BK - Earnings call transcript Q4 2024 | The Bank of New York Mellon Corporation

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Operator

Good afternoon, and welcome to the 2024 fourth quarter earnings conference call hosted by BNY. [Operator Instructions] Please note that this conference call and webcast will be recorded and will consist of copyrighted material.

You may not record or rebroadcast these materials without BNY's consent. I will now turn the call over to Marius Merz, BNY Head of Investor Relations. Please go ahead.

Marius Merz

operator. you, Thank and fourth everyone, our call earnings Good of welcome XXXX. the quarter for afternoon, to I'm Robin Officer. and Dermot joined Executive McDonogh, Chief by our Vince, our Chief Financial and President Officer; followed Robin with update outlook. will with a update, and start his by strategic financial Dermot will note presentation, can that and will forward-looking on quarterly our be our website non-GAAP update page statements Investor remarks Relations of our measures. at reference found Both which the bny.com. I'll also contain statements. forward-looking from those projected Actual results may the differ materially in Information non-GAAP supplement, the quarterly which about and our earnings press the update of website. in these is available of on statements measures all Relations found release, and can page Investor financial be presentation,

updated. over only of call Forward-looking statements XX, this to made will today, as on turn the that, Robin. With I not call XXXX, speak be January and will

Robin Vince

everyone, Thanks, thank Marius. Good afternoon, joining you for us. and

want our affecting into get parts we Los results, Angeles. of wildfires Before address I the ongoing to

community We are have the being tremendous several loss heartbroken by by where offices. we the suffered

always, And to our clients fires. affected relief eligible recovery concern the providing and by safety impacted committed in located employees the areas. of nonprofits, for our have employee well-being donations and also and matching to As the those we is primary

opportunity revenue run revenue performance, for we XXXX growth out in record of to plans every action in company we record against the out ongoing executing to Turning laid with on better, we to over solid generating to the year year, are of path our of to our $X.X equity higher strong XXXX, these with and last accelerated laid XXXX as our of X right pillars the time. power was medium-term billion entering and and company. clients, net a plan for a on momentum, as quarterly foundation drive strategic delivering we targets of that and common tangible strong be the now embedded well We're closed more to update sustainably transformation time $XX.X pace income for on culture. billion our our a our At unlock year. Aligned our presentation. to our XXXX set return exciting Building an BNY, and targets XX% on this financial day. the

see we As delivery you X of progress very in terms can our XXXX. Page on of presentation, in made tangible

opportunity the platforms our and For of cross-selling of our model commercial an breadth single leveraging our rollout new is coverage business was important company. milestone. for the the compelling growth the clients, most Effectively

is powerful an is have leverage model market across designed more our same. the to our improve deliver innovative that to company relationships. client at But the for BNY solutions not clients more the is of top BNY. commercial our Delivering drive about is we just another growth. X.X. ONE our and growth BNY the version This ONE to so important for of operationalization at deepen line and is the be way capabilities combination us from the And experience This of accelerated ultimately pace,

across good investments, Archer. a through or Pershing managed this an distribution and it example is Archer for through of solutions becoming in BNY provider, the manufacturing acquisition Our case, BNY servicing ecosystem, be end-to-end account entire

AI. is on investment new ETF the the And revenues begin the to ahead. Continuing and for product approximately we numerous Over we of CollateralOne, scalability. theme, servicing digitize increased Wove. we to of momentum over as savings new further and next-gen continue investments the Bridge, including drive the Alts technologies, new course to of developed efficiency $X.X an both billion XXXX, leverage year, a and generated course This we our investment workflows platform important solutions as also client capabilities such new years

company, decided further being we successful institution. Considering we've are been talent transformation our right recruiting attracting over improved analyst else, to targeted in and strategic working. Zooming efforts. out firm our to the of is to been at the to in into top employees spring, have culture the recruiting transition XXXX, way in are remains approximately our or new was phased our a roughly the employee of learning, special do. and recognized culture. familiarity our and last rounding much time closely working the benefits the our could felt XXXX brand supported team. simplify And positive work executive our to Throughout our for underway summer market's benefits and start people who to in everything transitioned the their investments commenced we experience and moment, company modernize stakeholders of we of logo our our and work also BNY's what valued essential by this XXXth X/X moment other with clients we operating more visibility see Powering see out our of improve in a mark benefits, the iconic the The in the that even year, a We starting course platform's around leadership of XX,XXX market also the are this for classes model of across the the to hard people world largest colleagues, many and and intern we've facilities anniversary the company's Celebrating the which our leaving world making on the from across together. more people. and around at

we our do deliver commitments. culture say. Another and important We've our powering of worked on what say is hard to to aspect do to what we

Page X, for so goals year. to again financial And the our once exceeded I'm met we or XXXX, in pleased that turning

scenarios. deliver operating range a positive leverage across wide confident BNY are We of that can

summary, goal started And XXXX beginning that perspective. our at a X% of had shareholders. the Despite with approximately a finally, we notable items. revenue. the of fee we the business. Dermot by in to reported the time, basis Therefore, down in points. on XXX% but notable our in in outlook keep discuss an of X% up of will same NII detail, outlook headwind more X basis and excluding an We XXX year grew the set year-over-year investments to by our self-funding X%, consistent incremental outlook, excluding year-over-year were we from while so beginning time, points positive break even revenue year percentage fee at points up revenue, That we roughly And to approximately reported basis higher-than-expected X% our at and at to and largely the expenses returned expenses, the earnings basis revenue in XXXX XXX operating NII financials determined excluding delivered ambitious leverage flat, items. least XXXX, was outperforming notable an to from XX% foresaw down operating considering the leverage offset growth items, was on

together, in Taken to resulted pretax capital we delivered the and Page operating profitability, shareholders, now we BNY. But of record on look a our underscored returns expansion leverage forward X. let's results reinvigorated execution and delivered which improved all financial XXXX. Significant margin in positive attractive of

