The Bank of New York Mellon Corporation (BK) 16 Jan 202019 Q4 Earnings call transcript

Good morning, and welcome to the Fourth Quarter 2019 Earnings Conference Call hosted by BNY Mellon. [Operator Instructions] Please note that this conference call webcast will be recorded and will consist of copyrighted material.

You may not record or rebroadcast these materials without BNY Mellon’s consent. I will now turn the call over to Magda Palczynska, BNY Mellon’s Global Head, Investor Relations. Please go ahead.

morning. Good released the Mellon XXXX. quarter results its BNY fourth for of Today, at earnings financial both call website the release available presentation our The and this highlights press to accompany on bnymellon.com. are CEO will Gibbons, Mellon’s Todd lead BNY call. the Interim you Then presentation. our will earnings through Mike CFO, Santomassino, our take

prepared will Mike’s Q&A session. be Following a remarks there

yourself please As questions. a limit reminder, two to

our a Before please in the SEC, note with those include of results Actual on statements. materially including we in that from website. may available those as press presentation filed begin, all the in may or the indicated forward-looking various factors, by cautionary and implied forward-looking highlights documents financial result the our remarks statements release, differ identified our today earnings statement our

speak not and only XX, XXXX updated. be call today, this January of on will as made statements Forward-looking

With over that, Todd. I hand to will

everyone. you, made then outlining and financial will for will I go briefly good highlight detail. focus year XXXX. financials much our highlighting through then progress more and most comments Thank fourth full well in results Mike as and XXXX my as the Magda the morning priorities quarter the the in of we

quarter, of and per a discuss. $X.X of reported the earnings from includes we $X.XX positive $X.XX. which billion This per of Mike will For share impact share fourth items, earnings notable

of capital returning to We billion, return same efficiencies full a over What time than included year, in XXX% millions were operating interest U.S. of achieving implemented solid and hundreds of rate had XX%. dollars the a equity capital expenses XX%. dividends of year investing and full were business. new technology for while levels means earnings of generated actually buybacks, notably margins our strong $XX.X growth productivity tangible than $X.XX of we of while not of we more in some identified greater hit down increase challenges delivered maintaining without of billion and investments. in than on the real common solid those markets $X XXXX, that This For position, is as revenues approximately on an shareholders constrained EPS offset adjusted and through the on slightly we the many basis, at cuts activity and equity was and year however in client to more highs,

the we saw modest organic Despite are and growth. services, revenue investment fees in resilient we some

a a strategic We drive XXXX delivered built technology margins and the returns programs experience. shareholders. of also risk including investment capital and and operating significant XXXX solid number for in that in client executed enhance operations strong while our substantial reduce in will foundation We talent, efficiency,

at portfolio, our start across with progress let’s business our servicing. asset Looking

segments. front XXXX Aladdin, service choice providers recently, system are owner new We clients action excellent most asset with our architecture them different in taking some to created exciting pipeline SimCorp asset namely office and announced the ensure and these Bloomberg, across partnerships provide and with gives flexibility. open will that leading and provide quality, we wins both we important and growing We in geographies manager is consistently

data distribution to where new data our position While and prospects partnerships relationships. strong and analytics enhanced these are us position still available helping clients, are accounting, capabilities new we our our strong they us strengthening expanding alternatives our have analytical management, growth ETFs, win business. early, range are which performance and our and to applications of offering and in We and deepen

In growth lower are and provide for seeing the we and good made services satisfaction and attrition client Pershing, of client coming We in driving improved are This day-out work and progress quality our measuring clients. fee day-in and we is relationships and monitoring rates. improving will through and strategy well broker confident the are The the institutional many dealers evolving this leadership in both to year that with pipeline about industry is we and We and ended going years in us future our position space. strongest with RIA forward. the business. excited market already

We to architecture future the continued consolidation Across make increasingly new industry, helping Pershing’s the our open each to build is clients pipeline. quarter attractive these clients. and onboard to

We segment, and market state-of-the-art to dealer’s continuing investments with to accelerating broker and technology, analytics development segment in leadership are the in and third-party advisory providers the the integration front-end of investors. advisers deliver strengthening including experiences

these an our even better of are us making to All clients. partner

delivered driven they are growth will new we by the business fee financial and saw clearance collateral their increase of business XXXX. as the with and the clients In as we well on-boarded clients existing year in performance strong clear us. management organic where leader, over We XXXX course in

structural growth our collateral globally. continued business from provision to clients modernizing bilateral see our changes to ability services and give their repos seamlessly opportunity in and our that this platform regulatory move the for to We

our enhancing are self-service We have to platform more clients and to tools. access real-time data allow

processes we automate to and and experience manual improve capabilities. improving client continue enhanced efficiencies operational are digitally the introducing new by reduce risk also to We

services, business gained issuer of share relationships. a broadening corporate is across building market In in which number as insurance-linked securities. trust key products, debt our we well and capabilities, as our and We structured as such out are muni drove new

responsive us deliver loan more of enabling them the rollout platform more Our new functionality. to our servicing to and be ongoing clients is

to digitizing minimize and to in clients and workforce control services gain offer help increase capabilities risk, simplified access efficiency. We to automating are data and investing them tools

of result $X business per reputation and we made scale investments relationship In clients. With on higher our to as meaningful are for we are institutional and coverage, day, excellent liquidity product such very partner Service our businesses margin the have service in XXXX, payments Treasury talent refocused and which successfully has payments. and we of over the trillion Our offering.

