
|
67
|
|
70
|
|
70
|
|
75
|
|
(7)
|
|
7
|
|
Business
development
|
68
|
|
61
|
|
75
|
|
61
|
|
72
|
|
6
|
|
18
|
|
Other
|
347
|
|
250
|
|
211
|
|
242
|
|
250
|
|
(28)
|
|
3
|
|
Amortization of
intangible assets
|
75
|
|
75
|
|
73
|
|
66
|
|
65
|
|
(13)
|
|
(2)
|
|
M&I, litigation
and restructuring charges
|
122
|
|
220
|
|
800
|
|
(3)
|
|
59
|
|
N/M
|
N/M
|
Total noninterest
expense – GAAP
|
$
|
2,946
|
|
$
|
2,968
|
|
$
|
3,524
|
|
$
|
2,700
|
|
$
|
2,727
|
|
(7)
|
%
|
1
|
%
|
|
|
|
|
|
|
|
|
Total staff expense
as a percentage of total revenue
|
38
|
%
|
32
|
%
|
38
|
%
|
39
|
%
|
37
|
%
|
|
|
|
|
|
|
|
|
|
|
Memo:
|
|
|
|
|
|
|
|
Total noninterest
expense excluding amortization of
intangible assets, M&I, litigation and restructuring
charges
and the charge related to investment management funds,
net of incentives – Non-GAAP
|
$
|
2,640
|
|
$
|
2,673
|
|
$
|
2,651
|
|
$
|
2,637
|
|
$
|
2,603
|
|
(1)%
|
|
(1)%
|
|
N/M - Not meaningful.
KEY POINTS
- Total noninterest expense excluding amortization of intangible
assets, M&I, litigation and restructuring charges, and the
charge related to investment management funds, net of incentives
(Non-GAAP) decreased 1% year-over-year and
sequentially.
- The year-over-year decrease reflects lower expenses in all
categories, except incentives and business development
expense. The lower expenses primarily reflect the favorable
impact of a stronger U.S. dollar and the benefit of the business
improvement process which focuses on reducing structural
costs.
- Total staff expense decreased slightly year-over-year primarily
reflecting the favorable impact of a stronger U.S. dollar, lower
headcount and the impact of curtailing the U.S. pension plan,
partially offset by higher incentive expense reflecting better
performance.
- The sequential decrease primarily reflects lower incentive
expense driven by the impact of vesting of long-term stock awards
for retirement eligible employees recorded in 1Q15. The
decrease was partially offset by higher employee benefits expense
reflecting the curtailment gain recorded in 1Q15 and higher
business development expenses.
INVESTMENT SECURITIES PORTFOLIO
At June 30, 2015, the fair value
of our investment securities portfolio totaled $123.0 billion. The net unrealized pre-tax
gain on our total securities portfolio was $752 million at June 30,
2015 compared with $1.7
billion at March 31, 2015. The decrease in the
net unrealized pre-tax gain was primarily driven by higher market
interest rates. At June 30,
2015, the fair value of the held-to-maturity securities
totaled $43.4 billion and represented
35% of the fair value of the total investment securities
portfolio.
The following table shows the distribution of our investment
securities portfolio.
Investment
securities portfolio
|
March 31,
2015
|
|
|
2Q15
change in
unrealized
gain
(loss)
|
|
June 30,
2015
|
|
|
Fair value
as a % of
amortized
cost (a)
|
|
Unrealized
gain
(loss)
|
|
|
Ratings
|
|
|
|
|
BB+
and
lower
|
|
(dollars in
millions)
|
Fair
value
|
|
|
Amortized
cost
|
|
Fair
value
|
|
|
|
AAA/
AA-
|
A+/
A-
|
BBB+/
BBB-
|
Not
rated
|
Agency
RMBS
|
$
|
51,101
|
|
|
$
|
(431)
|
|
$
|
49,983
|
|
$
|
50,018
|
|
|
100
|
%
|
$
|
35
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
U.S.
Treasury
|
28,680
|
|
|
(183)
|
|
24,139
|
|
24,222
|
|
|
100
|
|
83
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Sovereign
debt/sovereign guaranteed
|
18,469
|
|
|
(142)
|
|
18,466
|
|
18,516
|
|
|
100
|
|
50
|
|
|
77
|
|
1
|
|
22
|
|
—
|
|
—
|
|
Non-agency RMBS
(b)
|
2,138
|
|
|
(25)
|
|
1,626
|
|
2,040
|
|
|
81
|
|
414
|
|
|
—
|
|
1
|
|
2
|
|
90
|
|
7
|
|
Non-agency
RMBS
|
1,070
|
|
|
(1)
|
|
1,007
|
|
1,024
|
|
|
94
|
|
17
|
|
|
2
|
|
9
|
|
19
|
|
69
|
|
1
|
|
European floating rate notes
|
1,723
|
|
|
(6)
|
|
1,748
|
|
1,737
|
|
|
99
|
|
(11)
|
|
|
71
|
|
22
|
|
—
|
|
7
|
|
—
|
|
Commercial
MBS
|
5,901
|
|
|
(49)
|
|
5,866
|
|
5,888
|
|
|
100
|
|
22
|
|
|
94
|
|
5
|
|
1
|
|
—
|
|
—
|
|
State and political
subdivisions
|
5,159
|
|
|
(29)
|
|
4,492
|
|
4,548
|
|
|
101
|
|
56
|
|
|
77
|
|
22
|
|
—
|
|
—
|
|
1
|
|
Foreign covered
bonds
|
2,804
|
|
|
(15)
|
|
2,666
|
|
2,723
|
|
|
102
|
|
57
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Corporate
bonds
|
1,745
|
|
|
(32)
|
|
1,784
|
|
1,802
|
|
|
101
|
|
18
|
|
|
19
|
|
69
|
|
12
|
|
—
|
|
—
|
|
CLO
|
2,258
|
|
|
(4)
|
|
2,241
|
|
2,245
|
|
|
100
|
|
4
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
U.S. Government
agencies
|
1,554
|
|
|
(5)
|
|
1,858
|
|
1,856
|
|
|
100
|
|
(2)
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Consumer
ABS
|
3,400
|
|
|
(1)
|
|
3,347
|
|
3,348
|
|
|
100
|
|
1
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Other
(c)
|
2,890
|
|
|
(3)
|
|
3,000
|
|
3,008
|
|
|
100
|
|
8
|
|
|
41
|
|
—
|
|
55
|
|
—
|
|
4
|
|
Total investment
securities
|
$
|
128,892
|
|
(d)
|
$
|
(926)
|
|
$
|
122,223
|
|
$
|
122,975
|
|
(d)
|
100
|
%
|
$
|
752
|
|
(d)(e)
|
90
|
%
|
3
|
%
|
5
|
%
|
2
|
%
|
—
|
%
|
(a) Amortized cost before impairments.
(b) These RMBS were included in the former
Grantor Trust and were marked-to-market in 2009. We believe
these RMBS would receive higher credit ratings if these ratings
incorporated, as additional credit enhancements, the difference
between the written-down amortized cost and the current face amount
of each of these securities.
(c) Includes commercial paper with a fair
value of $1.6 billion and
$1.7 billion and money market funds
with a fair value of $814 million and
$779 million at March 31, 2015
and June 30, 2015,
respectively.
(d) Includes net unrealized losses on derivatives
hedging securities available-for-sale of $501 million at March 31, 2015 and
$71 million at June 30, 2015.
(e) Unrealized gains of $740 million at June 30,
2015 related to available-for-sale securities.
NONPERFORMING ASSETS
Nonperforming
assets
(dollars in
millions)
|
June 30,
2014
|
March 31,
2015
|
June 30,
2015
|
Loans:
|
|
|
|
Other residential
mortgages
|
$
|
105
|
|
$
|
111
|
|
$
|
110
|
|
Wealth management
loans and mortgages
|
12
|
|
12
|
|
11
|
|
Commercial real
estate
|
4
|
|
1
|
|
1
|
|
Commercial
|
13
|
|
—
|
|
—
|
|
Foreign
|
4
|
|
—
|
|
—
|
|
Total nonperforming
loans
|
138
|
|
124
|
|
122
|
|
Other assets
owned
|
4
|
|
4
|
|
5
|
|
Total nonperforming
assets (a)
|
$
|
142
|
|
$
|
128
|
|
$
|
127
|
|
Nonperforming assets
ratio
|
0.24
|
%
|
0.21
|
%
|
0.20
|
%
|
Allowance for loan
losses/nonperforming loans
|
135.5
|
|
153.2
|
|
150.0
|
|
Total allowance for
credit losses/nonperforming loans
|
225.4
|
|
228.2
|
|
227.9
|
|
(a) Loans of consolidated investment management
funds are not part of BNY Mellon's loan portfolio. Included
in the loans of consolidated investment management funds are
nonperforming loans of $68 million at
June 30, 2014. These loans are recorded at fair value
and therefore do not impact the provision for credit losses and
allowance for loan losses, and accordingly are excluded from the
nonperforming assets table above. In 2Q15, BNY Mellon adopted
the new accounting guidance included in ASU 2015-02,
Consolidations. As a result, we deconsolidated substantially
all of the loans of consolidated investment management funds
retroactively to Jan. 1, 2015.
See page 24 for additional information on the new accounting
guidance.
Nonperforming assets were $127
million at June 30, 2015, a
decrease of $1 million compared with
$128 million at March 31,
2015.
ALLOWANCE FOR CREDIT LOSSES, PROVISION AND NET
CHARGE-OFFS
Allowance for
credit losses, provision and net charge-offs
(in
millions)
|
June 30,
2014
|
March 31,
2015
|
June 30,
2015
|
Allowance for credit
losses - beginning of period
|
$
|
326
|
|
$
|
280
|
|
$
|
283
|
|
Provision for credit
losses
|
(12)
|
|
2
|
|
(6)
|
|
Net (charge-offs)
recoveries:
|
|
|
|
Financial
institutions
|
—
|
|
—
|
|
1
|
|
Other residential
mortgages
|
(1)
|
|
1
|
|
—
|
|
Commercial
|
1
|
|
—
|
|
—
|
|
Wealth management
loans and mortgages
|
(1)
|
|
—
|
|
—
|
|
Foreign
|
(2)
|
|
—
|
|
—
|
|
Net (charge-offs)
recoveries
|
(3)
|
|
1
|
|
1
|
|
Allowance for credit
losses - end of period
|
$
|
311
|
|
$
|
283
|
|
$
|
278
|
|
Allowance for loan
losses
|
$
|
187
|
|
$
|
190
|
|
$
|
183
|
|
Allowance for
lending-related commitments
|
124
|
|
93
|
|
95
|
|
The allowance for credit losses was $278
million at June 30, 2015, a
decrease of $5 million compared with
$283 million at March 31,
2015.
CAPITAL AND LIQUIDITY
The common equity Tier 1 ("CET1"), Tier 1 and Total risk-based
regulatory capital ratios in the first section of the table below
are based on Basel III components of capital, as phased-in, and
credit risk asset risk-weightings using the U.S. capital rules'
advanced approaches framework (the "Advanced Approach") as the
related risk-weighted assets ("RWA") were higher when calculated
under the Advanced Approach at Dec. 31,
2014, March 31, 2015 and June
30, 2015. Our risk-based capital adequacy is
determined using the higher of RWA determined using the Advanced
Approach and the U.S. capital rules' standardized approach (the
"Standardized Approach"). The leverage capital ratios are
based on Basel III components of capital, as phased-in and
quarterly average total assets. Our consolidated capital
ratios are shown in the following table.