$X and and of the capital over We a serviced, trillion roughly we and well are of on shareholders. of determination management and trillion the This $XX BNY securities settle trillion evolving across entering capitalize day, for on clients in an XXXX with our for clients platform. debt role of worth our $X.X data value trillion of strong exceptional franchise page. the plays on further trillion payments world. $XX assets left-hand worth AUCA, capture trillion platforms of and market on and collateral of diversified assets, financial which to with us described $X.X AUM, of global of trends, $XX client markets several our to $X trillion We services around wealth leadership we market central side average manage momentum and positions deliver

economic space. Trust Wealth, services, Wealth our and Within we U.S. is segments Management, gearing Treasury are wealth market, both leader fastest-growing ultra-high growth capital the net of worth our businesses and through activity, one fastest-growing markets the Some Services, that XXXX: of a public Pershing in market. and on and financial serving And higher Corporate in Collateral demonstrate and focused private. toward our faster-growing business in the Clearance

hand, gain U.S. the mass we the end to has provide more and also helping digital Pershing cash majority this the businesses, market power size U.S., markets across Canada. on than asset clients on products needs. And distribution, vast mover of of the both believe the investment, for evolve markets space. environment management. for digital our support digital expect in increasingly asset solve classes. Last represents power the saw providers of become we end finally order of retail to transformative under private have And for exchange-traded technology assets long from potential a assets year $XXX adoption and differentiator the and term, digital to FX assets to exchange-traded been in Today, ever lending And billion more this servicing grew and operating and early strength the alternative an to be complex reduce in Relevant BNY to scale platforms global opportunity which both sell-side and trend an as and consolidate buy-side business, connectivity in functions to firms using looking and of trends, market platforms the of in hedging certain the asset our we other outsource traditional to complex, are and help our to products underpinnings technology. client an leverages over the and navigate both services advisers' and the toward institutional BNY the scale them Our and fund risk. investors, in our regard. list important

begun the As the backdrop, resilience moderating behind there But the and remain more risks in uncertain a we transformation. persistent environment uncertainty tail XXXX geopolitical with path fiscal signs were with and being U.S. with of little allows think year, and having its to ongoing policies as and in us the we volatility about just toward this of on about month turn sheet focused inflation clear Fed us, conflicts, the view conservatively with outlook a election and for rates. strong trade tensions a operational operating executing the markets. Against ago, balance positioned across lower our XXXX, optimism

a While work of months, we us. we've past priorities made good progress against ahead strategic lot over our have more the XX

it As I've doing said it the and matters do is most. strategy how before, Actually we important.

page our reminder and priorities, calls some them our earnings is of type in right-hand new that the highlighted is the the there for can each the deliver. in for the on making. The this makeup real of business so of we for solutions indicators market that XXXX, underneath the past of we're integrated year, validated BNY strategic on over that demand our are progress side some wins And of us

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is it market. more our organize intuitive client enables realigns model. that milestone about platform's top Our commercial operating we through cross-functional coverage be to platform's BNY line accelerate our unmet By speed teams, And our from year operating collaborating across about furtherance entire across and to effectively anticipate teams the how also BNY's client driving of journeys, This in streamlining work model improve and model for ourselves solutions adoption more to of to enabling deliver our will is transition not simplifying, integrated the create organization opportunity. XXXX and commercial ability efficiency, needs, just a growth. we clients.

of of years our in This March, transition have yet this end activate model. the to our believe people largest platforms to will a our of quarter, BNY wave be half working We the the meaningful that come. into impact to we're will over that model so more than planning by

the of of And the summary so this we've presentation the appendix time for included program line in a implementation. and

X couple new line their have top in channel to To embracing us their investments innovations. our this our Next, time. alpha towards the data growth summarize our while focused generating of and are you positioned and last laid we last solid we our the by out AI shareholders, at jobs to of foundation to make transformation that easier more over the the reminding trends people year. We're become believe that over and it digitization our employees market we up wrap remain and capture company. I'll of of capitalize of theme, through the and a beta the laid power efficient energy and on market for clients, for Page evolving well value beginning years broader to we AI on continued for do drive to alpha proposition on

and on Our financial and strategic goals priorities remain clear are we consistent focused execution.

years by thanking hard update continued of everyone's what X dedication over financial that, the accomplished call over I'd like to grateful the ahead I'm our teams for to around for Dermot. turn to of people to world. with our us. past Dermot I proud and Before over close work that's and outlook, have And our the the you,

Dermot McDonogh

you, back diving revenue into everyone. Fee up on up deposit higher X% billion revenue X Thank fourth largely yields balance investment afternoon, good interest before presentation, billion XXXX exchange foreign the Robin, FDIC Net for year-over-year. basis, Expenses flows a Total picking higher was by and Page highlights of of the and driven assessment. $XX.X lower partially I'm touch was by on net X% quarter. for X%. up X%, first we'll relatively higher reflecting portfolio performance of Investment X%, Management segment of down fees market the the of securities X%, the net and the were Investment was across sheet business, client up Services in performance X% AUM market upon was values, special Wealth and up offset down and and management were a partially income by Services of of on year volatility, higher Investment new Market and and the fees. Despite Wealth services reported growth. impact volumes. mix, activity grew muted reflecting client our revenue mix and year-over-year changes segments. adjustments our offset values the fees $XX.X from reflecting Securities results

XX% basis, return expenses on items, partially for reflecting margin efficiency was employee common investments, merit reported year. X%, a were and by notable increases, revenue-related XX% equity and pretax tangible was expenses, up savings. On Excluding the offset higher

margin common equity earnings pretax reported on XX% items, XX%. was share of notable and Excluding was return tangible We per $X.XX.