around in high-quality Our deposit grew initiative stable balances by XXXX. XX%

Services to which solutions been real-time rates, straight-through efficiency client centered operational have the experience. Our technology further in processing advancements both on investments Treasury and increase in of enhance

of impacted including to strategies, multi-asset over improve the investment in equities across the negatively the outflows solid has by results the the last were across largest however, Performance, and combined the financial pipeline. with classes. platform helping In asset products is year. management, That new many been

improved seen performance Walter is strategies, active believe Scott for and that we and have including role continue Alcentra going an LDI to We important there Newton, forward. in

the from Our benefit business well investments our increased management as will long-term over as wealth strong leadership.

are leading benefit expanding a set digital and banking We clients to product our our force, and strengthening and our tool advisers investment sales and create delivering experience. both

consistent overarching our technology. our investment business all So, in of is

on cost turn them. savings innovative enhancing and us and efficiency technology for quality, clients, our is Our priority centered in creates as products improving for developing which as services for well

expanding data and solutions to continue and infrastructure, an and We of APIs the analytics create use our our are transforming platform. to open

to artificial clients, as are to distribution learning deploying and improved additional their deliver We intelligence of proactively to own and increased processes such machine products. simplify analytics insights

We are November. embracing partnerships in

conference. new For us capabilities, Fintech expand collaborations contingent of number asset with recently will of oversight one example, net to new is we for including our announced This suite solutions deliver value and hosted beginning. a fin-techs this just a Connect the We inaugural enable a and well received to clients. that week, calculations

automation across new efficiency we are are to numerous have In operations, already business in to support we play and yielding able reinvest efforts. that the that and efficiencies businesses initiatives initiatives further

over the while elections, continue our reduced process cut-off in reached rate. automated capabilities automation corporate And offering times. from when of clients have We have of enhance XX% In space, has December, X,XXX in straight-through to best-in-class payment that increased example, we action reporting a our number significantly record deployed we the a service that’s ago. fund month For reports. we manually the for processing XX% year accounting, transactions up in self we client

the we of the data client are and control billing in such us recently needs. disciplined launch AI focused Other process partnerships our making enabling One helping investments Across do technology AI-based solution things an been complex are partnership data efficiency company, and better re-imagine the employ us on to we into serving driving clients the faster. are as and our spend. announced have to inquiries about resolve reconciliation

down number XX by over As in or which simplifying XX are and XX% an example, past the the XX% infrastructure are the reducing applications, reduced months be will we are plus. our of months now another we next so,

to of applications X XX% total period. plus in So, over a reduction X-year

have to do, path. more the work while we to right we summarize are on XXXX, So

are the over to of on made made we initiatives and host recent invest the to capital continue see while and investments We progress operating of benefits will margins years beginning strong and a we maintaining returns.

is growth this. as within faster As unchanged. our quality investment our culture, in innovation; we priorities we driving on improving the are that operations. aspect to revenue through two, sustainable performance strong focused centered technology to improving service well look every can our as key are on one, Maintaining They XXXX,

the drive discipline four, $X the exceed are Our spend in organization overall as expected Three, to as spent strong shareholders. to to and well we for throughout XXXX. deliver through continuing expense good we is XXXX capital to automation returns continue we technology billion ensuring efficiency

our we improve. closing, opportunities confident looking them In our and plans are execute for to ability to in while always on

review more team that, the firm. the it in foundation, great to results With detail. for are and great over a future have financial Mike prospects a we We about and to excited I the turn will

Thanks, Todd good morning and everyone.

the I Let year-over-year quarter. be for specify will me unless the results the otherwise. run comparisons details basis a on of through All

by corporate some gain investment. $X.XX revenue the from of $X.X most service the benefited security all severance, or and items. our notable line fees net final reducing were offset costs adjustments $X.XX Page litigation excluding interest the relatively applicable both and of The document, increased of by the on nearly billion relocation we but down the related of X% and current number up prior net in in other the headquarters quarters the on And on $X.X revenue losses increase of net expenses. $X.X shareholders were revenue partially was quarter tax excluding the XXXX, declined X of of down to share. the of in up, generated expenses quarter were of share Fee billion. billion XXXX Total income from the driven Underlying earnings notable per $XXX earnings were were year Beginning fourth sale million. with was the flat. investment XXXX, sale our We and financial technology. other equity included common notable foreign items trading that, with items. X% gain the share $X.XX partially and an slightly, severance, notable million by equity to and highlights of that $XXX offset quarter items by a investment to XX% litigation fourth Net per the exchange by in Expenses of and items earnings per

return a pre-tax equity maintained tangible on to strong have common and solid margin. continue We a

over just for of In $XXX billion capital the $X repurchased approximately shareholder XX shares fourth terms we in quarter. dividend and returns, paid million million

the reduced of shares XXXX. of number the beginning by little outstanding have We since a over X%

the through in we over billion is approximately which full of shareholders, billion $X.X of XXXX, to share For $X.X $X.X year returned XXX% billion repurchases common earnings and of dividends.