Capital
ratios
|
Dec. 31,
2014
|
March 31,
2015
|
June 30,
2015
|
Consolidated
regulatory capital ratios: (a)(b)(c)
|
|
|
|
CET1 ratio
|
11.2
|
%
|
10.8
|
%
|
10.9
|
%
|
Tier 1 capital
ratio
|
12.2
|
|
11.7
|
|
12.4
|
|
Total (Tier 1 plus
Tier 2) capital ratio
|
12.5
|
|
12.0
|
|
12.7
|
|
Leverage capital
ratio
|
5.6
|
|
5.7
|
|
5.8
|
|
BNY Mellon
shareholders' equity to total assets ratio – GAAP
(b)(d)
|
9.7
|
|
9.5
|
|
9.7
|
|
BNY Mellon common
shareholders' equity to total assets ratio – GAAP
(b)(d)
|
9.3
|
|
9.1
|
|
9.0
|
|
BNY Mellon tangible
common shareholders' equity to tangible assets of operations ratio
– Non-GAAP (d)
|
6.5
|
|
6.0
|
|
6.2
|
|
|
|
|
|
Selected
regulatory capital ratios – fully phased-in – Non-GAAP:
(a)(b)
|
|
|
|
Estimated CET1
ratio:
|
|
|
|
Standardized
Approach
|
10.6
|
|
10.0
|
|
10.0
|
|
Advanced
Approach
|
9.8
|
|
9.9
|
|
9.9
|
|
Estimated
supplementary leverage ratio ("SLR")
|
4.4
|
|
4.6
|
|
4.6
|
|
(a) Regulatory capital ratios for June 30, 2015 are preliminary.
(b) Capital ratios for the first quarter of 2015
were revised to reflect the retrospective application of adopting
new accounting guidance in 2Q15 related to Consolidations (ASU
2015-02). As a result of the new accounting guidance, the RWA
as of March 31, 2015 decreased
$13.3 billion under the Advanced
Approach and $7.0 billion under the
Standardized Approach. See page 24 for additional information
on the new accounting guidance.
(c) At Dec. 31,
2014, the CET1, Tier 1 and Total risk-based consolidated
regulatory capital ratios determined under the transitional
Standardized Approach were 15.0%, 16.3% and 16.9%, and were
calculated based on Basel III components of capital, as phased-in,
and asset risk-weightings using Basel I-based requirements.
At March 31, 2015 and June 30, 2015, the CET1, Tier 1 and Total
risk-based consolidated regulatory capital ratios determined under
the transitional Basel III Standardized Approach were 11.2%, 12.2%,
and 12.7%, and 11.3%, 12.9% and 13.4%, respectively.
Additionally, the capital ratios determined under the transitional
Basel III Standardized Approach for March
31, 2015 were revised to reflect the new accounting guidance
related to Consolidations.
(d) See "Supplemental information – Explanation
of GAAP and Non-GAAP financial measures" beginning on page 25 for a
reconciliation of these ratios.
Estimated Basel
III CET1 generation presented on a fully phased-in basis – Non-GAAP
– preliminary
|
|
(in
millions)
|
2Q15
|
Estimated fully
phased-in Basel III CET1 – Non-GAAP – Beginning of
period
|
$
|
16,123
|
|
Net income applicable
to common shareholders of The Bank of New York Mellon Corporation –
GAAP
|
830
|
|
Goodwill and
intangible assets, net of related deferred tax
liabilities
|
(129)
|
|
Gross Basel III CET1
generated
|
701
|
|
Capital
deployed:
|
|
Dividends
|
(192)
|
|
Common stock
repurchased
|
(834)
|
|
Total capital
deployed
|
(1,026)
|
|
Other comprehensive
(loss)
|
(43)
|
|
Additional paid-in
capital (a)
|
191
|
|
Other (primarily cash
flow hedges)
|
(15)
|
|
Total other
additions
|
133
|
|
Net Basel III CET1
generated
|
(192)
|
|
Estimated fully
phased-in Basel III CET1 – Non-GAAP – End of period
|
$
|
15,931
|
|
(a) Primarily related to stock awards, the
exercise of stock options and stock issued for employee benefit
plans.
The table presented below compares the fully phased-in Basel III
capital components and ratios to those capital components and
ratios determined on a phased-in basis (referred to as the
"Transitional Approach").
Basel III capital
components and ratios at June 30, 2015 –
preliminary
|
Fully phased-in
Basel III -
Non-GAAP
|
|
Transitional
Approach (a)
|
(dollars in
millions)
|
|
CET1:
|
|
|
|
Common shareholders'
equity
|
$
|
35,718
|
|
|
$
|
36,253
|
|
Goodwill and
intangible assets
|
(19,277)
|
|
|
(17,584)
|
|
Net pension fund
assets
|
(109)
|
|
|
(44)
|
|
Equity method
investments
|
(374)
|
|
|
(315)
|
|
Deferred tax
assets
|
(18)
|
|
|
(7)
|
|
Other
|
(9)
|
|
|
(5)
|
|
Total CET1
|
15,931
|
|
|
18,298
|
|
Other Tier 1
capital:
|
|
|
|
Preferred
stock
|
2,552
|
|
|
2,552
|
|
Trust preferred
securities
|
—
|
|
|
79
|
|
Disallowed deferred
tax assets
|
—
|
|
|
(11)
|
|
Net pension fund
assets
|
—
|
|
|
(65)
|
|
Other
|
(7)
|
|
|
(11)
|
|
Total Tier 1
capital
|
18,476
|
|
|
20,842
|
|
|
|
|
|
Tier 2
capital:
|
|
|
|
Trust preferred
securities
|
—
|
|
|
236
|
|
Subordinated
debt
|
248
|
|
|
248
|
|
Allowance for credit
losses
|
278
|
|
|
278
|
|
Other
|
(6)
|
|
|
(7)
|
|
Total Tier 2 capital
- Standardized Approach
|
520
|
|
|
755
|
|
Excess of expected
credit losses
|
12
|
|
|
12
|
|
Less: Allowance for
credit losses
|
278
|
|
|
278
|
|
Total Tier 2 capital
- Advanced Approach
|
$
|
254
|
|
|
$
|
489
|
|
|
|
|
|
Total
capital:
|
|
|
|
Standardized
Approach
|
$
|
18,996
|
|
|
$
|
21,597
|
|
Advanced
Approach
|
$
|
18,730
|
|
|
$
|
21,331
|
|
|
|
|
|
Risk-weighted
assets:
|
|
|
|
Standardized
Approach
|
$
|
160,031
|
|
|
$
|
161,825
|
|
Advanced
Approach
|
$
|
160,505
|
|
|
$
|
167,562
|
|
|
|
|
|
Standardized
Approach:
|
|
|
|
Estimated Basel III
CET1 ratio
|
10.0
|
%
|
|
11.3
|
%
|
Tier 1 capital
ratio
|
11.6
|
|
|
12.9
|
|
Total (Tier 1 plus
Tier 2) capital ratio
|
11.9
|
|
|
13.4
|
|
|
|
|
|
Advanced
Approach:
|
|
|
|
Estimated Basel III
CET1 ratio
|
9.9
|
%
|
|
10.9
|
%
|
Tier 1 capital
ratio
|
11.5
|
|
|
12.4
|
|
Total (Tier 1 plus
Tier 2) capital ratio
|
11.7
|
|
|
12.7
|
|
(a) Reflects transitional adjustments to CET1,
Tier 1 capital and Tier 2 capital required in 2015 under the U.S.
capital rules.
BNY Mellon has presented its estimated fully phased-in Basel III
CET1 and other risk-based capital ratios and SLR based on its
interpretation of the U.S. capital rules, which are being gradually
phased-in over a multi-year period, and on the application of such
rules to BNY Mellon's businesses as currently conducted.
Management views the estimated fully phased-in Basel III CET1 and
other risk-based capital ratios and SLR as key measures in
monitoring BNY Mellon's capital position and progress against
future regulatory capital standards. Additionally, the
presentation of the estimated fully phased-in Basel III CET1 and
other risk-based capital ratios and SLR are intended to allow
investors to compare these ratios with estimates presented by other
companies. The estimated fully phased-in Basel III CET1 and
other risk-based capital ratios assume all relevant regulatory
approvals. The U.S. capital rules require approval by banking
regulators of certain models used as part of RWA
calculations. If these models are not approved, the estimated
fully phased-in Basel III CET1 and other risk-based capital ratios
would likely be adversely impacted.
RWA at Dec. 31, 2014,
March 31, 2015 and June 30, 2015
for credit risk under the transitional Advanced Approach do not
reflect the use of a simple value-at-risk methodology for
repo-style transactions (including agented indemnified securities
lending transactions), eligible margin loans, and similar
transactions. BNY Mellon has requested written approval to
use this methodology.
Our capital and liquidity ratios are necessarily subject to,
among other things, BNY Mellon's further review of applicable
rules, anticipated compliance with all necessary enhancements to
model calibration, approval by regulators of certain models used as
part of RWA calculations, other refinements, further implementation
guidance from regulators, market practices and standards and any
changes BNY Mellon may make to its businesses. Consequently,
our capital and liquidity ratios remain subject to ongoing review
and revision and may change based on these factors.
Supplementary Leverage Ratio ("SLR")
The following table presents the components of our estimated SLR
using fully phased-in Basel III components of capital.
Estimated fully
phased-in SLR – Non-GAAP (a)
(dollars in
millions)
|
Dec. 31,
2014
|
|
March 31,
2015
|
|
June 30,
2015
|
|
(b)
|
Total estimated fully
phased-in Basel III CET1 – Non-GAAP
|
$
|
15,931
|
|
$
|
16,123
|
|
$
|
15,931
|
|
|
Additional Tier 1
capital
|
1,550
|
|
1,560
|
|
2,545
|
|
|
Total Tier 1
capital
|
$
|
17,481
|
|
$
|
17,683
|
|
$
|
18,476
|
|
|
|
|
|
|
|
Total leverage
exposure:
|
|
|
|
|
Quarterly average
total assets (c)
|
$
|
385,232
|
|
$
|
368,411
|
|
$
|
378,293
|
|
|
Less: Amounts
deducted from Tier 1 capital
|
19,947
|
|
19,644
|
|
19,779
|
|
|
Total on-balance
sheet assets, as adjusted (c)
|
365,285
|
|
348,767
|
|
358,514
|
|
|
Off-balance sheet
exposures:
|
|
|
|
|
Potential future
exposure for derivatives contracts (plus certain other
items)
|
11,376
|
|
9,295
|
|
9,222
|
|
|
Repo-style
transaction exposures included in SLR
|
302
|
|
6,474
|
|
6,589
|
|
|
Credit-equivalent
amount of other off-balance sheet exposures (less SLR
exclusions)
|
21,850
|
|
22,046
|
|
27,251
|
|
|
Total off-balance
sheet exposures
|
33,528
|
|
37,815
|
|
43,062
|
|
|
Total leverage
exposure (c)
|
$
|
398,813
|
|
$
|
386,582
|
|
$
|
401,576
|
|
|
|
|
|
|
|
Estimated fully
phased-in SLR – Non-GAAP (c)
|
4.4
|
%
|
4.6
|
%
|
4.6
|
%
|
|
(a) The estimated fully phased-in SLR (Non-GAAP)
is based on our interpretation of the U.S. capital rules.