we $X.XX, of up Excluding and were earnings notable year-over-year. returned XX% share share And XXXX. items, earnings common in per repurchases to dividends shareholders XXX% through

driven values, financial was fees, revenue new were market offset of year-over-year, Firmwide quarter. client highlights by were XX higher activity, AUM the partially billion growth revenue the flows. unfavorable performance the $XX.X impact of values. of management investment also U.S. offset services partially up fees by up fourth market up up a X% Total X% year-over-year. and new in net inflows mix the AUCA net X% market higher reflecting turning client XX% Now higher business, to X%. includes of business, by values, stronger trillion dollar. and for Page $X.X Fee was for This higher and reflecting Investment

higher Assets stronger under up market partially trillion unfavorable year-over-year, management were X% by of values, the primarily of offset reflecting $X impact the dollar.

client Foreign in and exchange was million revenue increased by XX%, driven Investment by volumes. quarter. higher other the $XXX revenue

of As fourth a to a a included related fair and a other investment adjustment $XXX the revenue in receivable. of reminder, quarter XXXX million value reduction

by reflecting reported in securities changes year. Net mix. $X.X offset basis, gains year-over-year primarily and the primarily growth, a investment XX% primarily items, increased the on assessment notable recorded of XXXX. in quarter partially absence strategic fourth balance higher decrease interest down income of recorded were the FDIC year-over-year the quarter by the billion yields in equity reflects sheet Excluding of deposit Expenses special last of X% fourth investment year-over-year, reflecting portfolio

was margin the quarter reflects XXXX, Excluding items, reflecting partially higher by commercial losses which XX%. to expenses primarily severance credit notable million efficiency real revenue-related litigation in estate on were tangible up expenses, reserve exposure. higher employee increases, and in was return for This fourth merit XX% was X%. the primarily of and were equity quarter, increases offset Pretax investments, common increased related savings. Provision $XX and reserves

was XX%. excluding tangible were and per per items, items, normal earnings return common on was up share XX% We of share earnings XX% notable margin Excluding year-over-year. $X.XX, and pretax reported equity $X.XX,

and liquidity on capital to Page XX. Turning

X.X%. accumulated quarter decreased reflecting X%. the decline capital sequentially, capital X% by primarily earnings. was for capital X Tier comprehensive partially ratio leverage in and income X and generated repurchases were up assets dividends, other Average stock by Tier through returns a common offset Our through

assets X% fourth Our and over sequentially, the our quarter the of CETX course decreased to by shareholders increased quarter. of was We the at capital X%. the ratio end returned by $X.X capital risk-weighted XX.X%. CETX billion of

consolidated funding liquidity The was XXX%, stable Moving was liquidity. XXX%. the ratio to ratio and net coverage consolidated

Next, quarter-over-quarter. net securities deposit Noninterest-bearing offset sequentially. the increase at X% deposits maturing of year-over-year The driven compression. Average primarily by higher increased reinvestment decreased quarter-over-quarter. deposits balances investment by was by assets yields, billion balance margin partially by X% Average flat in interest XX. and on income X% and X%. interest interest-bearing deposit the trends increased sequential by Net were interest-earning Page $X.X XX% of was up sheet and income up quarter

flat. Our cash portfolio balances and remained investment and reverse repo loan securities all

on in new were business actions in a XX. into billion, offset market and were higher our In Turning of servicing, primarily over validating trillion Page We're Total alternatives reflecting platform and reflecting to $X.X strength leverage fees receipt year partially In market year-over-year up fees Services, in and and multiyear prior by activity corporate the in up the activity broad-based the Servicing. once continue Servicing, momentum utilize to Trust Healthy of grew were activity investment again cross-border Issuer level fees, fees increasingly quarter. up $X.X to investments year-over-year. services and BNY's depository AUCA up starting investment we our lower into higher at X%. platforms. ETF total looking same outpacing time, And higher Clients net Corporate were was alternative year-over-year. of we've client our ETF on Asset AUCA XX% made of ETFs X% particular inflows with XX% of Securities X% the are and revenue by capabilities. new net see with Services year-over-year. the services pleased business. reported scale breadth investment the business differentiated segments, values, up client X%, services Asset the platforms these

market-leading market year-over-year, servicing, our share higher increasing #X stat maintained foreign straight servicing and was growth In from revenue year-over-year. merit by X% position. the for investments, course and share pretax our our margin year-over-year, income Net reserves, client segment, employee Pretax activity. up of reflecting XX% expenses higher segment increase Over exchange further $XXX strengthened in XXXX, litigation we've reflecting up partially was CLO Segment XX%. this were of was X% and XX% offset efficiency was year-over-year, up higher $X.X million, and a the increases, savings. income billion interest by

market up on investment total and and management Market $X.X large billion, client including and reflecting XX% Wealth year-over-year. higher values X%, volumes. were XX% year-over-year. new Management, Clearance services Pershing, In reported up and investment investment revenue in Net $XX client In XX%, a Services Next, up XX. Wealth services collateral Collateral fees fees were clearance Total of and fees quarter. Page activity. primarily Market were higher reflecting assets the billion, increased services by fees onboarding Services

we up Services, clearance Treasury see remain platform new up collateral global selected U.S. expenses fees back BNY million focused a BNY activity investments, of increasing $XXX XX% up expenses, X% pretax as platform. Department Treasury's financial reflecting representing organization's the as payments interest disbursement X% the up Segment income reserves. commercial Pretax continued of on capabilities and of at leverages In resilient program. outcomes as We speaks year-over-year, at by Express year-over-year decision U.S. and to business. This strong of treasury investment income offset overall partially year-over-year. was litigation services for to lower the in our ecosystem. new strength innovative new November, securities services our million, on driving employee margin. to increases, reflecting to connectivity program Service savings appoint Fiscal expanding access provide efficiency by agent And the XX%, merit that were the the XX% was higher net were broaden the market U.S. volumes to $XXX revenue-related the trading issuance well segment the Bureau scale. Net to Direct across financial and The primarily for markets. In our