strong. on remained now Moving capital and capital to our ratios liquidity Page and liquidity X,

strengthened equity the our and All $XX.X our since billion capital the year the key X quarter. XX.X% under of third of CETX totaled ratios Tier were advanced Common approach. end the at of ratio

would LCR basis Our the our approximately the XXX% fourth XXX our Including SLR SLR was higher. in points the was have recent average of change impact the and to X.X%. quarter rule, been

net almost my X% to interest the on the X, Net revenue balance versus sequential sheet revenue up third lease-adjusted changes. Turning will highlight $XXX was in the the quarter. Page million, interest comments

on mentioned and last have we we XX for or optimizing our focused deposit the have base growing so. been As previously, months

to For deposits. clients to management example, been with their working investments on-balance convert wealth from have sheet sheet off-balance cash we

been have about escrow in have and teams focused other targeting and additional other while deposits sales pricing. being Our client been businesses opportunities attracting on we disciplined

the was macro to of of these versus The the episodic. drove that the outperformance activity result. year of the few our some and expectations the last of initiatives All some in factors it weeks came and contributed

both non-interest bearing interest-bearing across Now drivers, our increased as businesses. at look deposits the and you

interest interest rates including quarter intermediate but increased which The some not the to balance decline in end targeted activities, assets loan expected and Fed The we on as rates the non-interest other rates and cut episodic interest to of helpful, that yields were third at the non-margin on sequentially. as due short-term in other in interest-bearing the loans in long-term QX. had and Margin impact driven do was in and October. declined portfolio the increased the portfolio, decline to and bearing again earning yield assets the balances overall short-term a securities rates continued to demand. client activity of and loans, repeat is increase and related bigger corporate The modestly. Some expect by earning our actions deposits securities

We yield portfolio securities also The costs. rates lower the partially by funding made forward. reduction our asset deposit other enhance minor going adjustments yields should that to offset was modestly in and

from year Lastly, at reverse retail from credit end. did benefit the we higher in deployed we end spreads the our activity modestly repo at of December, money in business levels and

rates repo we were again Although able pricing were lock and some over X%. and to year in ultimately to We don’t expect year-end repos normalized, reverse repeat aend between trades in QX. X%

quarter. activity our flat the in lease-adjusted NIM remaining basis margin at in resulted points interest All versus net of this third XXX the

if opportunities interest and As we’re we we’ve said to will are revenue not in even accretive. NIM the risk on advantage higher driving net continue take past, low they of focused

some interest gives versus quarter. the more the third increase detail about the drivers revenue of net X Page

client You and offset in funding This interest revenue. our the higher lower the decline asset assets, earning volumes, cost earning can net see more increased yields. benefited deposit interest interest how than

due reflecting Page the expenses. were X headquarters of details with of impact the were in expenses associated On of fourth primarily a is The investments lower and the mostly of in notable to X% technology. continued And quarter our $X the basis, litigation. down relocation excluding billion XXXX up expenses consolidated slightly. items, decrease expenses our

X%. Turning revenue was XX, to total Services Page Investment down

Assets reflecting client increased year-over-year under XX% to custody primarily market $XX.X values and and trillion higher inflows. administration

partially growth the AUCA course reflecting impact net to the X% revenue the revenue of did $X.X and lower market higher levels Within down exchange primarily year. see organic of asset Although a revenue, servicing, driver, equity good throughout higher offset impacting bigger we the volatility was billion, were markets. by interest foreign

Asset servicing were up fees slightly. in this business

healthy. pressure. down pipeline exchange to an in with active and The clients acceleration lower continues Dialog and trading are volumes. revenue, was remain foreign exchange X% pricing other Foreign seeing and due we remains not volatility to

as In was Pershing, was and revenue. as interest in revenue. revenue. business up reflecting Sequentially, and was net revenue $XXX X%. revenue. were interest higher new which net client Collateral to higher of in on-boarded X% revenue. was to lower by volumes, were up and collateral million, The partially Treasury clearance million X% which $XXX Clearance trust. management lower management cross-border were collateral settlement lower to fees receipt total flat partially revenue offset which tri-party revenues at offset from Clearing lower as offset by assets Services reflecting interest mostly Treasury up clients, up on net were activity million interest by X% activity depository due down net and depository Management growth driven Average corporate Services X% client was $XXX decline revenue net XX%. million. payment revenue by offset and was up balances Fees Issuer fees were to revenue receipts $XXX fees interest from client services was in growth timing higher activity, well the in by up and X% accounts existing lower

that Page investment comparisons business. revenue XX summarizes affected key the the our services for drivers each year-over-year of

