The Bank of New York Mellon(US:BK)2024-10-11 19:48Financial Data and Key Metrics Changes - BNY reported earnings per share of $1.50, up 22% year-over-year, and $1.52 excluding notable items, up 20% [8][18] - Total revenue of $4.6 billion increased by 5% year-over-year, with reported expenses flat at $3.1 billion [8][18] - Pre-tax margin improved to 33%, and return on tangible common equity rose to 23% [8][18] Business Line Data and Key Metrics Changes - Security Services revenue was $2.2 billion, up 6% year-over-year, with investment services fees up 4% [20][21] - Market and Wealth Services reported revenue of $1.5 billion, up 7% year-over-year, with investment services fees also up 7% [23] - Investment and Wealth Management revenue was $849 million, up 2% year-over-year, with assets under management increasing by 18% to $2.1 trillion [27][28] Market Data and Key Metrics Changes - Firm-wide assets under custody and/or administration reached $52.1 trillion, up 14% year-over-year [16][18] - Foreign exchange revenue increased by 14%, driven by higher volumes [17] - Net interest income rose by 3% year-over-year, reflecting improved yields and balance sheet growth [19] Company Strategy and Development Direction - The company is focused on enhancing its client coverage model and operational efficiency through a platform operating model [12][14] - BNY announced the acquisition of Archer, aimed at expanding its managed account solutions and enhancing asset servicing capabilities [10][68] - The company is leveraging its position in the growing alternatives market and has introduced Alts Bridge to facilitate investments in alternatives [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged risks and uncertainties in the macroeconomic environment, including geopolitical tensions and regulatory impacts [7] - The company remains optimistic about its growth trajectory, expecting to return 100% or more of 2024 earnings to shareholders through dividends and buybacks [30][71] - Management emphasized the importance of a multi-faceted strategy to capitalize on market growth and client needs [42][44] Other Important Information - The company reported a consolidated liquidity coverage ratio of 116% and a net stable funding ratio of 132% [19] - BNY's liquidity ecosystem reached an all-time high of over $1.5 trillion [20][64] Q&A Session Summary Question: ETF wins and revenue dynamics - Management noted that the strong ETF growth is part of a broader market trend and revenue from new clients is ramping up gradually [34][36] Question: Deposit beta and growth expectations - Management indicated that the first rate cut was fully passed on, and it is too early to predict deposit growth trends [38] Question: Client growth and revenue generation - Management highlighted that growth is driven by a combination of market conditions and deliberate strategies to enhance client relationships [40][42] Question: Revenue sensitivity to market changes - Management confirmed that a 5% change in equity or fixed income markets would impact revenue by approximately $60 million and $40 million respectively [52][72] Question: Future acquisition outlook - Management expressed a focus on improving existing businesses while remaining open to opportunistic acquisitions that align with strategic goals [69][70]