and Wealth business, revenue up million, on of XX. Management XX%. Management total reported Turning our revenue to Investment $XXX Management was and Investment Page XX% Investment In year-over-year. up Wealth

up higher efficiency AUM Management, was item increases income, higher revenue net partially quarter, offset a as X%, values, XX%. revenue-related year-over-year flows. pretax $XXX of higher was partially And up million by was offset partially employee market Wealth offset merit expenses the X%, savings. Excluding Pretax by reflecting the mix $XXX in mix. Segment increased by expenses were changes in were market reflecting income in of notable and million prior revenue values year interest X% margin and product and by

primarily increased I net earlier, values, includes mentioned of of trillion of market management partially billion results inflows. Page Management's market and $XX net quarter, $XX of net $X the into by $XX impact client outflows year-over-year, the net year-over-year, offset outflows This assets As inflows reflecting shows reflecting from cumulative Wealth Other we of $XXX stronger long-term billion fourth cash. of billion. under increased of In higher strategies XX assets higher dollar. the unfavorable segment. X% X% values saw billion the by by and the

Next, continues year year-over-year. percentage current drive our to on XXXX. market based medium-term with points operating we star, up Starting interest with we be NII, financial full targets. NII ourselves rates, current again, have and to to outlook set on expect up north implied our consistent our positive Positive be leverage leverage, so XXXX forward mid-single-digit Page XX, operating once for

the to what the today, year. on quarter, And expect for capital the I revenue plus we year-over-year up year-over-year. full to in XX% to return fee growth expect to growth X% approximately are year be finally, to earnings, to XXXX and minus we XXX%, notable or to expenses, buybacks. Based deployment and like remind effective X% XX% would the remains for XXXX. Specific of expect typically distributions we expenses expect over be items range. dividends through shareholders we deliver in We excluding the employees. compensation And elevated then incentive our to anticipate returns capital on opportunities unchanged. And compelling We seeing course pursue philosophy to due full and our our retirement-eligible continue XXXX the taxes, to are you for tax to staff long-term for that rate expense first year

pace balance interest factors growth sheet our and As as as macroeconomic buybacks are real always, considerations of the well opportunities we rate which XXXX. as such in calibrate considering environments, will

management Tier In medium-term at of against shared were last unchanged January future. To the Our we of sheet. up of manage equal which margin to leverage the on our target year, BNY's volatility, backdrop targets greater X%. to remains common to X that range our interest the and the for And ourselves upper equal tangible wrap continued to maintaining improve to will rate XX. continue financial than firmwide ratio to foreseeable X.X% we end XX% medium Page pretax XX% than to on while greater return term over equity or or balance a strong to

our made our in progress harness principles have in about targets cycle. over solid order to meet We momentum targets our are through exceed past excited the of as and and towards embrace and to months continue the year pillars consistently these front us the the XX or people

said open with unlock momentum, at this to And into heading call, performance on Robin embedded past As the opportunity we're operator, path XXXX that and the top we're line? good please year, in that, can with the the the confident with of you company. we're our right our pleased

Operator

first [Operator Instructions] take of our with Poonawala We'll Bank from question Ebrahim America.

Ebrahim Poonawala

last -- to you is. And of margins market numbers to over first runway adjusted no for I today think or I or is great it's done equal mean, to big being of pretax year. a shock. of the of those hit your basis get have the to an trying what guess ROE you the pretax job X about than trying these as I'm it's guess is the us actually you'll targets year executing that it I'm we greater resiliency assuming are lens than. and I with But achievable, assume where understand margin question, on higher -- this I a reasonable sense

to, and So can I if want level, then address high you follow maybe at very up. a [indiscernible]

Dermot McDonogh

Dermot here. it's Ebrahim,

Robin and as established kind record So CEO, And had gave of and you. a like that has very of the liked time we you year, taken this where targets think, on those of we've that it well. quarters the accountable. as ourselves since X track execution to collectively we've say relates And I executed role holding that I group, we gave think to medium-term targets last we've would I'd a

said do say. Robin what his prepared you and what in as say As you do remarks,

going confident so we're And we to feel the those cycle. sustainably hit that targets through

of on you're to us more seen of into the 'XX couple the see and going years beyond. what you've in last So same from

Ebrahim Poonawala

in if better conversation than we I And an 'XX around guess model the we've of to of of, could you platform may X are and that 'XX, relative actually the revenue fee in by whole resiliency but does much a a employees and from Slide could and and that's these growth that ROE. the more I'm look back the terms being where result the of allows X just terms this growth ways improvement in end at resilience you again, event, for synergies your I you're terms to Understood. address of maybe more of lot to that just in XX% wondering sort platform of, for provides on relative whatever in actually quarters One, happen resilient been where markets? like if if getting margins on moving to model. And that last on do as that few through flows targets, fee to the

Dermot McDonogh

about of is important we've So company talked run drive you model, better, which but kind culture, out of XX Page think are we which I X very run we of show laid strategy, the pillars. a pillars then company and up behaviors how our the less look the terms pillars are at underneath day. The about be page the really how platform we that, the in internally operating in it is every mechanism of you, which by and in for power more for terms we the X kind the our of way if clients,