Page Now management for XX X%. turning investment was total revenue management, to up investment

market that slightly trillion was in assets of Wealth U.S. Performance Asset down higher fees a due the management We from by and impact offset year-over-year one values market million of in is offset The increased management and outflows. primarily was of $XXX the by lower year-over-year quarter sequential weaker of outflows XXXX, of impact $XX assets to income quarters assets. AUM under partially XX% offset the of partially XX% quarter dollar $XXX lower impact favorable fees cumulative higher hedging due had the while. overall negative managed offset fourth quarter X% UK values primarily the management client outflows X% market the which of year-over-year and were grew fourth our fixed equity than were up to the of revenue net market billion to up more million, revenue down from $X.X and reflecting net year-on-year. the markets market was stronger million, impact which of activities, by to XXXX. interest higher reflecting of since benefited values partially revenue values, higher $XX the

Turning Page sale total a to offset on gain security our referenced increased, previously portfolio XX, losses due of the other equity segment revenue were on that investment, partially the rebalancing. net small reflecting to the by

on questions, few it about are to Now a before thinking minutes spend we just the XXXX. open quarter we will first in how I

to As revenue due was I balances. quarter mentioned episodic interest fourth expected net better part some than in the in earlier,

point this lower elevated at than in the non-interest-bearing in are and the December. interest-bearing volumes levels So both deposit quarter,

the lower revenue expect to expect the be going our on yields reinvestment net a with little will X% yields, We down less in continue that we down securities than quarter. therefore interest and portfolio sequentially first

quarter. revenue net that of deposits curves the significantly more a balance remain impact change and portfolio become the into if stable and in reminder fully of steepen interest incorporated lower the forward little as don’t the securities approximately the expect mix stabilize We And each year XX% that and and results. would later sheet of re-prices a just rates the

to expenses, the in short other to investing income consistently keep per that We quarter. the spoke they’ve Todd been being between or be for off million balance in $XX increase to pricing. reserves that run to technology. to growing any in and importance given to year. sheet deposits, optimizing the would and $XX quarter million relationship on hold With be expect will our may investment not of excess mix in would regard the deposits, about mind disciplined level of between actively should focus The historically offerings, and helpful continue the the about Fed on correlated actions as just We

level up investment calibrate can the year impact if We the the pace to. full investment is of of from will related expense. of our lead expenses overall we the that approximately point items. Included by expect increase up will notable technology from excluding pension X% for We year-on-year, need that to basis to to be XX XXXX. This XXXX accounting higher

retirement-eligible first mind won’t similar which expenses charge lastly will that on full take the quarter keep impact year sequential that reform we took XXXX. over be the front, so for reflects impact incentive regulatory the the on of Now quarter, by year, entering proposals. place the year’s point, long-term expense for we run rate currently full-year the employees, expense are approximately And acceleration note the CCAR in XX%. we in will until that will quickly in the actions severance compensation are we capital the the the staff see of effect fourth the impacted be process And next steps last this effective and be rate to growth. will and tax expect At awaiting XXXX this will

will impact complete. direction by the they the be We are when continue to final see encouraged discussed, being outcome of proposals the all and but we

operator, the for up that, questions? can you With please lines open

comes Thank question the you. Deutsche with of Bank. ahead. first Bedell Brian from Instructions] line Our [Operator go Please

couple in Great. the release that morning, in if we And just real the the as – structural expect you of into technology Thanks. it severance back you guys. expense the talk litigation press in how think next base then XXXX between just ‘XX, the bifurcation over about to the Maybe the reduce see investments years? didn’t even on about quick, cost the expenses can and fourth trajectory quarter. and and Good I you

it’s Mike. Brian, Hey, Yes.

in first the the the disclose So, split between we number on exact two. the piece didn’t

good by the get the think severance the staff the a the third sense and of looking can quarter. difference at versus you of I pretty expense magnitude

probably the number. by will there. So a was the The severance in good you give sense magnitude piece far bigger of that

both As it’s I did items infrastructure year of you as more our the really for think a we build about of to that we And in both across just operating even Todd invest than important sort would is range businesses. mentioned, out expenses, overall to continuing and XXXX. expect this

over our very the seeing some And And the capabilities over agenda list a We cost a that sort And you then of working Lester and last just large of have get as efficiency we as going period imagine, down Head it’s new I Owens, chunk programs into suggested can in there think you of of come are executing. got announced side on long and of are those continue couple there. Operations, and we P&L are you time. the have those clicking released to building of of with weeks. of sort even benefits list of the a the those is

the get sort said will And of benefits we we significantly agenda in them of in and overall and can them XXXX into ‘XX. of some some of reinforce already you of that will So, focus. P&L what increased of we just of we that’s the ‘XX efficiency as ‘XX remarks, and as in in get sort spend those through exit Todd see result the down coming his investments a technology will I sort are expenses