When the SLR is fully phased-in, we expect to maintain an SLR of
over 5%. The minimum required SLR is 3% and there is a 2%
buffer, in addition to the minimum, that is applicable to U.S.
G-SIBs.
(b) June 30, 2015
information is preliminary.
(c) The first quarter of 2015 was restated
to reflect the retrospective application of adopting new accounting
guidance related to Consolidations (ASU 2015-02).
- The SLR increased slightly on a sequential basis, as both total
Tier 1 capital and total leverage exposure increased.
- The increase in total Tier 1 capital was driven by the issuance
of preferred stock.
- The increase in leverage exposure was driven by:
- an increase in average total assets, primarily interest-earning
assets, as a result of higher average deposits and securities sold
under repurchase agreements.
- an increase in the credit equivalent amount of other
off-balance sheet exposures primarily from the secured intraday
credit provided to dealers in connection with their tri-party repo
activity.
Liquidity Coverage Ratio ("LCR")
The U.S. LCR rules became effective Jan.
1, 2015 and require BNY Mellon to meet an LCR of 80%,
increasing annually by 10% increments until fully phased-in on
Jan. 1, 2017, at which time we will
be required to meet an LCR of 100%. Our estimated LCR on a
consolidated basis is compliant with the fully phased-in
requirements of the U.S. LCR as of June 30,
2015 based on our current understanding of the U.S. LCR
rules.
INVESTMENT MANAGEMENT provides investment management
services to institutional and retail investors, as well as
investment management, wealth and estate planning and private
banking solutions to high net worth individuals and families, and
foundations and endowments.
(dollars in
millions, unless otherwise noted)
|
|
|
|
|
|
|
2Q15
vs.
|
2Q14
|
3Q14
|
4Q14
|
1Q15
|
2Q15
|
|
2Q14
|
1Q15
|
Revenue:
|
|
|
|
|
|
|
|
|
Investment management
fees:
|
|
|
|
|
|
|
|
|
Mutual
funds
|
$
|
311
|
|
$
|
315
|
|
$
|
306
|
|
$
|
301
|
|
$
|
307
|
|
|
(1)%
|
|
2
|
%
|
Institutional
clients
|
385
|
|
382
|
|
375
|
|
376
|
|
376
|
|
|
(2)
|
|
—
|
|
Wealth
management
|
156
|
|
158
|
|
157
|
|
158
|
|
161
|
|
|
3
|
|
2
|
|
Investment management
fees
|
852
|
|
855
|
|
838
|
|
835
|
|
844
|
|
|
(1)
|
|
1
|
|
Performance
fees
|
29
|
|
22
|
|
44
|
|
15
|
|
20
|
|
|
(31)
|
|
N/M
|
Investment management
and performance fees
|
881
|
|
877
|
|
882
|
|
850
|
|
864
|
|
|
(2)
|
|
2
|
|
Distribution and
servicing
|
41
|
|
41
|
|
40
|
|
39
|
|
37
|
|
|
(10)
|
|
(5)
|
|
Other
(a)
|
48
|
|
16
|
|
7
|
|
47
|
|
25
|
|
|
N/M
|
N/M
|
Total fee and other
revenue (a)
|
970
|
|
934
|
|
929
|
|
936
|
|
926
|
|
|
(5)
|
|
(1)
|
|
Net interest
revenue
|
66
|
|
69
|
|
69
|
|
74
|
|
78
|
|
|
18
|
|
5
|
|
Total
revenue
|
1,036
|
|
1,003
|
|
998
|
|
1,010
|
|
1,004
|
|
|
(3)
|
|
(1)
|
|
Noninterest expense
(ex. amortization of intangible assets and the charge related to
investment management funds, net of incentives)
|
725
|
|
727
|
|
729
|
|
721
|
|
714
|
|
|
(2)
|
|
(1)
|
|
Income before taxes
(ex. amortization of intangible assets and the charge related to
investment management funds, net of incentives)
|
311
|
|
276
|
|
269
|
|
289
|
|
290
|
|
|
(7)
|
|
—
|
|
Amortization of
intangible assets
|
31
|
|
31
|
|
30
|
|
25
|
|
25
|
|
|
(19)
|
|
—
|
|
Charge related to
investment management funds, net of incentives
|
109
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
N/M
|
N/M
|
Income before
taxes
|
$
|
171
|
|
$
|
245
|
|
$
|
239
|
|
$
|
264
|
|
$
|
265
|
|
|
55
|
%
|
—
|
%
|
|
|
|
|
|
|
|
|
|
Pre-tax operating
margin
|
16
|
%
|
24
|
%
|
24
|
%
|
26
|
%
|
26
|
%
|
|
|
|
Adjusted pre-tax
operating margin (b)
|
36
|
%
|
33
|
%
|
32
|
%
|
34
|
%
|
34
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in AUM
(in billions): (c)
|
|
|
|
|
|
|
|
|
Beginning balance of
AUM
|
$
|
1,620
|
|
$
|
1,636
|
|
$
|
1,646
|
|
$
|
1,710
|
|
$
|
1,741
|
|
|
|
|
Net inflows
(outflows):
|
|
|
|
|
|
|
|
|
Long-term:
|
|
|
|
|
|
|
|
|
Equity
|
(4)
|
|
(2)
|
|
(4)
|
|
(6)
|
|
(12)
|
|
|
|
|
Fixed
income
|
(1)
|
|
—
|
|
4
|
|
4
|
|
(2)
|
|
|
|
|
Index
|
7
|
|
(3)
|
|
1
|
|
8
|
|
(9)
|
|
|
|
|
Liability-driven
investments (d)
|
(17)
|
|
18
|
|
24
|
|
8
|
|
5
|
|
|
|
|
Alternative
investments
|
2
|
|
—
|
|
2
|
|
2
|
|
3
|
|
|
|
|
Total long-term
inflows (outflows)
|
(13)
|
|
13
|
|
27
|
|
16
|
|
(15)
|
|
|
|
|
Short
term:
|
|
|
|
|
|
|
|
|
Cash
|
(18)
|
|
19
|
|
5
|
|
1
|
|
(11)
|
|
|
|
|
Total net inflows
(outflows)
|
(31)
|
|
32
|
|
32
|
|
17
|
|
(26)
|
|
|
|
|
Net market/currency
impact/acquisition
|
47
|
|
(22)
|
|
32
|
|
14
|
|
9
|
|
|
|
|
Ending balance of
AUM
|
$
|
1,636
|
|
$
|
1,646
|
|
$
|
1,710
|
|
$
|
1,741
|
|
$
|
1,724
|
|
(e)
|
5
|
%
|
(1)%
|
|
|
|
|
|
|
|
|
|
|
AUM at period end,
by product type: (c)
|
|
|
|
|
|
|
|
|
Equity
|
17
|
%
|
16
|
%
|
16
|
%
|
15
|
%
|
15
|
%
|
|
|
|
Fixed
income
|
14
|
|
13
|
|
13
|
|
13
|
|
13
|
|
|
|
|
Index
|
21
|
|
21
|
|
21
|
|
22
|
|
21
|
|
|
|
|
Liability-driven
investments (d)
|
27
|
|
28
|
|
29
|
|
29
|
|
30
|
|
|
|
|
Alternative
investments
|
4
|
|
4
|
|
4
|
|
4
|
|
4
|
|
|
|
|
Cash
|
17
|
|
18
|
|
17
|
|
17
|
|
17
|
|
|
|
|
Total AUM
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
(e)
|
|
|
|
|
|
|
|
|
|
|
|
Average
balances:
|
|
|
|
|
|
|
|
|
Average
loans
|
$
|
10,372
|
|
$
|
10,772
|
|
$
|
11,124
|
|
$
|
11,634
|
|
$
|
12,298
|
|
|
19
|
%
|
6
|
%
|
Average
deposits
|
$
|
13,458
|
|
$
|
13,764
|
|
$
|
14,604
|
|
$
|
15,218
|
|
$
|
14,640
|
|
|
9
|
%
|
(4)%
|
|
(a) Total fee and other revenue includes the
impact of the consolidated investment management funds, net of
noncontrolling interests. See "Supplemental information –
Explanation of GAAP and Non-GAAP financial measures" beginning on
page 25 for the reconciliation of Non-GAAP measures.
Additionally, other revenue includes asset servicing, treasury
services, foreign exchange and other trading revenue and investment
and other income.
(b) Excludes the net negative impact of money
market fee waivers, amortization of intangible assets and the
charge related to investment management funds, net of incentives,
and is net of distribution and servicing expense. See
"Supplemental information – Explanation of GAAP and Non-GAAP
financial measures" beginning on page 25 for the reconciliation of
this Non-GAAP measure.
(c) Excludes securities lending cash
management assets and assets managed in the Investment Services
business.
(d) Includes currency overlay assets under
management.
(e) Preliminary.
N/M – Not meaningful.
INVESTMENT MANAGEMENT KEY POINTS
- Assets under management were $1.72
trillion at June 30, 2015, an increase of 5%
year-over-year and a decrease of 1% sequentially. The
year-over-year increase primarily resulted from higher market
values, net new business and the Cutwater acquisition,
partially offset by the unfavorable impact of a stronger U.S.
dollar.
- Net long-term outflows were $15
billion in 2Q15 driven by equity, index and fixed income
investments, partially offset by liability-driven and alternative
investments.
- Net short-term outflows were $11
billion in 2Q15.
- Income before taxes excluding amortization of intangible assets
and the charge related to investment management funds, net of
incentives decreased 7% year-over-year and increased slightly on a
sequential basis.
- Total revenue was $1.0 billion, a
decrease of 3% year-over-year and 1% sequentially. The
year-over-year decrease primarily reflects the unfavorable impact
of a stronger U.S. dollar and lower performance fees, partially
offset by the impact of the 1Q15 acquisition of Cutwater and
strategic initiatives. Both decreases also reflect lower seed
capital gains, partially offset by higher equity market values.
- 43% non-U.S. revenue in 2Q15 vs. 45% in 2Q14.
- Investment management fees were $844
million, a decrease of 1% year-over-year, or an increase of
5% on a constant currency basis (Non-GAAP). The increase was
primarily driven by higher equity market values, the impact of the
1Q15 acquisition of Cutwater and strategic initiatives.
Sequentially, investment management fees increased 1% reflecting
higher equity market values.
- Performance fees were $20 million
in 2Q15 compared with $29 million in
2Q14 and $15 million in
1Q15.
- Other revenue was $25 million in
2Q15 compared with $48 million in
2Q14 and $47 million in 1Q15.
Both decreases primarily reflect lower seed capital gains,
partially offset by gains on hedging activities within a
boutique.
- Net interest revenue increased 18% year-over-year and 5%
sequentially. Both increases primarily reflect higher loan
levels. The year-over-year increase also reflects higher
average deposits.
- Average loans increased 19% year-over-year and 6% sequentially;
average deposits increased 9% year-over-year and decreased 4%
sequentially.
