Bank of New York Mellon Corp 8-K, filed Jul 15, 2020

Bank of New York Mellon Corp (BNY)

8-K 2020-07-15 For: 2020-07-15

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Added on April 09, 2026

About this 8-K

Bank of New York Mellon Corp filed this 8-K on July 15, 2020.

Items reported

Item 2.02: Financial results
Item 7.01: Regulation FD disclosure
Item 9.01: Financial statements and exhibits

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Delaware	001-35651	13-2614959
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)



Securities registered pursuant to Section 12(b) of the Act: Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	BK	New York Stock Exchange
Depositary Shares, each representing 1/4,000th of a share of Series C Noncumulative Perpetual Preferred Stock	BK PrC	New York Stock Exchange
6.244% Fixed-to-Floating Rate Normal Preferred Capital Securities of Mellon Capital IV	BK/P	New York Stock Exchange
(fully and unconditionally guaranteed by The Bank of New York Mellon Corporation)



Exhibit
Number			Description

99.1			The Bank of New York Mellon Corporation Earnings Release dated July 15, 2020, announcing financial results for the second quarter of 2020.
			The quotation in Exhibit 99.1 (the “Excluded Section”) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (“Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of BNY Mellon under the Securities Act of 1933 or the Exchange Act. The information included in Exhibit 99.1, other than in the Excluded Section, shall be deemed “filed” for purposes of the Exchange Act.

99.2			The Bank of New York Mellon Corporation Financial Supplement dated July 15, 2020, for the second quarter of 2020.
			The information included in Exhibit 99.2 shall be deemed “filed” for purposes of the Exchange Act.

99.3			Second Quarter 2020 Financial Highlights Presentation dated July 15, 2020.
			The information included in Exhibit 99.3 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of BNY Mellon under the Securities Act of 1933 or the Exchange Act.

104			Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.



	The Bank of New York Mellon Corporation (Registrant)
Date: July 15, 2020	By: /s/ James J. Killerlane III
	Name: James J. Killerlane III Title: Secretary



Revenue up 2%	EPS flat	ROE 9% ROTCE 19% (a)	CET1 12.6% Tier 1 leverage 6.2%



							2Q20 vs.
	2Q20		1Q20		2Q19		1Q20		2Q19
Net income applicable to common shareholders (in millions)	$	901	$	944	$	969	(5	)%	(7	)%
Diluted earnings per common share	$	1.01	$	1.05	$	1.01	(4	)%	—	%


•	Tier 1 capital increased $2.55 billion, including issuance of $1 billion of preferred stock



Media Relations: Jennifer Hendricks Sullivan (212) 635-1374	Investor Relations: Magda Palczynska (212) 635-8529
(a) For information on this Non-GAAP measure, see “Supplemental Information – Explanation of GAAP and Non-GAAP financial measures” on page 8.
Note: Above comparisons are 2Q20 vs. 2Q19.



(in millions, except per share amounts and unless otherwise noted; not meaningful - N/M)										2Q20 vs.
	2Q20			1Q20			2Q19			1Q20		2Q19
Fee revenue	$	3,167		$	3,323		$	3,105		(5	)%	2	%
Net securities gains	9			9			7			N/M		N/M
Total fee and other revenue	3,176			3,332			3,112			(5	)	2
Income (loss) from consolidated investment management funds	54			(38		)	10			N/M		N/M
Net interest revenue	780			814			802			(4	)	(3	)
Total revenue	4,010			4,108			3,924			(2	)	2
Provision for credit losses	143			169			(8		)	N/M		N/M
Noninterest expense	2,686			2,712			2,647			(1	)	1
Income before income taxes	1,181			1,227			1,285			(4	)	(8	)
Provision for income taxes	216			265			264			(18	)	(18	)
Net income	$	965		$	962		$	1,021		—		(5	)%
Net income applicable to common shareholders of The Bank of New York Mellon Corporation	$	901		$	944		$	969		(5	)%	(7	)%
Operating leverage (a)										(143	) bps	72	bps
Diluted earnings per common share	$	1.01		$	1.05		$	1.01		(4	)%	—
Average common shares and equivalents outstanding - diluted (in thousands)	890,561			896,689			953,928
Pre-tax operating margin	29		%	30		%	33		%


(a)	Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense.


•	Fee revenue increased 2% primarily reflecting higher fees in Pershing and Asset Servicing, partially offset by money market fee waivers, lower investment management fees and the unfavorable impact of a stronger U.S. dollar.


•	Net interest revenue decreased 3% primarily reflecting lower interest rates on interest-earning assets, partially offset by the benefit of lower deposit and funding rates and higher deposits, securities portfolio and loans.


•	Provision for credit losses of $143 million primarily reflecting increased downgrades and the continuation of the challenging macroeconomic outlook.