Okay, helpful. on million, way actual fees least And on moved been clearing, just the Thanks. service at clearing online given strong. $XXX the and have have brokerage the DARTS just in then industry markets pretty of the that’s

line be the stronger in to just sequential – would little expected a that If basis. have fourth bit want a I you to on quarter

what of there within that? upon potentially is expectations that’s call what here? picking talked given that then are And strategy, market term consolidation the maybe the out about industry if in can maybe Pershing anything depressed maybe longer your you share up So, you us RIA

Okay. take it. of I some will

we differentiated provided kind got open corporate investment integrate front that have have we of are And a we the piece? terms dealers choice and don’t of take related I the best-in-class is ourselves, and broker mean BXB to serve office industry Pershing that’s different, terms In kind the little of whether because more system. second at why how consolidation of to the and RIAs. platform we kind or In of – that, we we look the I also ability because

mean the is far in to just is a I interest be of have goes position. So by that a choice and consolidation. it will it make just I as long-term What opportunity. makes for opportunity. now, Right that the as it at in the that and seems alternative an preference. of our think desire the Probably choice that clients an providers better we it, lot as look us of the more There puts in more

to are As any... are we pretty new as I won positive some implementing. growth, we we I don’t business revenue the seeing Mike, that think decent some meaningful there have know have if you

Yes. stream And I are Brian, just revenue yes, commission-based am – a we our not on revenue stream.

we the the a through actually And line executed. most transactions of of puzzle are of the on is clearing so not revenue come that piece It’s very getting that see there. services the fee small number based

revenue as between So the online in brokers. you see you activity, same some transaction stream won’t the correlation might of

And pretty pipeline got there. we have a strong

to continue win We new business.

as both We sales in side the on as as are well capabilities advisor technology the differentiated we deploying. as on our with we are the the side investing the the sales branding are institutional and well of some team, that

So, pretty business. about good we feel the

Yes. Thanks very much.

you. Thank

line Brennan with go Our Please next UBS. from the Hawken comes question ahead. of

taking on Good expenses. to a I couple morning. just Thanks for ask first wanted questions. my

growth X% or of guided less. guys to You an expense

can a So, big delay you help be there Thanks. benefit? that’s that to going you severance us least able at greater. expectation the therefore a And you there be growth to why operating is understand be on is to to the X%, leverage such picture maybe a going expect and are little revenue deliver

Yes. and Thanks a take Brennan. then start provide little more that Mike can I will color. the of

operating to In will much anything going in right technology leverage we as us. longer to terms have mix be is really we the think environment of make now as delivering that driven as the positive by benefits continue to revenue term investments

it the had… So, know would Mike if not think near term. certainly don’t I challenged very I be impossible, in it’s – but

And the earnings stabilization, though Brennan, feel bit think growth. amount drives I the get of NIR we sort we significant of growth revenue once of still model very where confident of little do sort through

we think happens sort so you, into that And that, assumptions some that later the And we of I confident gave feel should of still I that we back the as coming year, still think that start stabilize to – that’s this picture. think I mean, once very which mentioned see NIR under, we then you holds.

bit line which That’s some levels, fair. is the they some there bearing coming rates were on and like But intended seasonally interest more and have a with little December talk I as that like – typical? give the is this – color some probably that stability do in from know pretty and encouraging even you trends non-interest said signs market, down you in there deposit some that Great. those well? help that line efforts durable, are And on little growth Can trends now here specifically maybe to Mike, think support growth point, there more deposits. are down that the how we should us you a quarter in – on sustainable you

we it’s act saw this after I think of to It’s been go where and significant going on but some out parts targeted intentional we and an example predict in sort how target transactions where the And that is I I and the bearing a of will and to Yes. last while of to as hit points. so they there going And part they was as related are of all were to fourth the our I escrow after the sure for activity have opportunities to episodic deposits. going includes on script, very come, now activity focused go piece said start my trying we to hard come when sort non-interest that in that make with are an there quarter, there. those But opportunities.

the As and I a are sort the macro play will think of be helpful we think. of let I to you forward, dialog have of level And path we the a environment of sustainable encouraged think and it activity certainly should call seeing. sort longer trend, to by are about we the sort bit out little

is impact to guys the have on picked to positive. Fed’s the balance the then it on Yes. rate-driven. rest that and of be us is And and likely going And also could that the correlations you up have on somewhat sheet be

in a So, as is potentially if move could in environment, category there that it the change rate well.

Okay, thanks for the color.

you. Thank

Our next Please with the of question go ahead. comes from Stanley. Morgan Graseck Betsy line

Hi, good morning.