And years, the quite incremental turn, and also the together. And more we the company last operating believe then, that us line on businesses growth, the the in that bringing resilient growth run commercial strongly top our with the will that last that. to, of will line top words, efficient allow out will kind closer but side, of drive the really couple to do speaks really we over top of platform went that become more I model used the with operating de-siloing, middle model the So of better in year. line make launch

together, we're take you higher going elements incrementally those with you discrete the go, together tools and deploying kind all it of of add that is okay, and grind fee here kind So revenue from to executing. you

Robin Vince

the just done really 'XX that It's platform's in just to a of concept on is it, we a enables because and And about term. story before about efficiency more. and point horizons. going can X able model for over we've which consistently retired And 'XX with more Ebrahim, short, the pretty I'd that the our other systems been retire as time for both foundational your then investing isn't is talked this allows that's the can for line question what past we X some story. And 'XX, some, that be to some a 'XX, do been consistently also solutioning long thing actually for well it opinion after We've to do years. do because clients, add even have do medium, us comes we we've to call trying relevant and top all expense things. Retiring to we've but X And that. more. Being

there's thing you 'XX fully won't model more into I frankly, if think quite that can us. bedrock the the we 'XX, 'XX, And that do for of we payoff well. to come it's quite the the given be until through XXXX, even a this So fact decade, end expect

Ebrahim Poonawala

the so good slide, and growth job. that's XX, it, the Slide Got

Operator

We'll Betsy Morgan with to question from next Stanley. Graseck move our

Betsy Graseck

on Just just to X wrap up things. last topic. that One,

got 'XX, model are the multiyear, to you 'XX. platform Given but this 'XX, of of benefits joining in get operating in on incremental step-up of XX%. that percentage the in I going that's a that to putting of that model, XX% the platform the all the an you're in be folks is the 'XX, and employees

'XX? coming expect in we leverage will increase, large So given folks operating slug should also that this in, of

Robin Vince

direct go in if of Betsy, years of this during include as a CEO already transition platform's the the this beginning We started thinking We correlation we very terms to We to into to back started you our model, on test. operating I at then you way because process. and would X Because you're actually of say at the that designed. X beginning the started the we're the thought then linking things it, about this my the role. looking execute. actually then into

the some the And this that new it really then we we so at we've with far you've observed it we've ways gone make started wanted knew go rhythms of has a year were so employee people a very change like phased progressively. And the then so we benefits real more as working. speeding very so from of, the in afterwards the because you for tight a getting pilots a and are into based that that although deliberateness got up fundamental team which come that been or and actually are about higher a benefit the of delivery. And was sure doing -- their the have model, okay, some company, we to operating teams satisfaction important velocity. the And we there now into as benefits there's on XXXX doing work,

of of do their the in Better Now end control better their their multiple products, things. systems, the in client what potentially of in back duplicative can of you the design design that? rationalizing with of control terms

that I with time it. And as scratching about. there that so talking as associated were there you they're And not immediately payoffs but we are of you're sort the Ebrahim see the out and lead think

observation, benefits that feel Now in the long-term us deliver things, and we medium of quite to notwithstanding confident back we we've that our will invested got that, in guide. expense are have short, that my other XXXX part

Betsy Graseck

It in to over year to right, should, XX% right, much. that Yes. going Anyway, up All XX% feels so time, leverage operating just rate. you okay. X like that's from XX%, bump thank

Robin Vince

Betsy. Thanks,

Operator

question with from next Our comes UBS. Hawken Brennan

Brennan Hawken

assets new quarter. at net in this rebound solid Pershing really a saw we So

RIAs? segment, it what you you maybe speak I quarters as were offboarding of would type like in driving broker-dealers? this. this Is So net a could to you curious to ex But wealth if Any a some strata worth for ultra-high growth? are look of good prior Is driving net how and with. assets strength? could maybe which dealing sources new And we contrast spoke believe driving firms compare the of that client it Robin, particular

Dermot McDonogh

to assets space, was for digits across And we about a thanks the and win we got on cycle. And QX. way and is, whether So right in it's good a Wove. re-guided of grow mid-single gave large We've this remarks, given that. would the -- look, new XX have reiterate Wove. as technology broker-dealers, on it's think had, Look, executed kind -- and at I noisy a guess I of we at guide ability last the 'XX team year, we Brennan. again And that's the the we the We've like higher the platform. if And this a to just question, time guide kind large banks, offboarding. RIAs, you look We the through our our place. onboarding prepared year we and in now to in it said that's year, the we -- net whether have on it on think the clients my Wove

XX We have contracts. signed

a model all, So Pershing into operating in feel all benefits in And incremental going to platform big so in the pieces see that. really, QX, one forward. of that's really like on for the seem business of have it's we bigger the we we momentum of kind

and is a a market, that like on that Robin be sector, very business growing. see continues the tech we wealth the a to strong fastest-growing but touch us, So will and space. And continue are areas in player one big very, in Pershing for we the of to

Robin Vince

add, the think business. Yes. point and that's And been Pershing about BNY that of time. where more made It's net net they're And focus in got like is really worth there's Brennan, Together, that space, solid Wealth wealth on high We that's the over is really investing thing its and you then performer. a across to in trillion that just business. it. billion-dollar-plus assets. the I'd RIA worth we're We $X about upside worth. That's ultra-high our firms,

And the through software And trend. U.S. is we a think market ultra-high what one, both net service of so the one, it businesses, trend, when think big real market. wealth approaching market retail we about and we're broader those worth, is actually approaching the

Brennan Hawken

notable out you then help Could Great, think still us you very shifting mix. Certainly, cadence like? this as do year? look you So would think neutral? understand you're should And mix that's be any did outlook Or there And you would it than bit a Are trajectory year the expectations. ago. NII largely made the to gears deposit you the assuming in a maybe model what that you're looks that shifts helpful. the reference largely year better a in deposit stable? changes on

Dermot McDonogh

Okay.