- Total noninterest expense (excluding amortization of intangible
assets and the charge related to investment management funds, net
of incentives) decreased 2% year-over-year and 1%
sequentially. The year-over-year decrease primarily reflects
the favorable impact of a stronger U.S. dollar and lower
distribution and servicing expense, partially offset by the impact
of the Cutwater acquisition and investments in strategic
initiatives. The sequential decrease primarily reflects lower
incentive expense.
INVESTMENT SERVICES provides global custody and related
services, broker-dealer services, global collateral services,
corporate trust, depositary receipt and clearing services as well
as global payment/working capital solutions to global financial
institutions.
(dollars in
millions, unless otherwise noted)
|
|
|
|
|
|
|
2Q15
vs.
|
2Q14
|
3Q14
|
4Q14
|
1Q15
|
2Q15
|
|
2Q14
|
1Q15
|
Revenue:
|
|
|
|
|
|
|
|
|
Investment services
fees:
|
|
|
|
|
|
|
|
|
Asset
servicing
|
$
|
993
|
|
$
|
998
|
|
$
|
992
|
|
$
|
1,013
|
|
$
|
1,035
|
|
|
4
|
%
|
2
|
%
|
Clearing
services
|
324
|
|
336
|
|
346
|
|
342
|
|
346
|
|
|
7
|
|
1
|
|
Issuer
services
|
231
|
|
314
|
|
193
|
|
231
|
|
234
|
|
|
1
|
|
1
|
|
Treasury
services
|
140
|
|
139
|
|
142
|
|
135
|
|
141
|
|
|
1
|
|
4
|
|
Total investment
services fees
|
1,688
|
|
1,787
|
|
1,673
|
|
1,721
|
|
1,756
|
|
|
4
|
|
2
|
|
Foreign exchange and
other trading revenue
|
145
|
|
159
|
|
165
|
|
209
|
|
179
|
|
|
23
|
|
(14)
|
|
Other
(a)
|
87
|
|
59
|
|
69
|
|
63
|
|
85
|
|
|
(2)
|
|
35
|
|
Total fee and other
revenue
|
1,920
|
|
2,005
|
|
1,907
|
|
1,993
|
|
2,020
|
|
|
5
|
|
1
|
|
Net interest
revenue
|
593
|
|
583
|
|
574
|
|
600
|
|
635
|
|
|
7
|
|
6
|
|
Total
revenue
|
2,513
|
|
2,588
|
|
2,481
|
|
2,593
|
|
2,655
|
|
|
6
|
|
2
|
|
Noninterest expense
(ex. amortization of intangible assets)
|
1,824
|
|
1,835
|
|
2,512
|
|
1,797
|
|
1,841
|
|
|
1
|
|
2
|
|
Income (loss) before
taxes (ex. amortization of intangible assets)
|
689
|
|
753
|
|
(31)
|
|
796
|
|
814
|
|
|
18
|
|
2
|
|
Amortization of
intangible assets
|
44
|
|
44
|
|
43
|
|
41
|
|
40
|
|
|
(9)
|
|
(2)
|
|
Income (loss) before
taxes
|
$
|
645
|
|
$
|
709
|
|
$
|
(74)
|
|
$
|
755
|
|
$
|
774
|
|
|
20
|
%
|
3
|
%
|
|
|
|
|
|
|
|
|
|
Pre-tax operating
margin
|
26
|
%
|
27
|
%
|
(3)
|
%
|
29
|
%
|
29
|
%
|
|
|
|
Pre-tax operating
margin (ex. amortization of intangible assets)
|
27
|
%
|
29
|
%
|
(1)
|
%
|
31
|
%
|
31
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment services
fees as a percentage of noninterest expense (b)
|
93
|
%
|
100
|
%
|
92
|
%
|
96
|
%
|
98
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities lending
revenue
|
$
|
35
|
|
$
|
27
|
|
$
|
28
|
|
$
|
34
|
|
$
|
40
|
|
|
14
|
%
|
18
|
%
|
|
|
|
|
|
|
|
|
|
Metrics:
|
|
|
|
|
|
|
|
|
Average
loans
|
$
|
33,115
|
|
$
|
33,785
|
|
$
|
35,448
|
|
$
|
37,699
|
|
$
|
38,264
|
|
|
16
|
%
|
1
|
%
|
Average
deposits
|
$
|
220,701
|
|
$
|
221,734
|
|
$
|
228,282
|
|
$
|
234,183
|
|
$
|
237,193
|
|
|
7
|
%
|
1
|
%
|
|
|
|
|
|
|
|
|
|
AUC/A at period end
(in trillions) (c)
|
$
|
28.5
|
|
$
|
28.3
|
|
$
|
28.5
|
|
$
|
28.5
|
|
$
|
28.6
|
|
(d)
|
—
|
%
|
—
|
%
|
Market value of
securities on loan at period end
(in billions)
(e)
|
$
|
280
|
|
$
|
282
|
|
$
|
289
|
|
$
|
291
|
|
$
|
283
|
|
|
1
|
%
|
(3)
|
%
|
|
|
|
|
|
|
|
|
|
Asset
servicing:
|
|
|
|
|
|
|
|
|
Estimated new
business wins (AUC/A) (in billions)
|
$
|
130
|
|
$
|
115
|
|
$
|
130
|
|
$
|
131
|
|
$
|
1,024
|
|
(d)
|
|
|
|
|
|
|
|
|
|
|
|
Depositary
Receipts:
|
|
|
|
|
|
|
|
|
Number of sponsored
programs
|
1,316
|
|
1,302
|
|
1,279
|
|
1,258
|
|
1,206
|
|
|
(8)
|
%
|
(4)
|
%
|
|
|
|
|
|
|
|
|
|
Clearing
services:
|
|
|
|
|
|
|
|
|
Global DARTS volume
(in thousands)
|
207
|
|
209
|
|
242
|
|
261
|
|
242
|
|
|
17
|
%
|
(7)
|
%
|
Average active
clearing accounts (U.S. platform)
(in
thousands)
|
5,752
|
|
5,805
|
|
5,900
|
|
5,979
|
|
6,046
|
|
|
5
|
%
|
1
|
%
|
Average long-term
mutual fund assets (U.S. platform)
|
$
|
433,047
|
|
$
|
442,827
|
|
$
|
450,305
|
|
$
|
456,954
|
|
$
|
466,195
|
|
|
8
|
%
|
2
|
%
|
Average investor
margin loans (U.S. platform)
|
$
|
9,236
|
|
$
|
9,861
|
|
$
|
10,711
|
|
$
|
11,232
|
|
$
|
11,890
|
|
|
29
|
%
|
6
|
%
|
|
|
|
|
|
|
|
|
|
Broker-Dealer:
|
|
|
|
|
|
|
|
|
Average tri-party
repo balances (in billions)
|
$
|
2,022
|
|
$
|
2,063
|
|
$
|
2,101
|
|
$
|
2,153
|
|
$
|
2,174
|
|
|
8
|
%
|
1
|
%
|
(a) Other revenue includes investment management
fees, financing-related fees, distribution and servicing revenue,
and investment and other income.
(b) Noninterest expense excludes amortization of
intangible assets and litigation expense.
(c) Includes the AUC/A of CIBC Mellon of
$1.2 trillion at June 30, 2014 and Sept.
30, 2014 and $1.1 trillion at
Dec. 31, 2014, March 31, 2015 and June
30, 2015.
(d) Preliminary.
(e) Represents the total amount of
securities on loan managed by the Investment Services
business. Excludes securities for which BNY Mellon acts as
agent on behalf of CIBC Mellon clients, which totaled $64 billion at June 30,
2014, $65 billion at
Sept. 30, 2014 and Dec. 31, 2014, $69
billion at March 31, 2015 and
$68 billion at June 30, 2015.
INVESTMENT SERVICES KEY POINTS
- Income before taxes excluding amortization of intangible assets
totaled $814 million, an increase of
18% year-over-year.
- The pre-tax operating margin excluding amortization of
intangible assets was 31% in 2Q15 and the investment services fees
as a percentage of noninterest expense was 98% in 2Q15, reflecting
the continued focus on driving operating leverage.
- Investment services fees totaled $1.8
billion, an increase of 4% year-over-year and 2%
sequentially.
- Asset servicing fees (global custody, broker-dealer services
and global collateral services) were $1.04
billion in 2Q15 compared with $993
million in 2Q14 and $1.01
billion in 1Q15. The year-over-year increase primarily
reflects organic growth, due in part to Global Collateral
Services, net new business and higher market values, partially
offset by the unfavorable impact of a stronger U.S. dollar.
The sequential increase primarily reflects organic growth and
seasonally higher securities lending revenue.
- Estimated new business wins (AUC/A) in Asset Servicing of
$1.02 trillion in 2Q15.
- Clearing services fees were $346
million in 2Q15 compared with $324
million in 2Q14 and $342
million in 1Q15. The year-over-year increase was
primarily driven by higher mutual fund and asset-based fees,
clearance revenue and custody fees. The sequential increase
was primarily driven by two additional trading days in
2Q15.
- Issuer services fees (Corporate Trust and Depositary Receipts)
were $234 million in 2Q15 compared
with $231 million in both 2Q14 and
1Q15. Both increases primarily reflect higher Depositary
Receipts revenue, partially offset by lower Corporate Trust
fees. The year-over-year decrease in Corporate Trust fees
primarily reflects the unfavorable impact of a stronger U.S.
dollar.
- Treasury services fees were $141
million in 2Q15 compared with $140
million in 2Q14 and $135
million in 1Q15. The year-over-year increase primarily
reflects higher payment volumes. The sequential increase
primarily reflects three additional business days in 2Q15.
- Foreign exchange and other trading revenue was $179 million in 2Q15 compared with $145 million in 2Q14 and $209 million in 1Q15. The year-over-year
increase primarily reflects higher volatility and volumes, as well
as higher Depositary Receipts-related activity. The
sequential decrease primarily reflects the benefit of unusually
high volatility in 1Q15.
- Net interest revenue was $635
million in 2Q15 compared with $593
million in 2Q14 and $600
million in 1Q15. Both increases primarily reflect
higher average deposits and higher internal crediting rates for
deposits.
- Noninterest expense (excluding amortization of intangible
assets) was $1.84 billion in 2Q15
compared with $1.82 billion in 2Q14
and $1.80 billion in 1Q15. The
year-over-year increase reflects higher litigation expense,
partially offset by lower consulting expense and the favorable
impact of a stronger U.S. dollar. The sequential increase
primarily reflects higher litigation expense.