Betsy. morning, Good

investment it’s to two highlighted and at where could be I most part to should you variety asking this Todd, or of growth. to beginning in you important most am wondered as you? forward you areas deliver to critical us a one looking I areas for that is able And give that if deliver question the growth the spend for the understand what sense context the are year? the a

Well, I the think coming is the kind investment Okay. board. of spend across

are and we spending stronger infrastructure in I of – increase the bit our building talked about for provides an services. resiliency, little quality stronger which So, just just a

which We a capabilities, differentiator. investing I think in are integrating third-party a is bit of

that It’s better investing business operations difficult and thing by we and covering for clients to are and around clients positive capabilities scorecards great the improving service is are to important starting and to most leave. retain on from The an that see providing in We our increasingly feedback us. the that keep service.

things three that Collateral initiatives areas the we most might in to kind Management. have about areas, focused. Clearing of there are – four really drive are we is and of where In three One future terms revenues, that talked the

collateral of will in benefits that can globally. think have what year from global much the more to see been in are those which So of in And as we and probably building clients – their some that we kicks think space. our That’s some pickup a managing make starting interoperable of we provide the to an services share also market or but before another some that now. result, we the tri-party are two effective I bilat system, traditionally really

with other trillion and $XX management. is increasingly of advantage build. I One data area to data analytics this under name of brand our focus and around approximately We Eagle is is as our us – competitive old of have for currently analytics. the think capability. And be Eagle under we going the an assets

have on to will the we vault, capability deep around and an we to got we call provide that’s ability data will have we our As growth year we this – and on that do do platform the data for exciting think structured platform. our a clients what built where we see analysis

as are a the have management And Pershing. talked bit that making investing at well. little that’s wealth we more We we about are already platform, investments in our long-term

So, I terms are would is. my say focus where in those business four growth key of are

it. Got

helpful. that’s Okay,

some I’d think the grow. that Yes, on each each is think priorities, part still said have opportunity we bigger really the to echo that the of of I feel I but do what – good the businesses Todd

them of Some bigger require investments.

them of Some smaller investment. require

so we each think to I focused them advantage of we on are those opportunities. really And take of make sure

are intentions and chime too, thanks. will then or be on under can but think that. I asked capital highlighted for the your specifically have Okay, the prefs SLR know Todd what what X.X% you up the or many I on new in times And I X.X% this about there. that you something Mike to call like

to I if in, in? opportunities Now rule little the speak am have CCAR more And set bit that have came maybe the sure we it capital you to the could to efficient SLR there. final not wait until has become a where you given what

you know, are SLR, in of of think piece is Yes, one the look discussed contemplated. rules as and of of sort puzzle the terms sort Betsy, that I being

so, capital we picture have all really the in before at buffer need related that on look the think it the process stress all around work rules going I to do we are stack. still capital a pieces a optimize complete and of are we how And to of

Yes. or do you the have stack repo? balance size, is in for sheet the it it of the call to better sponsored pref capital for full example, a utilize increasing to And better is

doesn’t have for sponsored that Well, impact sheet. size of any repo, on the balance our

to so capital to need advantage opportunities And like that, take we that. do don’t of

sort hopefully capital sheet next options stuff think focus it I we will sheet look And at figure more the out going is stress to going to over our grow rules. of and that on So few comes of the months. us into are of CCAR capital opportunities the our at I the are to look on given sort as you revenue from new balance grow what and is hear we where all of to to sort and think the the opportunity keep balance the side

be, are lots discussions. don’t going Yes, bit going point, and what rules to is just to just at be a little things know exactly it’s we follow challenging, this obviously hear us. say to impact don’t different because we the we precision to of we enough But have the what actual

have that to Do to for alright. set or June? wait going you get Okay, CCAR at think you rule you are

I the answer. think knows, that’s Who honest

notice come when are so… got and of rule there, finalize as out see then think clear find CCAR, have NPRs the I going to out will the how rules we we all it’s out they in they – that much the of

got They on... get lot to

of period short a time. In

Thank it. Okay, Appreciate you. alright.

Thank you.

question of Please Blostein the comes Alex ahead. line next go with Goldman Our Sachs. from

Good morning, everybody.

of just So couple a follow-ups.

me kind are I to core is XXXX in number talking the one you growth you report base what So of XXXX? $XX.X clarify of let expenses, about guess expense just guys billion the on Mike, about that

X. the Yes. Page press Yes, in release on it’s what’s

of And when Yes. about XX% to want that the guys get make just in so sure keep basically in XXXX. tech overall income rate you range? to reengineer or XXXX below XXXX. that growth savings How expenses again do talk sounded in much then how had to just there statement the it like the was trying I through running you expect for you X% need a of growth see billion much flavor spend, guys kind $X all do to and is we a the to for a

the P&L already, it’s most Yes, of Alex. through I – running think

most of P&L. XXXX, of kind So through look for it’s so

exact up, road through pretty efficiency So confident sort and couple making we percentage over others of the to gains we don’t are we next these we of there like I not ahead think the given but go have that a those sure deliver get you going think we increase I still are efficiencies as and years. feel talked I to time long of generate can we going investments you is sort that’s we over are out we think consistent about that of And have are we to continuing go. – as

I again really bit done, My the had some surprising number both market a also given question this provide maybe that of a despite what second market strong flow out so of kind performance of delta Alright. market what management was the been outflows. what’s has little color cash a look negative at flush been LDI then driven business, in the dynamics, and light I had and flows trend which and little sizably industry help fixed so asset quarter Can when the obviously income the this the in driving then kind around think you what’s the also management quarter?

