• Revenue: $18.6 billion, up 5% year over year.
• Net Income: Record $4.3 billion for the year.
• Return on Tangible Common Equity: 23% for the year.
• Fee Revenue: Up 6% year over year.
• Net Interest Income (NII): Down 1% year over year.
• Expenses: $12.7 billion, down 4% year over year on a reported basis.
• Pre-tax Margin: 31% on a reported basis; 33% excluding notable items.
• Earnings Per Share (EPS): $5.80 reported; $6.03 excluding notable items, up 19% year over year.
• Assets Under Custody and Administration (AUCA): $52.1 trillion, up 9% year over year.
• Assets Under Management (AUM): $2 trillion, up 3% year over year.
• Foreign Exchange Revenue: Up 9% year over year.
• Fourth Quarter Revenue: $4.8 billion, up 11% year over year.
• Fourth Quarter EPS: $1.54 reported; $1.72 excluding notable items, up 33% year over year.
• Tier 1 Leverage Ratio: 5.7% for the quarter.
• Common Equity Tier 1 (CET1) Ratio: 11.2% at the end of the quarter.

• Warning! GuruFocus has detected 8 Warning Signs with GS.

Release Date: January 15, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Bank of New York Mellon Corp (NYSE:BK) delivered record net income of $4.3 billion on record revenue of $18.6 billion for 2024.
• The company achieved a return on tangible common equity of 23% for the year, indicating strong profitability.
• Fee revenue grew by 6% year over year, with investment services fees increasing by 7%, driven by net new business and higher market values.
• The company successfully executed its strategic transformation, transitioning approximately 13,000 employees to a new operating model.
• BK returned 102% of 2024 earnings to shareholders through dividends and share repurchases, demonstrating strong capital return commitment.

Negative Points

• Net interest income was down 1% year over year, reflecting changes in the deposit mix.
• Expenses, excluding notable items, increased by 1% year over year, driven by higher investments and employee merit increases.
• The outlook for 2025 is uncertain due to geopolitical tensions, trade policy uncertainties, and market volatility.
• Provision for credit losses was $20 million in the fourth quarter, primarily due to commercial real estate exposure.
• The company faces challenges in maintaining positive operating leverage amidst ongoing transformation efforts.

Q & A Highlights

Q: Can you discuss the resilience of BNY Mellon's pre-tax margin and ROE targets for 2025? A: Dermot Mcdonogh, CFO, stated that BNY Mellon is confident in achieving its medium-term targets sustainably through the cycle. The company has established a track record of execution and accountability, and plans to continue this momentum into 2025 and beyond.

Q: How does the transition to the platform operating model impact fee revenue growth and margins? A: Dermot Mcdonogh, CFO, explained that the platform operating model is expected to drive incremental top-line growth and make it more resilient. It will also improve efficiency, allowing BNY Mellon to run the company better. The model is a foundational change that will enable further improvements in client solutions and system retirements over the coming years.

Q: What is the outlook for net interest income (NII) in 2025, and how does deposit mix affect it? A: Dermot Mcdonogh, CFO, noted that BNY Mellon expects mid-single-digit growth in NII for 2025. The company has been proactive in managing the balance sheet, particularly on the asset side, to take advantage of higher rates. The deposit mix is expected to remain stable, with non-interest-bearing deposits moderating slightly.

Q: How does BNY Mellon view the competitive environment in asset servicing? A: Dermot Mcdonogh, CFO, expressed confidence in BNY Mellon's competitive strength in asset servicing, citing strong momentum and execution in 2024. The company has invested in infrastructure and is well-positioned to win new business and maintain its market-leading position.

Q: What are the primary risks BNY Mellon is monitoring for its business? A: Robin Vince, CEO, highlighted several risks, including geopolitical tensions, economic downturns, and cyber threats. However, he also noted the potential for growth, particularly with a pro-growth stance from the new US administration, which could benefit BNY Mellon's capital markets-oriented business.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.