BNY Mellon publishes first half results
July 17, 2019

The Bank of New York Mellon has today published its results for the first six months of the year.

It highlights the following as key drivers (comparisons are second quarter 2019 versus second quarter 2018, unless otherwise stated.

Total revenue decreased 5 percent.

Fee revenue decreased 3 percent primarily reflecting cumulative assets under management (AUM) outflows since 2Q18, the unfavourable impact of a stronger US dollar and lower foreign exchange and securities lending revenue, partially offset by higher fees in Issuer Services, growth in clearance volumes and collateral management, as well as higher client assets and volumes in Pershing.

Net interest revenue decreased 12 percent. The higher yield on interest-earning assets was more than offset by higher deposit and funding costs, lower noninterest-bearing deposits and loan balances and the impact of hedging activities.

Provision for credit losses was a credit of US$8 million and driven by lower credit exposure.

Noninterest expense decreased 4 percent. Over 1 percent of the decrease was driven by the favourable impact of a stronger US dollar. The remaining decrease primarily reflects lower staff expense and decreases in most other expense categories, partially offset by continued investments in technology.

Effective tax rate of 20.5 percent.

Assets under custody and/or administration (AUC/A) and assets under management (AUM)

AUC/A of $35.5 trillion increased 6 percent, primarily reflecting higher market values and net new business, partially offset by the unfavourable impact of a stronger US dollar.

AUM of $1.8 trillion, increased 2 percent, primarily reflecting higher market values, partially offset by the unfavourable impact of a stronger US dollar (principally versus the British pound) and net outflows.

Charlie Scharf, Chairman and Chief Executive Officer, said: "The impact of the level and shape of the yield curve, as well as continued low levels of volatility and muted market activity, negatively impacted our results.

"This was partially offset by a decline in expenses as we continue to manage the company prudently – even more so, given the current environment. Market conditions drove a decline in foreign exchange and securities lending activities within Asset Servicing while prior year outflows and divestitures negatively impacted Asset Management.

"However, we saw fee growth in Issuer Services, Clearance and Collateral Management and Pershing."

"Our results this quarter also reflect our ongoing increased level of technology and product development investments, but these increases were more than offset by improved efficiency across the company.

"We remain committed to these investments to build the business for the future, and are confident that our ability to drive efficiency will offset these investments for at least the next couple of quarters.

"While this is a difficult operating environment to grow our business, the strength of our franchise allows us to continue our commitment to return significant amounts of capital to shareholders while maintaining strong capital ratios.

We are pleased that we will be able to return capital to shareholders through up to $3.94 billion in common share repurchases by mid-2020, an increase of roughly 20 percent, and an increase in our common dividend by 11 percent to 31 cents per share starting in the third quarter."





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The Bank of New York Mellon has today published its results for the first six months of the year.

It highlights the following as key drivers (comparisons are second quarter 2019 versus second quarter 2018, unless otherwise stated.

Total revenue decreased 5 percent.

Fee revenue decreased 3 percent primarily reflecting cumulative assets under management (AUM) outflows since 2Q18, the unfavourable impact of a stronger US dollar and lower foreign exchange and securities lending revenue, partially offset by higher fees in Issuer Services, growth in clearance volumes and collateral management, as well as higher client assets and volumes in Pershing.

Net interest revenue decreased 12 percent. The higher yield on interest-earning assets was more than offset by higher deposit and funding costs, lower noninterest-bearing deposits and loan balances and the impact of hedging activities.

Provision for credit losses was a credit of US$8 million and driven by lower credit exposure.

Noninterest expense decreased 4 percent. Over 1 percent of the decrease was driven by the favourable impact of a stronger US dollar. The remaining decrease primarily reflects lower staff expense and decreases in most other expense categories, partially offset by continued investments in technology.

Effective tax rate of 20.5 percent.

Assets under custody and/or administration (AUC/A) and assets under management (AUM)

AUC/A of $35.5 trillion increased 6 percent, primarily reflecting higher market values and net new business, partially offset by the unfavourable impact of a stronger US dollar.

AUM of $1.8 trillion, increased 2 percent, primarily reflecting higher market values, partially offset by the unfavourable impact of a stronger US dollar (principally versus the British pound) and net outflows.

Charlie Scharf, Chairman and Chief Executive Officer, said: "The impact of the level and shape of the yield curve, as well as continued low levels of volatility and muted market activity, negatively impacted our results.

"This was partially offset by a decline in expenses as we continue to manage the company prudently – even more so, given the current environment. Market conditions drove a decline in foreign exchange and securities lending activities within Asset Servicing while prior year outflows and divestitures negatively impacted Asset Management.

"However, we saw fee growth in Issuer Services, Clearance and Collateral Management and Pershing."

"Our results this quarter also reflect our ongoing increased level of technology and product development investments, but these increases were more than offset by improved efficiency across the company.

"We remain committed to these investments to build the business for the future, and are confident that our ability to drive efficiency will offset these investments for at least the next couple of quarters.

"While this is a difficult operating environment to grow our business, the strength of our franchise allows us to continue our commitment to return significant amounts of capital to shareholders while maintaining strong capital ratios.

We are pleased that we will be able to return capital to shareholders through up to $3.94 billion in common share repurchases by mid-2020, an increase of roughly 20 percent, and an increase in our common dividend by 11 percent to 31 cents per share starting in the third quarter."



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