The Bank of New York Mellon (NYSE:BK) FY Conference Transcript

Summary of BNY Mellon FY Conference Call - September 09, 2025 Company Overview - Company: The Bank of New York Mellon (NYSE: BK) - Key Speaker: Dermot McDonogh, Chief Financial Officer Core Industry Insights - Market Performance: BNY Mellon has been recognized as one of the best-performing large-cap bank stocks since the current CEO, Robin Vince, took over, attributed to improved management and strategic direction [1][2][3] - Cultural Shift: The company is evolving its culture to be high-performing and human-centric, focusing on dismantling silos and enhancing market credibility [3][4] Strategic Business Model Changes - Commercial Model: Introduction of a unified sales approach across three segments, leading to record sales in the first two quarters of the year [4][5] - Platform Operating Model: Transitioning to a platform infrastructure that enhances efficiency and reduces costs, with a focus on integrating services across different business lines [7][9] Financial Performance and Targets - Financial Targets: The company aims for mid-30s margins and mid-20s Return on Tangible Common Equity (ROTCE) [16][54] - Organic Growth: Recent organic growth was reported at approximately 3%, with expectations for improvement as Investment and Wealth Management (IWM) performance enhances [18][22] Growth Opportunities - Business Segments: All segments, including Security Services, Corporate Trust, and Asset Servicing, show potential for growth, with Corporate Trust being highlighted for its underinvestment and high-margin opportunities [13][14][15] - AI Integration: BNY Mellon is actively training employees on AI, with 97% of staff trained, aiming to leverage AI for operational efficiency and enhanced client service [10][11][12] M&A and Market Position - M&A Strategy: The company is open to acquisitions that enhance capabilities, with a focus on internal growth first. Recent acquisition of Archer is noted as a successful addition [24][25] - Digital Assets: BNY Mellon is exploring opportunities in digital assets and stablecoins, although current revenue impact is minimal [58][60] Operating Environment - Market Dynamics: The firm has adapted to a constantly changing financial services environment, managing various macroeconomic events effectively [28][29] - NII and Fee Growth: Guidance for Net Interest Income (NII) remains positive, with expectations for high single-digit growth, supported by a diversified business model [33][41] Expense Management - Expense Outlook: The company has adjusted its expense guidance to reflect a 3% increase for the full year, focusing on efficiency and positive operating leverage [44][46] Conclusion - Future Outlook: BNY Mellon is positioned for continued growth through strategic execution, enhanced client relationships, and leveraging technology, particularly AI, to improve operational efficiency and client service [68][69]