know you Yes, the think a happening line were sort we the and straight that in business. feel invest right to pipeline got that sort in have sure continuing capabilities of manage their of make I been of has sort we and there about sort plus they their way going thinking of it’s outside look of be UK how up – not liabilities really – market have market. pension through UK And flows in are in they still unfunded the business about core of lot as to we of their bringing been in that that commitments in people the to and about sort the sort good

feel what space. think are Performance We doing. good about I LDI we still they been good the has about So good. feel

largely don’t any really, at about all. we management And as of in space really have it’s the you And know really asset set LDI our business, we just more clients. concerns institutional don’t so broadly

given are quarter. of reasons have look sort going for chunky some you as so flows you to time-to-time And from various at any

fixed point trend that issue about. is core that a it’s or side, concerned to but the nothing obviously income core are underneath And so there we the

Well, in then impacts I bit impacts question were keep been I the it where and substantial to different you the are a UK and around equity think a domestically. market fairly would one have the exposure little also than the have we mean, a things – they of had currency mind, to

So there. thing in I that’s one would throw

need and to of terms disappointing would we to I In there. better do I think cash, that’s a work the a little say little

Got it. Great. Thanks very much.

next to go line [Operator the you. KBW. Instructions] Kleinhanzl with go Thank Please Brian ahead. We will of

is to Yes, deposit optimization you question like still to from there of runway you good far it just that sense the in deposit optimization about, that is Quick or you over sounds of talked how on are did that trying it a here? like along get a the morning. course process, long XXXX

think, continuing I a it’s – we to Brian, optimize. are

clients is very sort with and this that, a client-by-client it’s conversation think of I So, a a dialog granular it’s dialog.

and we have we to we And have to so have go to some we make progress, footprint are but more made got the optimizing I think continue sort sure that got of there pricing so.

have concern the is separately, there versus any Do Okay. kind an not of That update or still give is on way way whether offering moving third-party is moving. industry, it’s solutions? And you some Aladdin then any the to proprietary across forward, update the Thanks. how there?

Sure.

say X partnerships We coming past number two I flavors. the to have really X are months. of would they over been building on And a in

systems, referring our management SimCorp. of with where the it where order have ones of already Many the it we process first Aladdin, are some the mutual of have is of up. is are The up and and one to in connected that leading you signed signing clients many Bloomberg

we got got we So, where rate common clients. high a very success have

other The doing because is other see thing to we of doors for this. is us that clients to for gain conversations where our opening able efficiencies

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that everything we doing is type other fin-techs. with are The

provide announced alternative few, we announced for independent And funds. so working we we just fin-tech a are week the this where with have to one quite NAVs

it an contingency as provides serves as both the the enhances if a as control addition – in in were of NAV. this function there and oversight and problem So well a construction

have with partnered them. we So

actually been our clients too but implementation to have use the found looked of have them, would Some they difficult.

And a we as so a piece just service with doing scale implementing of as by from software. providing rather them, are well that gaining than it’s partnering as as

attracted that’s quite week. excited So bit this already a we pretty are of attention

thanks. Yes,

Thank you.

of Our go Research. line Wildhack Robert ahead. Autonomous next question comes Please from with the

Good morning, guys.

you seeing –you the until the into impact that ask said wanted many you have system. there Thanks. long of see Just on quite the injecting know Are impact and question balance can how numbers? significant and either how reserves sheet we kind of to way,

but sheet that took look to whether look Let back market me leave balance us at be money very, It’s depicting and even. that determine. and to look fund But Robert, deposits, particular is to that piece. extra place single see and to into you probably was a you very like you sheet to Fed’s balance why a the there balance decided for identify the that historical it will countering at or a any that so a difficult, you cash hard basis little our incident related correlation, able is take look just day-to-day you sheet if on at at trends

to it. are that? there out still of anything Is add to We

No.

Thanks.

I that’s think all I had.

Thanks, Okay. Robert.

And Vivek go next our line you. from the Thank with Please Chase. question Juneja of comes JPMorgan ahead.

Mike. Todd. Hi, Hi,

Good morning, Vivek.

businesses, talking lot into from spending competitive of need some standpoint know you you a give think Which where have got you either can need, areas, because of lot – more most to you do are so can sense the you a or of from different catch need standpoint, but Two at I up, lot you business aim questions. businesses a of if businesses? do obviously business

list do actually this partnerships I good And are ahead that capabilities the of to think of differentiating you the and we the Yes. game. What of willingness going walk and best-in-class. pretty back trying some to we are are integrate to get whole the with to if we just think in of in trying about things is through shape. kind

application would be always the flexibility. not and to provide able to to deliver are clients going best want We our we

very at when our a market that asset in it – are we made investments gain share good over when able lost we business corporate holds we and We starting we some servicing, had to holds little So at trust we share. Pershing, look years. back look are market the

We there. think can we continue wealth in continue to I better – do I like where we management, are

think we I matter breakout, So, are I – this out. think of is non cash a to trying

efficiency room for and there yours, to on? when that Yes. We not, it, improve out? see they start room what Is that is spend, are can they of of peers what to to and are we of the others are is trying there tech the flatten flatten do to we hearing if shift you mix hearing from spending are from that competitors