So me, over kind forward really in of sat market then the that Brennan, here answer that's the was this of to was we X on last way I'd for of years longer, to like of kind time 'XX, X in kind think in clearly, that broken X in guide and order I the of at to And higher kind implied seconds it year, When pricing on the the at spend just reflecting the year, positioned spring, When signaling maybe was down came then cuts. rate in time. And the about a the curve we Fed I We for into summer. XX%. question, kind clarity X%. we were where back couple of X. gave think down

was of pivot. the You were on rates the kind book, of taking time more the had higher the went the we where and of the of Fed had balance around factored Jackson particularly to the of time into in we of and asset kind finish guide easing franchise, in clients we've a kind Fed overall, we side us, advantage as to Hole Trust of of higher before Corporate proactive then particularly kind the the more balances of which the had year. And kind doing very of of repositioning into started cycle, year-end with the we clients that there the strength fall space our this which of end doing for kind terms very of year, the the at And sheet led the strong NIBs, in really activity. terms

year, Now that moderate kind little balances a as the of expect, on NIB beginning of seen particularly you bit overall, the we've on would at the side.

it's then team like the the up unique in in between strong we terms the year. like that working side. And It's on and the on prior made of I've balances. forward many doing NII a made is we're curve. of made do terms this really to stuff believe is have our that know, that our for the what in shows franchise, treasurer. the CIO, with of well up mid-single asset which strength up of so of And whole And of us, strength of doing tripod, digits of guide deliver It's really the GLS and interaction clients leadership, times really, I this up up you the made said calls, as

Operator

our Wells from Fargo Securities. to with Mike question We'll move next Mayo

Michael Mayo

platform on company torn this I'm transformation. services financial

the platform. On it's everyone if the guess X hand, great is I mean, same I on

ONE BNY. have the You can

a of gut you of employee the like lot run systems, just from On -- to the it Maybe seems to it XX% with out company. maybe other training. have like XX% all go you you're the parallel hand, looks work ripping have to

on when so really end? together, you're put show Could a just little short And then operating transformation it's so BNY, tough And the what this, X like I playing a I'm bones? I meat you going -- ONE positive through guiding are I just conceptual. to add you in when in -- I just for term, the for it platform. positive you operating I are too that. more just a all mean, And leverage get 'XX? I in get any little you leverage the it's fee mean, get

Robin Vince

Mike. Happy Absolutely, to.

what is do who we we to this really And call were does technology, company of me provide this done who underwrite just we and the how to view had software we to something back little take that was, clearer, a you services, build that for ago make a years we that to talked X really we do, that let when it, describing it. businesses of moment came essence point work we on. the to BNY their clients the on So about for the

platform platforms, of We securities in we that about. #X we're have issuer market-leading things a as got collateral, are Yes, in services. software technology in We've #X this these services. lending, trillion #X essentially big world's combination custodian and #X wealth just well. talked $X These and the

able with Wealth platforms, where the very not and our part highest so growth. And see of we've can the the you got be of Market fastest build growing. to of a that rent is those And of lot allowing platform the all in because it numbers clients the most heart scale is our business, company the and profitable Services is the the margin of them, that to it's

I'm about driving very we had multiple with around things who approach the and commercial siloed so I'm get do are, is not organization about We how -- We joked separately. the organization recognizing BNY, just the said, are to do systems That you of end organized we're And that. clients everything. of just we had had of Number headed. we individual had that just X had around serious with pieces we the ONE technology. talking to and one, in front more the nature people. And it. to new do We company that we're for We solutions centers. as as clients, about of That bit we've where call presentation talking that the versions in back-end doesn't this work for can't X the other platforms, around run you we company custody of every had multiple onboarded a model, the before. of the thing stats things the gave how that products. But adding well those commercial more we we new doing to we're

at think We determined is who we've organize we it platform's has margin, So to the mind: tailwind been terms an in the to that in don't multiple We employee in a actually don't of operate it's We year. That's organizing satisfaction out are been setback in we We with even in we bigger tailwind operated grinding of a had we've to year think can the It gone one, be that frame. model as metrics create just disruption. key very through operating this. because about don't we have been and over it. X what up think question, and about. But had deliberate each model time the want differently. people are. years. And in Betsy's any

thing is second velocity delivery also The we've third better delivered those clients, up. the for thing of groups we're and which has And operating gone is has the then new the that improved. efficiency with

So to a do. couple cleanup that's to mindset, we're you're also drift if into. something mentality news quick This we've make the of it's you best got with delivering this the The of a be is important. you that kind It's for been medium- very way, a is big -- it all change. years. But you're and do not along you've trying of BNY right, something not can good a the sort you thing fundamental long-range if is

Michael Mayo

when I something software-as-a-service? phrases maybe this any somewhere the do industry, like around an example don't the hang else out mean, have tech use my is And I using. new? world bank with banking another or you you're there or or colleagues outside example Is brand fintech

Robin Vince

themselves. is down of they've with or industry. technology this the built essentially from tech companies. speaking, reorganized large CEOs broadly borrowed, is this So I've how And titan sat

if a a fintech they've and This trendy. platforms doing We're with tech is not more of might it it firm, doing we're be nature themselves. And because of As the how like. the a be fintech, we firm. because organized pure you it a large sit is it might you technology do say, what down it's tech CEO firm,

firms concept But after of in they space of it's encourage bits broader every Now some wouldn't there gone little also of of, this are bank. are. examples plenty examples other a particularly fintech for in because think I of the examples us. There for we are sort adopted business, space, of bank their banks the this. who've have who who good fit

an you're big different retail house if necessarily bank a trading fit. But bank, that. this big investment I or doesn't a we're than think or

confidence. pilots bank not into We us theory. of is and our quite bank, done, the of it. but remember, we a gives to just we've that's thing of how we've think early form, already. that And It's are the have got suited we're nature what it's and And businesses well going, been this lot different measurement quite importantly, we a our