OTHER SEGMENT primarily includes credit-related
activities, leasing operations, corporate treasury activities,
global markets and institutional banking services, business exits,
M&I expenses and other corporate revenue and expense items.
|
|
|
|
|
|
(dollars in
millions)
|
2Q14
|
3Q14
|
4Q14
|
1Q15
|
2Q15
|
Revenue:
|
|
|
|
|
|
Fee and other
revenue
|
$
|
119
|
|
$
|
928
|
|
$
|
117
|
|
$
|
104
|
|
$
|
124
|
|
Net interest
revenue
|
60
|
|
69
|
|
69
|
|
54
|
|
66
|
|
Total
revenue
|
179
|
|
997
|
|
186
|
|
158
|
|
190
|
|
Provision for credit
losses
|
(12)
|
|
(19)
|
|
1
|
|
2
|
|
(6)
|
|
Noninterest expense
(ex. M&I and restructuring charges)
|
93
|
|
274
|
|
210
|
|
120
|
|
98
|
|
Income (loss) before
taxes (ex. M&I and restructuring charges)
|
98
|
|
742
|
|
(25)
|
|
36
|
|
98
|
|
M&I and
restructuring charges (recoveries)
|
120
|
|
57
|
|
—
|
|
(4)
|
|
8
|
|
Income (loss) before
taxes
|
$
|
(22)
|
|
$
|
685
|
|
$
|
(25)
|
|
$
|
40
|
|
$
|
90
|
|
|
|
|
|
|
|
Average loans and
leases
|
$
|
9,962
|
|
$
|
10,278
|
|
$
|
10,272
|
|
$
|
8,602
|
|
$
|
10,515
|
|
KEY POINTS
- Total fee and other revenue increased $5
million compared with 2Q14 and $20
million compared with 1Q15. Both increases primarily
reflect higher leasing gains. The year-over-year increase
also reflected higher other trading revenue, which was more than
offset by lower other revenue. The sequential increase was
partially offset by lower other trading revenue and net securities
gains.
- Net interest revenue increased $6
million compared with 2Q14 and $12
million compared with 1Q15. Both increases primarily
reflect higher interest-earning assets, partially offset by higher
internal crediting rates to the business for deposits.
- Noninterest expense (excluding M&I and restructuring
charges) increased $5 million
compared with 2Q14 and decreased $22
million compared with 1Q15. The year-over-year
increase primarily reflects higher corporate donations. The
sequential decrease was driven by lower incentive expense driven by
the impact of vesting of long-term stock awards for retirement
eligible employees recorded in 1Q15, partially offset by higher
employee benefits expense reflecting the curtailment gain also
recorded in 1Q15.
THE BANK OF NEW YORK MELLON
CORPORATION
Condensed
Consolidated Income Statement
(in
millions)
|
Quarter
ended
|
|
Year-to-date
|
|
June 30,
2015
|
March 31,
2015
|
June 30,
2014
|
|
June 30,
2015
|
June 30,
2014
|
|
|
|
Fee and other
revenue
|
|
|
|
|
|
|
|
Investment services
fees:
|
|
|
|
|
|
|
|
Asset
servicing
|
$
|
1,060
|
|
$
|
1,038
|
|
$
|
1,022
|
|
|
$
|
2,098
|
|
$
|
2,031
|
|
|
Clearing
services
|
347
|
|
344
|
|
326
|
|
|
691
|
|
651
|
|
|
Issuer
services
|
234
|
|
232
|
|
231
|
|
|
466
|
|
460
|
|
|
Treasury
services
|
144
|
|
137
|
|
141
|
|
|
281
|
|
277
|
|
|
Total investment
services fees
|
1,785
|
|
1,751
|
|
1,720
|
|
|
3,536
|
|
3,419
|
|
|
Investment management
and performance fees (a)
|
878
|
|
867
|
|
883
|
|
|
1,745
|
|
1,726
|
|
|
Foreign exchange and
other trading revenue
|
187
|
|
229
|
|
130
|
|
|
416
|
|
266
|
|
|
Financing-related
fees
|
58
|
|
40
|
|
44
|
|
|
98
|
|
82
|
|
|
Distribution and
servicing
|
39
|
|
41
|
|
43
|
|
|
80
|
|
86
|
|
|
Investment and other
income (a)
|
104
|
|
60
|
|
142
|
|
|
164
|
|
244
|
|
|
Total fee revenue
(a)
|
3,051
|
|
2,988
|
|
2,962
|
|
|
6,039
|
|
5,823
|
|
|
Net securities
gains
|
16
|
|
24
|
|
18
|
|
|
40
|
|
40
|
|
|
Total fee and other
revenue (a)
|
3,067
|
|
3,012
|
|
2,980
|
|
|
6,079
|
|
5,863
|
|
|
Operations of
consolidated investment management funds
|
|
|
|
|
|
|
|
Investment income
(a)
|
46
|
|
56
|
|
141
|
|
|
102
|
|
279
|
|
|
Interest of
investment management fund note holders (a)
|
6
|
|
4
|
|
95
|
|
|
10
|
|
197
|
|
|
Income from
consolidated investment management funds (a)
|
40
|
|
52
|
|
46
|
|
|
92
|
|
82
|
|
|
Net interest
revenue
|
|
|
|
|
|
|
|
Interest
revenue
|
847
|
|
807
|
|
811
|
|
|
1,654
|
|
1,623
|
|
|
Interest
expense
|
68
|
|
79
|
|
92
|
|
|
147
|
|
176
|
|
|
Net interest
revenue
|
779
|
|
728
|
|
719
|
|
|
1,507
|
|
1,447
|
|
|
Provision for credit
losses
|
(6)
|
|
2
|
|
(12)
|
|
|
(4)
|
|
(30)
|
|
|
Net interest revenue
after provision for credit losses
|
785
|
|
726
|
|
731
|
|
|
1,511
|
|
1,477
|
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
Staff
|
1,434
|
|
1,485
|
|
1,439
|
|
|
2,919
|
|
2,950
|
|
|
Professional, legal
and other purchased services
|
299
|
|
302
|
|
314
|
|
|
601
|
|
626
|
|
|
Software and
equipment
|
228
|
|
228
|
|
236
|
|
|
456
|
|
473
|
|
|
Net
occupancy
|
149
|
|
151
|
|
152
|
|
|
300
|
|
306
|
|
|
Distribution and
servicing
|
96
|
|
98
|
|
112
|
|
|
194
|
|
219
|
|
|
Sub-custodian
|
75
|
|
70
|
|
81
|
|
|
145
|
|
149
|
|
|
Business
development
|
72
|
|
61
|
|
68
|
|
|
133
|
|
132
|
|
|
Other
|
250
|
|
242
|
|
347
|
|
|
492
|
|
570
|
|
|
Amortization of
intangible assets
|
65
|
|
66
|
|
75
|
|
|
131
|
|
150
|
|
|
Merger and
integration, litigation and restructuring charges
|
59
|
|
(3)
|
|
122
|
|
|
56
|
|
110
|
|
|
Total noninterest
expense
|
2,727
|
|
2,700
|
|
2,946
|
|
|
5,427
|
|
5,685
|
|
|
Income
|
|
|
|
|
|
|
|
Income before income
taxes (a)
|
1,165
|
|
1,090
|
|
811
|
|
|
2,255
|
|
1,737
|
|
|
Provision for income
taxes
|
276
|
|
280
|
|
217
|
|
|
556
|
|
449
|
|
|
Net income
(a)
|
889
|
|
810
|
|
594
|
|
|
1,699
|
|
1,288
|
|
|
Net (income)
attributable to noncontrolling interests (includes $(37), $(31),
$(17), $(68) and $(37) related to consolidated investment
management funds, respectively) (a)
|
(36)
|
|
(31)
|
|
(17)
|
|
|
(67)
|
|
(37)
|
|
|
Net income applicable
to shareholders of The Bank of New York Mellon
Corporation
|
853
|
|
779
|
|
577
|
|
|
1,632
|
|
1,251
|
|
|
Preferred stock
dividends
|
(23)
|
|
(13)
|
|
(23)
|
|
|
(36)
|
|
(36)
|
|
|
Net income applicable
to common shareholders of The Bank of New York Mellon
Corporation
|
$
|
830
|
|
$
|
766
|
|
$
|
554
|
|
|
$
|
1,596
|
|
$
|
1,215
|
|
|
(a) The first quarter of 2015 was restated to
reflect the retrospective application of adopting new accounting
guidance related to Consolidations (ASU 2015-02). See page 24
for additional information.
THE BANK OF NEW YORK MELLON
CORPORATION
Condensed Consolidated Income Statement - continued
Net income
applicable to common shareholders of The Bank of
New York Mellon Corporation used for the earnings per
share calculation
(in
millions)
|
Quarter
ended
|
|
Year-to-date
|
|
June 30,
2015
|
|
March 31,
2015
|
|
June 30,
2014
|
|
|
June 30,
2015
|
|
June 30,
2014
|
|
|
Net income applicable
to common shareholders of The Bank of New York Mellon
Corporation
|
$
|
830
|
|
$
|
766
|
|
$
|
554
|
|
|
$
|
1,596
|
|
$
|
1,215
|
|
|
Less: Earnings
allocated to participating securities
|
9
|
|
12
|
|
10
|
|
|
24
|
|
23
|
|
|
Net income applicable
to the common shareholders of The Bank of New York Mellon
Corporation after required adjustments for the calculation of basic
and diluted earnings per common share
|
$
|
821
|
|
$
|
754
|
|
$
|
544
|
|
|
$
|
1,572
|
|
$
|
1,192
|
|
|
Average common
shares and equivalents outstanding of The Bank
of New York Mellon Corporation
(in
thousands)
|
Quarter
ended
|
|
Year-to-date
|
June 30,
2015
|
|
March 31,
2015
|
|
June 30,
2014
|
|
|
June 30,
2015
|
|
June 30,
2014
|
|
Basic
|
1,113,790
|
|
1,118,602
|
|
1,133,556
|
|
|
1,116,183
|
|
1,136,086
|
|
Diluted
|
1,122,135
|
|
1,126,306
|
|
1,139,800
|
|
|
1,124,154
|
|
1,141,948
|
|
Earnings per share
applicable to the common shareholders of The
Bank of New York Mellon Corporation
(in
dollars)
|
Quarter
ended
|
|
Year-to-date
|
June 30,
2015
|
|
March 31,
2015
|
|
June 30,
2014
|
|
|
June 30,
2015
|
|
June 30,
2014
|
|
Basic
|
$
|
0.74
|
|
$
|
0.67
|
|
$
|
0.48
|
|
|
$
|
1.41
|
|
$
|
1.05
|
|
Diluted
|
$
|
0.73
|
|
$
|
0.67
|
|
$
|
0.48
|
|
|
$
|
1.40
|
|
$
|
1.04
|
|
THE BANK OF NEW YORK MELLON
CORPORATION
Consolidated
Balance Sheet
(dollars in
millions, except per share amounts)
|
June 30,
2015
|
March 31,
2015
|
December 31,
2014
|
|
|
Assets
|
|
|
|
|
Cash and due
from:
|
|
|
|
|
Banks
|
$
|
8,354
|
|
$
|
7,167
|
|
$
|
6,970
|
|
|
Interest-bearing
deposits with the Federal Reserve and other central
banks
|
104,407
|
|
89,704
|
|
96,682
|
|
|
Interest-bearing
deposits with banks
|
19,179
|
|
18,937
|
|
19,495
|
|
|
Federal funds sold
and securities purchased under resale agreements
|
23,930
|
|
28,268
|
|
20,302
|
|
|
Securities:
|
|
|
|
|
Held-to-maturity (fair
value of $43,438, $41,676 and $21,127)
|
43,426
|
|
41,237
|
|
20,933
|
|
|
Available-for-sale
|
79,608
|
|
87,717
|
|
98,330
|
|
|
Total
securities
|
123,034
|
|
128,954
|
|
119,263
|
|
|
Trading
assets
|
7,568
|
|
9,505
|
|
9,881
|
|
|
Loans
|
63,138
|
|
62,326
|
|
59,132
|
|
|
Allowance for loan
losses
|
(183)
|
|
(190)
|
|
(191)
|
|
|
Net loans
|
62,955
|
|
62,136
|
|
58,941
|
|
|
Premises and
equipment
|
1,412
|
|
1,410
|
|
1,394
|
|
|
Accrued interest
receivable
|
574
|
|
557
|
|
607
|
|
|
Goodwill
|
17,807
|
|
17,663
|
|
17,869
|
|
|
Intangible
assets
|
4,000
|
|
4,047
|
|
4,127
|
|
|
Other assets
(a)
|
21,074
|
|
22,308
|
|
20,490
|
|
|
Subtotal assets of
operations (a)
|
394,294
|
|
390,656
|
|
376,021
|
|
|
Assets of
consolidated investment management funds, at fair value:
|
|
|
|
|
Trading assets
(a)
|
2,012
|
|
1,496
|
|
8,678
|
|
|
Other assets
(a)
|
219
|
|
185
|
|
604
|
|
|
Subtotal assets of
consolidated investment management funds, at fair value
(a)
|
2,231
|
|
1,681
|
|
9,282
|
|
|
Total assets
(a)
|
