2024-04-16 15:37:03 ET
The Bank of New York Mellon Corporation (BK)
Q1 2024 Earnings Conference Call
April 16, 2024 11:00 AM ET
Company Participants
Marius Merz - Head of Investor Relations
Robin Vince - President and Chief Executive Officer
Dermot McDonogh - Chief Financial Officer
Conference Call Participants
Alex Blostein - Goldman Sachs
Steven Chubak - Wolfe Research
Betsy Graseck - Morgan Stanley
Ebrahim Poonawala - Bank of America Securities
Brennan Hawken - UBS
Mike Mayo - Wells Fargo Securities
Glenn Schorr - Evercore ISI
Gerard Cassidy - RBC Capital Markets
David Smith - Autonomous Research
Brian Bedell - Deutsche Bank
Ken Usdin - Jefferies
Presentation
Operator
Good morning and welcome to the 2024 First Quarter Earnings Conference Call hosted by BNY Mellon. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Please note that this conference call and webcast will be recorded and will consist of copyrighted material. You may not record or re-broadcast these materials without BNY Mellon's consent.
I will now turn the call over to Marius Merz, BNY Mellon’s, Head of Investor Relations. Please go ahead.
Marius Merz
Thank you, operator. Good morning everyone, and thanks for joining us. I'm here with Robin Vince, President and Chief Executive Officer, and Dermot McDonogh, our Chief Financial Officer. As always, we will reference our financial highlights presentation, which can be found on the Investor Relations page of our website at bnymellon.com. And I'll note that our remarks will contain forward-looking statements and non-GAAP measures. Actual results may differ materially from those projected in the forward-looking statements. Information about these statements and non-GAAP measures are available in the earnings press release, financial supplement and financial highlights presentation, all available on the investor relations page of our website. Forward-looking statements made on this call speak only as of today, April 16, 2024, and will not be updated.
With that, I will turn it over to Robin.
Robin Vince
Thanks Marius, and thank you everyone for joining us this morning. Dermot will talk you through the financials in a moment, but in summary, BNY Mellon is off to an encouraging start for the year. The firm delivered solid financial performance, while we continued to take important steps in the deliberate transformation of our company. And we're seeing early signs of progress that give us confidence, as we work toward the opportunity ahead.
Looking beyond BNY Mellon, the first three months of the year provided a mostly constructive operating environment with global markets signaling expectations for continued growth. Equity and credit markets rallied, even as rate cut expectations partially unwound and bond yields rose. Foreign exchange markets, on the other hand, saw a continuation of the relatively low volumes and muted volatility that we've now seen for the past several quarters.
And of course, there are many tail risks, including a variety of different market scenarios, the possibility of escalation in one of the ongoing geopolitical conflicts or an unexpected result in the many elections taking place worldwide this year. As I've said many times before, being resilient matters and this represents a commercial strength for our business. We are constantly preparing and positioning for a wide range of potential scenarios to support our clients and deliver compelling outcomes for our shareholders.
Now referring to page two of the financial highlights’ presentation. BNY Mellon delivered double-digit EPS growth as well as pre-tax margin and ROTCE expansion on the back of positive operating leverage in the first quarter. We reported earnings per share of $1.25 up 11% year-over-year, and excluding notable items, earnings per share of $1.29 were up 14%. Total revenue of $4.5 billion was up 3% year-over-year. That included 8% growth in investment services fees, led by strength in asset servicing, issuer services, and clearance and collateral management, which more than offset revenue headwinds from muted volatility in FX markets and lower net interest income.
Expenses of $3.2 billion were up 2% year-over-year and up 1% excluding notable items. Consistent with our goal to generate at least some operating leverage this year, in the first quarter, we did deliver positive operating leverage, both on a reported basis and excluding notable items. Our reported pre-tax margin was 29% or 30% excluding notable items, and we generated a 21% return on tangible common equity. Our balance sheet remains strong with capital and liquidity ratios in-line with our management targets and deposit balances were up both year-over-year and sequentially....
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The Bank of New York Mellon Corporation (BK) Q1 2024 Earnings Call Transcript