Michael Mayo

do the 'XX? about follow-up. last spending worse, Tech you -- efforts? to better, same then How AI 'XX your And feel compared

Dermot McDonogh

last what couple that code really earmarked year. $X.X the building We've have the zip and of good got of we seat with feel range are about we tech the like good West and Coast, this Mike, do numbers, of a for the billion learning AI journey. roughly we're like to have I spending, spent years relationships So the $X.X kind really, We of on and infrastructure. really in do and at billion we the out table how where to it. investments

about think better. lot going the coming AI how to hear company a you're I to quarters more in So run from the we us deploy

Robin Vince

And been statement, one years. lot think the operating and a concept the AI, two That better really broader then running and then a company the has as lasts number platform's different AI is model, And it. we tackling. harvesting a has seasons important. number Season of blocking few and Season to implementation, benefit. of very is this

Dermot systems mentioned, was gradual AI. capabilities pivot hood which uplifting the quite that's And and there's better evolution around billion through past a of I basic $X.X mix infrastructure, that to the that so within And through making is under the occurring that our think important.

it's a number actually a not static it feel but like may So composition. static

Operator

question, For Goldman Sachs. our Alex we'll next with Blostein move to

Alexander Blostein

you X operating on Another leverage. guys for

clear X%? so I more XXXX a important about guess NII far. great importantly, do maybe firm? as context, that talk I fee the And you and as to and about But whatever leverage total, Hear how to reason, metric that is not. know obviously, on is you a right operating have room which XXXX. talk well fee beyond. about in care again, guys short, falls So the for loud X% leverage how outlook that progress in operating fee if much helper against as the and you you wiggle or

Dermot McDonogh

Thanks, Alex.

the can that I leverage consistently look, we as So fee about number There well. delivering are and toggle. leverage leverage, total, factors multiple we're remarks, also that think operating positive operating said about my in talk But I of with also operating those levers delivering the we each through a and of that do on prepared it total north focused we go on very in categories, cycle. fee star. terms NII, as focused that: is expenses. And have into of we're fees,

So flexibility end number. how in over inputs we with we of we like up have the terms feel that

of XX was kind last that kind think I very if ] there And X year, so kind of you And contribution to from was take year. look, of [ reasonable a of NII. good a positive amount

well as the through leverage fee so we operating cycle as And to positive total. expect deliver

Alexander Blostein

that Got then seen quarters helpful. yet. for there's hasn't And clearly, still for small of to super think stronger and some you guys the it, in a for NII. We've nuance expectation just handful results happened business that I follow-up repo But around normalize. a now,

What contributed the maybe quarter could And contribution the you to factors that, guess, going model So in that forward? change the rate, that of I given within but the also bit little talk year. a performance about do stronger of NII you maybe for part environment appropriate sort what and run within the that where the is the the to the think are outlook? in

Dermot McDonogh

it's context cleared of look, on X% The it's repo, for only in give So I strong would QX. kind NII. is of the -- overall performance that, Alex, you roughly

We've of we the more being it's products, last years small how clients, et cetera. better context talk in the the in about of still So for a it, of bigger number. of terms couple invested kind lot in technology,

on expected it's a of grow part meaningful to So number. balance, but the not overall

Operator

Bedell comes from Bank. question next with Deutsche Brian Our

Brian Bedell

start side deposits a the assets. with like asset just Dermot, couple growth made, the assumptions on you revenue. that. earning on to deposit of looks on on appreciate for commentary factors all financial the opposed more and on And to net the mix It interest in based 'XX. growth it's Maybe as and in Just outlook on

get have? can -- I just think client all of, the you deposit else you So to you to equal, wanted sense base what all your the grow actually you initiatives do do extent via

Dermot McDonogh

bit if for terms kind I we you and of look 'XX, side. like So more post of talked kind Robin's the into it's -- the election. a outperformed you 'XX, balance kind the of and But reflect starting about, on we remarks of little think in uncertainty on as year we out

of zip off what's the of to reasonable roll kind X% of So we is and $XX kind -- at a we've the in a have moderate we of kind expect of with book of for guide, flat still of and NIBs into to I little from the QX, assets amount outlook. the kind underneath of billion billion come yielding in mix to up now, of $XX QX of the NIBs embedded kind balances down. We're kind roughly to current to and shift expect the code But be bit is market rates. we kind touch way

So asset a management terms you're balance on David, confidence like around given side of that guide. correct, has proactive of the in mid-single-digit the sheet lot us of

Brian Bedell

an the this And to alpha of shifting guide. like fee looks sort Okay, great. guidance side, is then it

the just this does growth mitigated headwinds. by about make generally I would course, markets, higher of organic currency assume progress talked partially You But of on guess, drivers that you we're line what strategy, have then platform as very being the if flat the revenue we to guess equity I uncertainty strong rough if do delta up in And be say would that? XX%, commentary? with on your be markets,

Dermot McDonogh

Brian. Thanks,

last from of roughly in of So That's given on the growth $XX part X% as sensitivity. And neutral strong here guide, I what question, say your kind years, is fees. markets about first in is of performance in you market couple kind We're the really the kind to markets. of rough your to we've on more kind have, terms kind our of kind of appreciation. say, would of, of market million

Brian Bedell

Market appreciation, yes.