$
|
396,525
|
|
$
|
392,337
|
|
$
|
385,303
|
|
|
Liabilities
|
|
|
|
|
Deposits:
|
|
|
|
|
Noninterest-bearing
(principally U.S. offices)
|
$
|
114,810
|
|
$
|
111,622
|
|
$
|
104,240
|
|
|
Interest-bearing
deposits in U.S. offices
|
58,312
|
|
60,624
|
|
53,236
|
|
|
Interest-bearing
deposits in Non-U.S. offices
|
112,579
|
|
109,013
|
|
108,393
|
|
|
Total
deposits
|
285,701
|
|
281,259
|
|
265,869
|
|
|
Federal funds
purchased and securities sold under repurchase
agreements
|
10,020
|
|
7,919
|
|
11,469
|
|
|
Trading
liabilities
|
5,418
|
|
7,342
|
|
7,434
|
|
|
Payables to customers
and broker-dealers
|
22,050
|
|
21,959
|
|
21,181
|
|
|
Commercial
paper
|
—
|
|
—
|
|
—
|
|
|
Other borrowed
funds
|
706
|
|
869
|
|
786
|
|
|
Accrued taxes and
other expenses
|
6,522
|
|
6,258
|
|
6,903
|
|
|
Other liabilities
(includes allowance for lending-related commitments of $95, $93 and
$89)
|
5,427
|
|
7,581
|
|
5,025
|
|
|
Long-term
debt
|
20,375
|
|
20,401
|
|
20,264
|
|
|
Subtotal liabilities
of operations
|
356,219
|
|
353,588
|
|
338,931
|
|
|
Liabilities of
consolidated investment management funds, at fair value:
|
|
|
|
|
Trading liabilities
(a)
|
770
|
|
264
|
|
7,660
|
|
|
Other liabilities
(a)
|
112
|
|
106
|
|
9
|
|
|
Subtotal liabilities
of consolidated investment management funds, at fair value
(a)
|
882
|
|
370
|
|
7,669
|
|
|
Total liabilities
(a)
|
357,101
|
|
353,958
|
|
346,600
|
|
|
Temporary
equity
|
|
|
|
|
Redeemable
noncontrolling interests
|
244
|
|
215
|
|
229
|
|
|
Permanent
equity
|
|
|
|
|
Preferred stock – par
value $0.01 per share; authorized 100,000,000 shares; issued
25,826, 15,826 and 15,826 shares
|
2,552
|
|
1,562
|
|
1,562
|
|
|
Common stock – par
value $0.01 per share; authorized 3,500,000,000 shares; issued
1,308,181,033, 1,303,799,499 and 1,290,222,821 shares
|
13
|
|
13
|
|
13
|
|
|
Additional paid-in
capital
|
25,078
|
|
24,887
|
|
24,626
|
|
|
Retained
earnings
|
18,895
|
|
18,257
|
|
17,683
|
|
|
Accumulated other
comprehensive loss, net of tax
|
(2,225)
|
|
(2,182)
|
|
(1,634)
|
|
|
Less: Treasury
stock of 201,663,375, 182,287,827 and 171,995,262 common shares, at
cost
|
(6,043)
|
|
(5,209)
|
|
(4,809)
|
|
|
Total The Bank of New
York Mellon Corporation shareholders' equity
|
38,270
|
|
37,328
|
|
37,441
|
|
|
Nonredeemable
noncontrolling interests of consolidated investment management
funds (a)
|
910
|
|
836
|
|
1,033
|
|
|
Total permanent equity
(a)
|
39,180
|
|
38,164
|
|
38,474
|
|
|
Total liabilities,
temporary equity and permanent equity (a)
|
$
|
396,525
|
|
$
|
392,337
|
|
$
|
385,303
|
|
|
(a) The first quarter of 2015 was restated to
reflect the retrospective application of adopting new accounting
guidance related to Consolidations (ASU 2015-02). See page 24
for additional information.
IMPACT OF ADOPTING NEW ACCOUNTING GUIDANCE
In 2Q15, BNY Mellon elected to early adopt the new accounting
guidance included in Accounting Standards Update ("ASU") 2015-02,
"Amendments to the Consolidation Analysis," an amendment to ASC
810, Consolidation, retroactively to Jan.
1, 2015. As a result, we restated the first quarter
2015 financial statements.
This ASU eliminated the indefinite deferral of ASU 2010-10
"Amendments for Certain Investment Funds" for asset management
funds with characteristics of an investment company and also
eliminated the presumption that a general partner should
consolidate a general partnership. Entities that comply with
or operate in accordance with the requirements that are similar to
those of Rule 2a-7 of the Investment Company Act of 1940 for
registered money market funds are excluded from the scope of the
ASU. This ASU also changed the consolidation analysis,
particularly when a reporting entity has fee arrangements that meet
certain requirements and related party relationships.
The table below presents the impact of this new accounting
guidance on our previously reported income statement.
Income statement
for quarter ended March 31, 2015 (unaudited)
|
As previously
reported
|
|
Adjustments
|
|
As revised
|
(in millions,
except per share amounts)
|
|
|
Fee and other
revenue
|
|
|
|
|
|
Investment management
and performance fees
|
$
|
854
|
|
|
$
|
13
|
|
|
$
|
867
|
|
Investment and other
income
|
63
|
|
|
(3)
|
|
|
60
|
|
Total fee
revenue
|
2,978
|
|
|
10
|
|
|
2,988
|
|
Total fee and other
revenue
|
3,002
|
|
|
10
|
|
|
3,012
|
|
Operations of
consolidated investment management funds
|
|
|
|
|
|
Investment
income
|
189
|
|
|
(133)
|
|
|
56
|
|
Interest of
investment management fund note holders
|
68
|
|
|
(64)
|
|
|
4
|
|
Income from
consolidated investment management funds
|
121
|
|
|
(69)
|
|
|
52
|
|
Income
|
|
|
|
|
|
Income before income
taxes
|
1,149
|
|
|
(59)
|
|
|
1,090
|
|
Net income
|
869
|
|
|
(59)
|
|
|
810
|
|
Net (income)
attributable to noncontrolling interests
|
(90)
|
|
|
59
|
|
|
(31)
|
|
Net income applicable
to common shareholders of The Bank of New York Mellon
Corporation
|
766
|
|
|
—
|
|
|
766
|
|
Diluted earnings per
share
|
0.67
|
|
|
—
|
|
|
0.67
|
|
The table below presents the impact of this new accounting
guidance on our previously reported balance sheet.
Balance sheet at
March 31, 2015 (unaudited)
|
As previously
reported
|
|
Adjustments
|
|
As revised
|
(in
millions)
|
|
|
Assets
|
|
|
|
|
|
Other
assets
|
$
|
22,315
|
|
|
$
|
(7)
|
|
|
$
|
22,308
|
|
Subtotal assets of
operations
|
390,663
|
|
|
(7)
|
|
|
390,656
|
|
Assets of
consolidated investment management funds, at fair value:
|
|
|
|
|
|
Trading
assets
|
7,852
|
|
|
(6,356)
|
|
|
1,496
|
|
Other
assets
|
573
|
|
|
(388)
|
|
|
185
|
|
Subtotal assets of
consolidated investment management funds, at fair value
|
8,425
|
|
|
(6,744)
|
|
|
1,681
|
|
Total
assets
|
399,088
|
|
|
(6,751)
|
|
|
392,337
|
|
Liabilities and
Equity
|
|
|
|
|
|
Liabilities of
consolidated investment management funds, at fair value:
|
|
|
|
|
|
Trading
liabilities
|
6,584
|
|
|
(6,320)
|
|
|
264
|
|
Other
liabilities
|
36
|
|
|
70
|
|
|
106
|
|
Subtotal liabilities
of consolidated investment management funds, at fair
value
|
6,620
|
|
|
(6,250)
|
|
|
370
|
|
Total
liabilities
|
360,208
|
|
|
(6,250)
|
|
|
353,958
|
|
Nonredeemable
noncontrolling interests of consolidated investment management
funds
|
1,337
|
|
|
(501)
|
|
|
836
|
|
Total permanent
equity
|
38,665
|
|
|
(501)
|
|
|
38,164
|
|
Total liabilities,
temporary equity and permanent equity
|
399,088
|
|
|
(6,751)
|
|
|
392,337
|
|
SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP
FINANCIAL MEASURES
BNY Mellon has included in this Earnings Release certain
Non-GAAP financial measures based on fully phased-in Basel III CET1
and other risk-based capital ratios, SLR and tangible common
shareholders' equity. BNY Mellon believes that the Basel III
CET1 and other risk-based capital ratios on a fully phased-in
basis, the SLR on a fully phased-in basis and the ratio of tangible
common shareholders' equity to tangible assets of operations are
measures of capital strength that provide additional useful
information to investors, supplementing the capital ratios which
are, or were, required by regulatory authorities. The
tangible common shareholders' equity ratio includes changes in
investment securities valuations which are reflected in total
shareholders' equity. In addition, this ratio is expressed as
a percentage of the actual book value of assets, as opposed to a
percentage of a risk-based reduced value established in accordance
with regulatory requirements, although BNY Mellon in its
reconciliation has excluded certain assets which are given a zero
percent risk-weighting for regulatory purposes and the assets of
consolidated investment management funds to which BNY Mellon has
limited economic exposure. Further, BNY Mellon believes that
the return on tangible common equity measure, which excludes
goodwill and intangible assets net of deferred tax liabilities, is
a useful additional measure for investors because it presents a
measure of those assets that can generate income. BNY Mellon
has provided a measure of tangible book value per share, which it
believes provides additional useful information as to the level of
tangible assets in relation to shares of common stock
outstanding.
BNY Mellon has presented revenue measures which exclude the
effect of noncontrolling interests related to consolidated
investment management funds, a gain on the sale of our investment
in Wing Hang Bank and a gain on the sale of the One Wall Street
building; and expense measures which exclude M&I expenses,
litigation charges, restructuring charges, amortization of
intangible assets and the charge related to investment management
funds, net of incentives. Earnings per share, return on
equity measures and operating margin measures, which exclude some
or all of these items, are also presented. Return on equity
measures also exclude the benefit primarily related to a tax
carryback claim. Operating margin measures may also exclude
amortization of intangible assets and the net negative impact of
money market fee waivers, net of distribution and servicing
expense. BNY Mellon believes that these measures are useful
to investors because they permit a focus on period-to-period
comparisons, which relate to the ability of BNY Mellon to enhance
revenues and limit expenses in circumstances where such matters are
within BNY Mellon's control. The excluded items, in general,
relate to certain charges as a result of prior transactions.