Vivek, Mike. Hey, it’s

in are apps. underlying much sort about already XX% the the to think investments number And over that are as so driving about there we of the of make another application, investments making. in that the as cheaper, we set and it’s we spend reduced in next our his else are little and technology reduction is want you highlighted by bit so anywhere in spend we focused these as I makes coming, in the more and of we efficient, make of Todd efficiency and where we infrastructure faster script something XX% XX% our are a apps it seeing company

or this range think out to look you margin with you where a of all get have you can we two? as spend operating or something tech So, a on do year

implies medium-term haven’t and able be a point. through will a the margins, think expansion view at of on in growth that Look, But you earlier, operating said Yes. bit feel do – of I a revenue I get significant deliver little earnings we for where holds then growth, pretty think we given revenue we interest still go-forward confident on Vivek. operating of model that that as sort amount margin as we net to I short-term the

of sort I think that would model just I So way.

now a – couple gave way good of guide while is you at sense a think Day Investor think ago it good still ago a I to the probably still. we about a years

reverse balance pretty have way we is quarters. think should the fell drop? One the Mike, seen for on the level you one last have that it that, your lowest five yields we the repo – sheet, that you, How ones sharply, – about in

the the Fed again, September in – repo those peak spreads drivers. two The in Yes. and reverse September happen reduced didn’t rates

with the since rate arithmetic matters, the it’s I but Vivek, but matters that’s repo consistent, but] and in spread been know activity do spread we in to look the we an at a the that but like the matters, reasonably down, generating way are [no That spread the down. third there, spike unusual novated size quarter, then saw ultimately has the overall market. you we been

Thank Okay. you.

line with Thank you. And the Mike Please our from next question Wells of Mayo ahead. comes Fargo Securities. go

Hi.

apps you retired more them? don’t And XX%, of total is percent go, web-based versions having mentioned I the have? XX% completely You of that think number on are retiring apps what’s versus desktops old what code support apps of this related, and to you but

we making of efficient inventory of in actions. applications. And pretty some ourselves by doing of infrastructure have – careful But number sun build-out those to one believe Mike, that this the got. the I of of total to we we disclosed investment got settling resiliency is what we am with obviously terms total don’t also in apps going have Mike, more don’t or in but a apps disclose number those really the have over we of are part turn I our

and so months. that probably are am XX And pleased that the of to now will I so XX or to closer another we XX% have got over course out probably next down kick the XX% XX%, we

specifics terms I those are really of in of So, into apps where can’t get the base. what

always our being Mike, I way that the folks something and using have – across work. there are external that many I year, apps am sure improves those think gets in the way think is are and or to of not the modern either assume continually think are am we and better the should that’s folks all it, – getting always folks not I right that’s every but – – they that apps, I of you not Yes. weekend are about rolled tools our are that we that suite product out investing to web-based internal

So, have... we

Yes.

of terms rolling out the In are of office cloud version the productivity Office Microsoft’s XXX. the most – – we tools,

get more it. One million developing operations. that of also We client e-mail things the around doing each X our year productive we responding in we is over to are AI that making inquiries and are much

continuing are the invest to build as think well. help in we productivity we infrastructure I are will do lot and making that us So, that a

am the do so when X that billion then said sure come it technology, up I you think you investments? curve, you just at follow-up, was you spending like to more think that number do you up or if if going speaking, do when side you of one with And generally what are down said willing to turns you so? And $X J just like the going in X that a other or years it not year are years? Is if these

the Mike of might get me Let through one more make to want comment and detail.

you to spend the of want go share you where on don’t we although quickly a growth if have As over curve would rate bigger rate is because of has the bit past know, how it’s Mike, come down the infrastructure? the amount up but down. base, probably think I X really amortize little say up, to slightly through I tech J a come meaning has continues picked the total the years, we

it. about we we sort do of are people the think the Mike, place What importantly number. look execute are are year can can business I have to each to to on is Yes. And like about certain way not it’s we spend think them. do a in we the spend what are and we how going it we mean, doing actually much cases, get shooting the return execute, is like think successfully most I we we how at tech looking

I all that that important to driving think years have to is mind and sure now there that that’s bottom execute and deliver got the balance thing trying well. And most sure investments, making to forward. think we on of going we going that’s we make constraint what’s going it’s so we to as are us our in bottom And doing feel line well the keeping right line we got right in we those find the I stakeholders. that’s it to continue – because be differentiate the can are by to make – have to that

that’s so year. much way about And are the given sort we to go in how of spend we any going

Yes.

really a good it’s So point.

as the we year, look it if will want So but there I it was not right spend we because believe next down, we predict to out to an ROI on don’t this, now is. bring

Alright. Thank you.

Mike. Thanks

the that’s like looks question. everyone. Thank It Alright. you last

talk next to you We time. will

Thank you.

Investor call Standard this you. X replay A of PM will good Mellon This Eastern at conference call a day. Have concludes Relations Thank today. webcast Time BNY the webcast. o’clock available today’s conference on be website