Operator

next from with question our Securities. Smith Truist take David We'll

David Smith

just AUCA be to a in trillion managed lag how income the markets the a your fixed of us remind might not You despite and the big $XX.X reflect Can fourth hold showing as quarter. off Could comment seeing in that decline there you're competitive the in flat you Servicing much the markets were business the quarter. we saw strong environment decline full to on in you well, Asset like later Either quarter? it in as really please? way, the seems that inflows

Dermot McDonogh

the look, terms I'll momentum, deals on won We won that very into we start well where we over we of environment, calls. Servicing and in think So Asset in number business with the and competitive last with of year. competitive of We've came in prior terms pleased the is invested I new 'XX infrastructure. executed talked a strong about very with the strength,

the the I at think Asset And looks some firm. as about bellwether Servicing, we well we're business. I clients. And the up everybody Asset think ways, showing for of feeling exited the in Servicing year good very

into to custodian, and fine right in do win largest enter kind going 'XX. we world's and I think share to with winning XXXX of just so our momentum And we're and the continued our

Robin Vince

a there's And ton not lag. of

David Smith

clarify, And for or billion $XX mentioned the then billion for Okay. that to first you embedded of the the full average just $XX to NIBs Is quarter in outlook. the year?

Dermot McDonogh

full the For year.

Operator

[Operator question from RBC. Instructions] Cassidy We'll take with Gerard our next

Thomas Leddy

standing is Leddy This Gerard. in for Thomas

see are guys all are obvious primary the businesses? monitoring for geopolitical in risks from your risks the Aside what news, we you the

Robin Vince

in economies the in are uncertainty be this to of countries, important Well, bunch got major there We've months. elections. some in policy wars able you We've the to of of moment. I've at times can through got few the And X a the struggling been We've just imagine, we different a countries. course past risks really essentially question got terms asked as world the of great over lot find of in growth. that continents. have year gone many been

as a in point, world. There's U.S. the we've And It's that of in so see risk got at or of some in around downturn we not if teams now. even who possible. complexity around impact rates at at higher right X.XX%, maybe in things lock can the well. XX corner we of levels, There's the certainly countries X%, the something Those create lot place recession the clearly, new rates higher years a knows,

contending today fairly each really but probably which is long list are things, market low are of a a probability lot the So there with of them.

are something So the chances of happening probably out there.

So we're business. just We're predictions the not trying to in prepare.

give the I uncertainties. help clients navigate think our ability these us platforms to

you And focus. which a several you're and if to risk, curve cyber clearly pick But that's risk. of issuance, risk, going say to probably a absolute our countries is geopolitical for had true so couple, different levels

that, -- We're think of to markets-oriented financial side should company. Now mention it's I on it, a company. flip I the platform a services capital important we're

things. in including administration And so benefit is from incoming encouraging, other We important hear here pro particularly we're B, because very growth. U.S. the growth for to A, growth pro-growth it enables this it's with our many new so the mantra and business and

flip all there of sight we're haven't this that of this And the certainly undertone are of, we which think risks sense side year, the of sort lost of there. of possibility on while the the for managing out is the I risks, so

Thomas Leddy

helpful. it. Got That's

can interest some us fee dynamic theme servicing the revenue might trading rate to you growth? how on attributed impact to cross give environment And the increased sort volatility of your color many of sticking currents,

Dermot McDonogh

through the volume, last if increased treasury and the really records you Clearance which pipes. had year, we going fees. us you particular, increased in what's X definitely, platform. Management, there you of doing about last benefits more mean of clients volatility, Collateral and increased on more look activity. And year, pick business a just hear records records on talking increased talking just number And we issuance, where at about Well, if from volume in times terms were when And just much processed we

of real treasury for So I the think over issuance has couple last been a tailwind years. us

Robin Vince

you matter in X many Collateral in of transaction markets, in touches of markets, on the trends business. to the presentation, the public in so that software quickly gearing of to like and take out the prior goes one credit laid there our direct things take To volumes are fixed Trust income. our markets matter. your And who income pages our happening levels our What's parts capital concept. But we composition fixed our sales. our our management of private question, are in something That's part of capital business, businesses, this that part Elsewhere, of our this Management management business, investment strategies. platforms debt growing Asset cash because we our of add just and our markets assets Servicing Clearance sort to just question, does investment income, business, Corporate a of revenues business, business, business, business, absolute I'd from LDI if we revenues our some fixed have

firm capitalize the back different so we really breadth lot and ways across of growth the And in are to this activity. point a who is on able to of

Operator

from question our comes of the Deutsche final Bank. line Brian And Bedell with

Brian Bedell

Just wanted to circle back on Wove.

Did a the -- I I had just can or in in I exit Dermot, is at I progress maybe the mentioned million the that exit guide you you you talk Wove. $XX 'XX maybe for about guide. this, general and said 'XX. miss revenue saw missed think, you And of rate point? just if actual annualized offboarding

Dermot McDonogh

million. remarks, the would summer, 'XX we kind for they're last at signed very on prepared products $XX talked pleased. revenue liking So becoming we're I XX more say seeing. kind contracts. proliferation clients XX In sophisticated of of And to INSITE the that of incremental the million of platform, what about clients announced we really and $XX so

Brian Bedell

$XX that to $XX right? million, is incremental of is million ] it. the XX to that 'XX ], Got [ Then the [

Dermot McDonogh

that's correct. Yes,

Operator

to like would back any Robin that, session I or for And our question-and-answer over does with closing additional that the to remarks. today. for call hand now conclude

Robin Vince

We your everyone, thanks, the operator, questions. and Thank time well. follow-up if Marius today. out for to Be IR have you, any interest you and BNY. in team reach appreciate your Please

Operator

be will call and conference This great of Eastern conclude Relations and webcast. a this today. on Investor day. webcast X:XX p.m. replay Standard at Time A available you. BNY website does Thank today's Have conference the

The Bank of New York Mellon Corporation (BK) 15 Jan 252024 Q4 Earnings call transcript