M&I expenses primarily relate to acquisitions and generally
continue for approximately three years after the transaction.
Litigation charges represent accruals for loss contingencies that
are both probable and reasonably estimable, but exclude standard
business-related legal fees. Restructuring charges relate to
our streamlining actions, Operational Excellence Initiatives and
migrating positions to Global Delivery Centers. Excluding
these charges mentioned above permits investors to view expenses on
a basis consistent with how management views the business.
The presentation of revenue growth on a constant currency basis
permits investors to assess the significance of changes in foreign
currency exchange rates. Growth rates on a constant currency
basis were determined by applying the current period foreign
currency exchange rates to the prior period revenue. BNY
Mellon believes that this presentation, as a supplement to GAAP
information, gives investors a clearer picture of the related
revenue results without the variability caused by fluctuations in
foreign currency exchange rates.
The presentation of income from consolidated investment
management funds, net of net income attributable to noncontrolling
interests related to the consolidation of certain investment
management funds permits investors to view revenue on a basis
consistent with how management views the business. BNY Mellon
believes that these presentations, as a supplement to GAAP
information, give investors a clearer picture of the results of its
primary businesses.
In this Earnings Release, the net interest margin is presented
on an FTE basis. We believe that this presentation provides
comparability of amounts arising from both taxable and tax-exempt
sources, and is consistent with industry practice. The
adjustment to an FTE basis has no impact on net income. Each
of these measures as described above is used by management to
monitor financial performance, both on a company-wide and on a
business-level basis.
The following table presents the reconciliation of the pre-tax
operating margin ratio.
Reconciliation of
income before income taxes – pre-tax operating
margin
|
|
|
|
|
|
|
|
(dollars in
millions)
|
2Q14
|
3Q14
|
4Q14
|
1Q15
|
|
2Q15
|
|
Income before income
taxes – GAAP
|
$
|
811
|
|
$
|
1,662
|
|
$
|
164
|
|
$
|
1,090
|
|
|
$
|
1,165
|
|
|
Less: Net
income attributable to noncontrolling interests of consolidated
investment management funds
|
17
|
|
23
|
|
24
|
|
31
|
|
|
37
|
|
|
Gain on the sale of
our investment in Wing Hang Bank
|
—
|
|
490
|
|
—
|
|
—
|
|
|
—
|
|
|
Gain on the sale of
the One Wall Street building
|
—
|
|
346
|
|
—
|
|
—
|
|
|
—
|
|
|
Add:
Amortization of intangible assets
|
75
|
|
75
|
|
73
|
|
66
|
|
|
65
|
|
|
M&I, litigation
and restructuring charges
|
122
|
|
220
|
|
800
|
|
(3)
|
|
|
59
|
|
|
Charge related to
investment management funds, net of incentives
|
109
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
Income before income
taxes, as adjusted – Non-GAAP (a)
|
$
|
1,100
|
|
$
|
1,098
|
|
$
|
1,013
|
|
$
|
1,122
|
|
|
$
|
1,252
|
|
|
|
|
|
|
|
|
|
|
Fee and other revenue
– GAAP
|
$
|
2,980
|
|
$
|
3,851
|
|
$
|
2,935
|
|
$
|
3,012
|
|
|
$
|
3,067
|
|
|
Income from
consolidated investment management funds – GAAP
|
46
|
|
39
|
|
42
|
|
52
|
|
|
40
|
|
|
Net interest revenue
– GAAP
|
719
|
|
721
|
|
712
|
|
728
|
|
|
779
|
|
|
Total revenue –
GAAP
|
3,745
|
|
4,611
|
|
3,689
|
|
3,792
|
|
|
3,886
|
|
|
Less: Net
income attributable to noncontrolling interests of consolidated
investment management funds
|
17
|
|
23
|
|
24
|
|
31
|
|
|
37
|
|
|
Gain on the sale of
our investment in Wing Hang Bank
|
—
|
|
490
|
|
—
|
|
—
|
|
|
—
|
|
|
Gain on the sale of
the One Wall Street building
|
—
|
|
346
|
|
—
|
|
—
|
|
|
—
|
|
|
Total revenue, as
adjusted – Non-GAAP (a)
|
$
|
3,728
|
|
$
|
3,752
|
|
$
|
3,665
|
|
$
|
3,761
|
|
|
$
|
3,849
|
|
|
|
|
|
|
|
|
|
|
Pre-tax operating
margin (b)
|
22
|
%
|
36
|
%
|
4
|
%
|
29
|
%
|
(c)
|
30
|
%
|
(c)
|
Pre-tax operating
margin – Non-GAAP (a)(b)
|
30
|
%
|
29
|
%
|
28
|
%
|
30
|
%
|
(c)
|
33
|
%
|
(c)
|
(a) Non-GAAP excludes net income attributable to
noncontrolling interests of consolidated investment management
funds, the gains on the sales of our investment in Wing Hang Bank
and the One Wall Street building, amortization of intangible
assets, M&I, litigation and restructuring charges, and a charge
related to investment management funds, net of incentives, if
applicable.
(b) Income before taxes divided by total
revenue.
(c) Our GAAP earnings include
tax-advantaged investments such as low income housing, renewable
energy, bank-owned life insurance and tax-exempt securities.
The benefits of these investments are primarily reflected in tax
expense. If reported on a tax-equivalent basis these
investments would increase revenue and income before taxes by
$64 million and $52 million for 1Q15 and 2Q15 and would increase
our pre-tax operating margin by approximately 1.2% and 0.9%,
respectively.
The following table presents the reconciliation of the returns
on common equity and tangible common equity.
Return on common
equity and tangible common equity
|
|
|
|
|
|
(dollars in
millions)
|
2Q14
|
3Q14
|
4Q14
|
1Q15
|
2Q15
|
Net income applicable
to common shareholders of The Bank of New York Mellon Corporation –
GAAP
|
$
|
554
|
|
$
|
1,070
|
|
$
|
209
|
|
$
|
766
|
|
$
|
830
|
|
Add:
Amortization of intangible assets, net of tax
|
49
|
|
49
|
|
47
|
|
43
|
|
44
|
|
Net income applicable
to common shareholders of The Bank of New York
Mellon Corporation excluding amortization of intangible assets –
Non-GAAP
|
603
|
|
1,119
|
|
256
|
|
809
|
|
874
|
|
Less: Gain on
the sale of our investment in Wing Hang Bank
|
—
|
|
315
|
|
—
|
|
—
|
|
—
|
|
Gain on the sale of
the One Wall Street building
|
—
|
|
204
|
|
—
|
|
—
|
|
—
|
|
Benefit primarily
related to a tax carryback claim
|
—
|
|
—
|
|
150
|
|
—
|
|
—
|
|
Add: M&I,
litigation and restructuring charges
|
76
|
|
183
|
|
608
|
|
(2)
|
|
38
|
|
Charge related to
investment management funds, net of incentives
|
85
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Net income applicable
to common shareholders of The Bank of New York Mellon Corporation,
as adjusted – Non-GAAP (a)
|
$
|
764
|
|
$
|
783
|
|
$
|
714
|
|
$
|
807
|
|
$
|
912
|
|
|
|
|
|
|
|
Average common
shareholders' equity
|
$
|
36,565
|
|
$
|
36,751
|
|
$
|
36,859
|
|
$
|
35,486
|
|
$
|
35,516
|
|
Less: Average
goodwill
|
18,149
|
|
18,109
|
|
17,924
|
|
17,756
|
|
17,752
|
|
Average intangible
assets
|
4,354
|
|
4,274
|
|
4,174
|
|
4,088
|
|
4,031
|
|
Add: Deferred
tax liability – tax deductible goodwill (b)
|
1,338
|
|
1,317
|
|
1,340
|
|
1,362
|
|
1,351
|
|
Deferred tax liability
– intangible assets (b)
|
1,247
|
|
1,230
|
|
1,216
|
|
1,200
|
|
1,179
|
|
Average tangible
common shareholders' equity – Non-GAAP
|
$
|
16,647
|
|
$
|
16,915
|
|
$
|
17,317
|
|
$
|
16,204
|
|
$
|
16,263
|
|
|
|
|
|
|
|
Return on common
equity – GAAP (c)
|
6.1
|
%
|
11.6
|
%
|
2.2
|
%
|
8.8
|
%
|
9.4
|
%
|
Return on common
equity – Non-GAAP (a)(c)
|
8.4
|
%
|
8.5
|
%
|
7.7
|
%
|
9.2
|
%
|
10.3
|
%
|
|
|
|
|
|
|
Return on tangible
common equity – Non-GAAP (a)(c)
|
14.5
|
%
|
26.2
|
%
|
5.9
|
%
|
20.3
|
%
|
21.5
|
%
|
Return on tangible
common equity – Non-GAAP adjusted (a)(c)
|
18.4
|
%
|
18.4
|
%
|
16.3
|
%
|
20.2
|
%
|
22.5
|
%
|
(a) Non-GAAP excludes amortization of intangible
assets, the gains on the sales of our investment in Wing Hang Bank
and the One Wall Street building, the benefit primarily related to
a tax carryback claim, M&I, litigation and restructuring
charges, and a charge related to investment management funds, net
of incentives, if applicable.
(b) Deferred tax liabilities are based on fully
phased-in Basel III rules.
(c) Annualized.
The following table presents the reconciliation of the equity to
assets ratio and book value per common share.