•	Noninterest expense increased 1% primarily reflecting the continued investments in technology and higher staff and pension expenses, partially offset by lower business development (travel and marketing) expense and the favorable impact of a stronger U.S. dollar.


•	AUC/A of $37.3 trillion, increased 5%, primarily reflecting higher client inflows, market values and net new business, partially offset by the unfavorable impact of a stronger U.S. dollar.



News Release


•	Effective tax rate of 18.3%.


•	Paid $278 million in dividends to common shareholders.


•	Return on common equity (“ROE”) of 9%; Return on tangible common equity (“ROTCE”) of 19% (a).


•	AUM of $2.0 trillion, increased 6%, primarily reflecting higher market values and net inflows, partially offset by the unfavorable impact of a stronger U.S. dollar (principally versus the British pound).


•	Open market share repurchases temporarily suspended for 2Q20 and 3Q20.


•	Total Loss Absorbing Capacity (“TLAC”) ratios exceed minimum requirements.


(a)	See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 8 for additional information.


(b)	See “Capital and Liquidity” on page 6 for additional information.



(dollars in millions, unless otherwise noted; not meaningful - N/M)										2Q20 vs.
	2Q20			1Q20			2Q19			1Q20		2Q19
Total revenue by line of business:
Asset Servicing	$	1,463		$	1,531		$	1,397		(4	)%	5	%
Pershing	578			653			572			(11	)	1
Issuer Services	431			419			446			3		(3	)
Treasury Services	340			339			317			—		7
Clearance and Collateral Management	295			300			284			(2	)	4
Total revenue by line of business	3,107			3,242			3,016			(4	)	3
Provision for credit losses	145			149			(4		)	N/M		N/M
Noninterest expense	1,989			1,987			1,963			—		1
Income before taxes	$	973		$	1,106		$	1,057		(12	)%	(8	)%

Pre-tax operating margin	31		%	34		%	35		%

Foreign exchange and other trading revenue	$	178		$	261		$	153		(32	)%	16	%
Securities lending revenue	$	51		$	46		$	40		11	%	28	%

Metrics:
Average loans	$	43,113		$	41,789		$	36,404		3	%	18	%
Average deposits	$	268,467		$	242,187		$	201,146		11	%	33	%

AUC/A at period end (in trillions) (current period is preliminary) (a)	$	37.3		$	35.2		$	35.5		6	%	5	%
Market value of securities on loan at period end (in billions) (b)	$	384		$	389		$	369		(1	)%	4	%


(a)	Includes the AUC/A of CIBC Mellon Global Securities Services Company (“CIBC Mellon”), a joint venture with the Canadian Imperial Bank of Commerce, of $1.3 trillion at June 30, 2020, $1.2 trillion at March 31, 2020 and $1.4 trillion at June 30, 2019.


(b)	Represents the total amount of securities on loan in our agency securities lending program managed by the Investment Services business. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled $62 billion at June 30, 2020, $59 billion at March 31, 2020 and $64 billion at June 30, 2019.


•	The drivers of the total revenue variances by line of business are indicated below.


•	Asset Servicing - The year-over-year increase reflects higher foreign exchange and other trading revenue, partially offset by lower net interest revenue. The sequential decrease reflects lower foreign exchange and other trading revenue and net interest revenue. Total revenue in 2Q20 also benefited from higher volumes from existing clients and a one-time fee.


•	Pershing - The year-over-year increase primarily reflects higher money market fund balances and clearing volumes, partially offset by the impact of rate-driven money market fee waivers. The sequential decrease primarily reflects the impact of rate-driven money market fee waivers, a one-time fee recorded in 1Q20 and lower clearing volumes, partially offset by higher money market fund balances.


•	Issuer Services - The year-over-year decrease reflects lower Depositary Receipts and Corporate Trust fees. The sequential increase primarily reflects higher Depositary Receipts fees.


•	Treasury Services - The year-over-year increase primarily reflects higher net interest revenue driven by deposit growth and higher fees.


•	Clearance and Collateral Management - The year-over-year increase primarily reflects higher net interest revenue and growth in collateral management and clearance volumes, mostly from non-U.S. clients. The sequential decrease primarily reflects lower collateral management fees.


•	Noninterest expense increased 1% year-over-year primarily driven by continued investments in technology, partially offset by lower business development and staff expenses. Sequentially, noninterest expense increased slightly reflecting continued investments in technology, offset by lower staff expense.


(a)	Net of distribution and servicing expense. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 8 for information on this Non-GAAP measure.


(b)	Excludes securities lending cash management assets and assets managed in the Investment Services business.


(c)	Includes AUM and AUC/A in the Wealth Management business.


•	Wealth Management - Both decreases primarily reflect lower net interest revenue and a shift within portfolios to lower fee asset classes.


•	Noninterest expense increased slightly year-over-year primarily reflecting higher continued investments in technology. The sequential decrease primarily reflects lower staff and other expenses.