Equity to assets
and book value per common share
|
June 30,
2014
|
|
Sept. 30,
2014
|
|
Dec. 31,
2014
|
|
March 31,
2015
|
|
June 30,
2015
|
|
(dollars in
millions, unless otherwise noted)
|
BNY Mellon
shareholders' equity at period end – GAAP
|
$
|
38,326
|
|
$
|
38,451
|
|
$
|
37,441
|
|
$
|
37,328
|
|
$
|
38,270
|
|
Less: Preferred
stock
|
1,562
|
|
1,562
|
|
1,562
|
|
1,562
|
|
2,552
|
|
BNY Mellon common
shareholders' equity at period end – GAAP
|
36,764
|
|
36,889
|
|
35,879
|
|
35,766
|
|
35,718
|
|
Less:
Goodwill
|
18,196
|
|
17,992
|
|
17,869
|
|
17,663
|
|
17,807
|
|
Intangible
assets
|
4,314
|
|
4,215
|
|
4,127
|
|
4,047
|
|
4,000
|
|
Add: Deferred
tax liability – tax deductible goodwill (a)
|
1,338
|
|
1,317
|
|
1,340
|
|
1,362
|
|
1,351
|
|
Deferred tax liability
– intangible assets (a)
|
1,247
|
|
1,230
|
|
1,216
|
|
1,200
|
|
1,179
|
|
BNY Mellon tangible
common shareholders' equity at period end – Non-GAAP
|
$
|
16,839
|
|
$
|
17,229
|
|
$
|
16,439
|
|
$
|
16,618
|
|
$
|
16,441
|
|
|
|
|
|
|
|
Total assets at
period end – GAAP
|
$
|
400,740
|
|
$
|
386,296
|
|
$
|
385,303
|
|
$
|
392,337
|
|
$
|
396,525
|
|
Less: Assets of
consolidated investment management funds
|
10,428
|
|
9,562
|
|
9,282
|
|
1,681
|
|
2,231
|
|
Subtotal assets of
operations – Non-GAAP
|
390,312
|
|
376,734
|
|
376,021
|
|
390,656
|
|
394,294
|
|
Less:
Goodwill
|
18,196
|
|
17,992
|
|
17,869
|
|
17,663
|
|
17,807
|
|
Intangible
assets
|
4,314
|
|
4,215
|
|
4,127
|
|
4,047
|
|
4,000
|
|
Cash on deposit with
the Federal Reserve and other central banks (b)
|
104,916
|
|
90,978
|
|
99,901
|
|
93,044
|
|
107,899
|
|
Tangible total assets
of operations at period end –
Non-GAAP
|
$
|
262,886
|
|
$
|
263,549
|
|
$
|
254,124
|
|
$
|
275,902
|
|
$
|
264,588
|
|
|
|
|
|
|
|
BNY Mellon
shareholders' equity to total assets ratio – GAAP
|
9.6
|
%
|
10.0
|
%
|
9.7
|
%
|
9.5
|
%
|
9.7
|
%
|
BNY Mellon common
shareholders' equity to total assets ratio – GAAP
|
9.2
|
%
|
9.5
|
%
|
9.3
|
%
|
9.1
|
%
|
9.0
|
%
|
BNY Mellon tangible
common shareholders' equity to tangible assets of operations ratio
– Non-GAAP
|
6.4
|
%
|
6.5
|
%
|
6.5
|
%
|
6.0
|
%
|
6.2
|
%
|
|
|
|
|
|
|
Period-end common
shares outstanding (in thousands)
|
1,131,596
|
|
1,125,710
|
|
1,118,228
|
|
1,121,512
|
|
1,106,518
|
|
|
|
|
|
|
|
Book value per common
share – GAAP
|
$
|
32.49
|
|
$
|
32.77
|
|
$
|
32.09
|
|
$
|
31.89
|
|
$
|
32.28
|
|
Tangible book value
per common share – Non-GAAP
|
$
|
14.88
|
|
$
|
15.30
|
|
$
|
14.70
|
|
$
|
14.82
|
|
$
|
14.86
|
|
(a) Deferred tax liabilities are based on fully
phased-in Basel III rules.
(b) Assigned a zero percent risk-weighting by the
regulators.
The following table presents income from consolidated investment
management funds, net of noncontrolling interests.
Income from
consolidated investment management funds, net of noncontrolling
interests
|
|
|
(in
millions)
|
2Q14
|
3Q14
|
4Q14
|
1Q15
|
2Q15
|
Income from
consolidated investment management funds
|
$
|
46
|
|
$
|
39
|
|
$
|
42
|
|
$
|
52
|
|
$
|
40
|
|
Less: Net
income attributable to noncontrolling interests of consolidated
investment management funds
|
17
|
|
23
|
|
24
|
|
31
|
|
37
|
|
Income from
consolidated investment management funds, net of noncontrolling
interests
|
$
|
29
|
|
$
|
16
|
|
$
|
18
|
|
$
|
21
|
|
$
|
3
|
|
The following table presents the impact of changes in foreign
currency exchange rates on our consolidated investment management
and performance fees.
Investment
management and performance fees - Consolidated
|
|
|
2Q15
vs.
|
(dollars in
millions)
|
2Q14
|
|
2Q15
|
|
2Q14
|
Investment management
and performance fees - GAAP
|
$
|
883
|
|
$
|
878
|
|
(1)
|
%
|
Impact of changes in
foreign currency exchange rates
|
(45)
|
|
—
|
|
|
Investment management
and performance fees, as adjusted - Non-GAAP
|
$
|
838
|
|
$
|
878
|
|
5
|
%
|
The following table presents the revenue line items in the
Investment Management business impacted by the consolidated
investment management funds.
Income from
consolidated investment management funds, net of noncontrolling
interests - Investment Management business
|
|
|
|
|
|
(in
millions)
|
2Q14
|
3Q14
|
4Q14
|
1Q15
|
2Q15
|
Investment management
fees
|
$
|
18
|
|
$
|
15
|
|
$
|
15
|
|
$
|
1
|
|
$
|
4
|
|
Other (Investment
income)
|
11
|
|
1
|
|
3
|
|
20
|
|
(1)
|
|
Income from
consolidated investment management funds, net of noncontrolling
interests
|
$
|
29
|
|
$
|
16
|
|
$
|
18
|
|
$
|
21
|
|
$
|
3
|
|
The following table presents the impact of changes in foreign
currency exchange rates on investment management fees reported in
the Investment Management segment.
Investment
management fees - Investment Management business
|
|
|
2Q15
vs.
|
(dollars in
millions)
|
2Q14
|
|
2Q15
|
|
2Q14
|
Investment management
fees – GAAP
|
$
|
852
|
|
$
|
844
|
|
(1)
|
%
|
Impact of changes in
foreign currency exchange rates
|
(45)
|
|
—
|
|
|
Investment management
fees, as adjusted – Non-GAAP
|
$
|
807
|
|
$
|
844
|
|
5
|
%
|
The following table presents the reconciliation of the pre-tax
operating margin for the Investment Management business.
Pre-tax operating
margin - Investment Management business
|
|
|
|
|
|
(dollars in
millions)
|
2Q14
|
3Q14
|
4Q14
|
1Q15
|
2Q15
|
Income before income
taxes – GAAP
|
$
|
171
|
|
$
|
245
|
|
$
|
239
|
|
$
|
264
|
|
$
|
265
|
|
Add:
Amortization of intangible assets
|
31
|
|
31
|
|
30
|
|
25
|
|
25
|
|
Money market fee
waivers
|
28
|
|
29
|
|
34
|
|
34
|
|
29
|
|
Charge related to
investment management funds, net of incentives
|
109
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Income before income
taxes excluding amortization of intangible assets, money
market fee waivers and the charge related to investment management
funds,
net of incentives – Non-GAAP
|
$
|
339
|
|
$
|
305
|
|
$
|
303
|
|
$
|
323
|
|
$
|
319
|
|
|
|
|
|
|
|
Total revenue –
GAAP
|
$
|
1,036
|
|
$
|
1,003
|
|
$
|
998
|
|
$
|
1,010
|
|
$
|
1,004
|
|
Less:
Distribution and servicing expense
|
111
|
|
105
|
|
102
|
|
97
|
|
95
|
|
Money market fee
waivers benefiting distribution and servicing expense
|
37
|
|
38
|
|
36
|
|
38
|
|
37
|
|
Add: Money
market fee waivers impacting total revenue
|
65
|
|
67
|
|
70
|
|
72
|
|
66
|
|
Total revenue net of
distribution and servicing expense
and excluding money
market fee waivers – Non-GAAP
|
$
|
953
|
|
$
|
927
|
|
$
|
930
|
|
$
|
947
|
|
$
|
938
|
|
|
|
|
|
|
|
Pre-tax operating
margin (a)
|
16
|
%
|
24
|
%
|
24
|
%
|
26
|
%
|
26
|
%
|
Pre-tax operating
margin excluding amortization of intangible assets, money
market
fee waivers, the charge related to investment management funds, net
of incentives
and net of distribution and servicing expense – Non-GAAP
(a)
|
36
|
%
|
33
|
%
|
32
|
%
|
34
|
%
|
34
|
%
|
(a) Income before taxes divided by total
revenue.
DIVIDENDS
Common – On July 21, 2015, The Bank of New York
Mellon Corporation declared a quarterly common stock dividend of
$0.17 per common share. This
cash dividend is payable on Aug. 13,
2015 to shareholders of record as of the close of business
on Aug. 3, 2015.
Preferred – On July 21, 2015, The Bank of New York
Mellon Corporation also declared the following dividends for the
noncumulative perpetual preferred stock, liquidation preference
$100,000 per share, for the dividend
period ending in Sept. 2015, in each
case payable on Sept. 21, 2015 to
holders of record as of the close of business on Sept. 5, 2015:
- $1,011.11 per share on the Series
A Preferred Stock (equivalent to $10.1111 per Normal Preferred Capital Security of
Mellon Capital IV, each representing 1/100th interest in a share of
Series A Preferred Stock); and
- $1,300.00 per share on the Series
C Preferred Stock (equivalent to $0.3250 per depositary share, each representing a
1/4,000th interest in a share of the Series C Preferred
Stock).
BNY Mellon is a global investments company dedicated to helping
its clients manage and service their financial assets throughout
the investment lifecycle. Whether providing financial
services for institutions, corporations or individual investors,
BNY Mellon delivers informed investment management and investment
services in 35 countries and more than 100 markets. As of
June 30, 2015, BNY Mellon had
$28.6 trillion in assets under
custody and/or administration, and $1.7
trillion in assets under management. BNY Mellon can
act as a single point of contact for clients looking to create,
trade, hold, manage, service, distribute or restructure
investments. BNY Mellon is the corporate brand of The Bank of
New York Mellon Corporation (NYSE: BK). Additional
information is available on www.bnymellon.com. Follow us on
Twitter @BNYMellon or visit our newsroom at
www.bnymellon.com/newsroom for the latest company news.
CAUTIONARY STATEMENT
A number of statements (i) in this Earnings Release, (ii) in our
presentations and (iii) in the responses to questions on our
conference call discussing our quarterly results and other public
events may contain "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995 including
our estimated capital ratios and expectations relating to those
ratios, preliminary business metrics and statements regarding our
capital plans; strategic priorities; initiatives in Investment
Services and Investment Management; and our business improvement
process. These statements may be expressed in a variety of
ways, including the use of future or present tense language.
Words such as "estimate", "forecast", "project", "anticipate",
"target", "expect", "intend", "continue", "seek", "believe",
"plan", "goal", "could", "should", "may", "will", "strategy",
"opportunities", "trends" and words of similar meaning signify
forward-looking statements. These statements and other
forward-looking statements contained in other public disclosures of
The Bank of New York Mellon Corporation which make reference to the
cautionary factors described in this Earnings Release are based
upon current beliefs and expectations and are subject to
significant risks and uncertainties (some of which are beyond BNY
Mellon's control). Actual results may differ materially from
those expressed or implied as a result of these risks and
uncertainties, including, but not limited to, the risk factors and
other uncertainties set forth in BNY Mellon's Annual Report on Form
10-K for the year ended Dec. 31, 2014
and BNY Mellon's other filings with the Securities and Exchange
Commission. All forward-looking statements in this Earnings
Release speak only as of July 21, 2015, and BNY Mellon
undertakes no obligation to update any forward-looking statement to
reflect events or circumstances after that date or to reflect the
occurrence of unanticipated events.
Contacts:
MEDIA:
Kevin Heine
(212)
635-1590
kevin.heine@bnymellon.com
ANALYSTS:
Valerie Haertel
(212) 635-8529
valerie.haertel@bnymellon.com
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/bny-mellon-reports-second-quarter-earnings-of-830-million-or-073-per-common-share-including-300116147.html
SOURCE The Bank of New York Mellon Corporation