The Bank of New York Mellon Corporation (BK) 12 Jan 242023 Q4 Earnings call transcript

Good morning and welcome to the 2023 Fourth Quarter Earnings Conference Call hosted by BNY Mellon. [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 Mellon's consent. I will now turn the call over to Marius Merz, BNY Mellon Head of Investor Relations. Please go ahead.

Thank you, operator. you joining thank and afternoon all us. for Good President Executive Financial Officer; here with Dermot Chief Vince, Robin Chief I'm and and McDonough, Officer. our

earnings which about press contain those the we financial like Relations our results to projected usual, reference financial may our on can available and in these Information bnymellon.com. I'd statements from presentation, be remarks statements. non-GAAP that are will Actual As available website at and found materially financial differ statements Relations in page and Investor forward-looking will the release, supplement on note all website. page forward-looking of highlights highlights our measures non-GAAP the of presentation, our Investor the measures.

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

deliver of thanks having Good We higher some challenging of started macroeconomic the we us. solid laid evolving near our of We XXXX the detail. in to performance resilience, medium our our our restored to our quarter clearer XXXX a basis, improved focus multiyear margin a today, and on overall. excluding Thank and term. With to can year [indiscernible] marked back XX% monetary $X.XX we characteristic not by plans, medium-term of increased targets and the early of long appropriately and operating financial priorities, Both and our highlight that strategic deliver confidence earnings financials, uncertainty when core our direction and in me address show you, through increased each a leverage. we by organized the only year, term. we travel a fourth everyone, in equity for we EPS reported our performance tangible for more and segments foundation business year-over-year. targets the are are clarified execution year-over-year. firm transformation On company clients review strength for items, a which Mellon's and common on for fourth our geopolitical let ability evidence per publishing XX% briefly on in of basis in they Marius. policy. Dermot tensions, quarter environment our BNY with navigating focused. On our close on joining but financial a in share and first significant outlook demonstrate afternoon, But some will return financial notable The operating supported the for pretax a

we improved points percentage leverage. items, XX notable generated basis and approximately Excluding XXX of roughly pretax XX.X%, X.X to XX%. to margin points operating ROTCE basis positive point improved

beginning At XXXX. Moving the last goals year, on to of Page financial for X communicated we X.

interest XX%. XX% to generate First, year-over-year. We net approximately delivered we expected growth revenue

We delivered set out we earnings our XXX% growth, Second, in currency X% and to items XXX%. third, approximately to of we expense And through rate XXXX. to year-over-year buybacks. expense of dividends constant excluding shareholders delivered X.X%. growth halve We north common to XXXX in return sought XXXX notable

us Though all affect Over can time. wide a returned our past positioned them, commitments gives not but confidence further of we year, of that meaningful the at change common consistently and to our we to financial our and course journey, exceed just range deliver strengthened billion of ability our the macroeconomic to this capital well for to shareholders while performance beginning XXXX, our regulatory capital be of are ratios $X.X regulatory outcomes. still improve transformation having over we on

results. and our of as people effort XX over we a accountability on ahead us. that of is the which proud mindful, months focus a embraced these drove the commerciality, there work While in lot put more I'm last efficiency,

our which get committed are at this financial to with of and on we these X They operate work we the it strategic number and two, rallying improving managing their heart our in our around for for we who long have be pillars how keeping pillars, are introduced X. Last we to people describe people simple, clients, three, and day-to-day firm's money, it framed X near, performance term. the the we deliberately and power number clients; And better; medium them. Page are We for company one, year, Pillar our moving number our run our more safe. culture. and are

we I'm doing strategy said in Actually it which but by before, I've some Slide lot. and XXXX, matters progress set how do a on words. made of the of we it encouraged As is X. important a highlight ultimately just we

governments, across partner corporations, their there ambitions. alongside help and is mutual to more financial with Our for them to and we trust individuals services do endowments, shows more unions, achieve our firms funds, pension business to And clients global as to want funds, analysis us. us continue do with both clearly them

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as launches. well beyond the of product solutions includes far trading buy-side launch visible platform advisory our more it that as wealth of Pershing's But the course, rollout offering. goes Wove, these Of

who examples. Officer XXXX, bring our than the ever to bringing the same FedNow, new Last And Mellon market. before. At Bondwise, opportunity client All repo Direct, on operationalize us service. BNY first solutions initiative filed labeling currently Liquidity use real-time a the Bankify more just organization. XBNY to in applications are Chief BNY single we patent white we an for Mellon we are our payments have our as settlement Intraday to more of of businesses advisers all to hired began time, year, we clients across Mellon Commercial

our multiline of and scale, integrated a tooling. coverage facilitate to implement to formed at setup enhancing solutions we created of also business the client of part an organization, and As consistency approach and group team in focus we practice organizational coverage

platform's year in us XXXX bureaucracy was which took of journey points were double to what our allowed the investments to to pilots self-fund the prior the and go we efficiency, a proof we the be more steps start company efficiency generate incremental model, business while we reduce as We the transform a more Next, the improve a platforms streamlined toward be which with And of needed nearly better in a to next over over of multiyear X amount years. versus so important model, spend running including important the we effective organization, several will operating power and foundation savings foundational year, investments. our successful intentional couple to unlock of billion how in of $X.X operating areas transition in to our laid to phases further.

an we grant elevated work clients We the without of program part previously XX,XXX of more employee cascade recognizing our of confident to I strength resilient class our double proud for recruitment our BNY their is both people. important people, benefits, we're right humble the focus and enhanced ability company. our of a more to why for value While we across none out execute are is clients, wrap double achieve. grow in compensation and fostering we deliver their in on campus the needed, Mellon we shares which our a culture are excited welcoming culture, and the being it our our got company that to to year human and in strategy high-performing year, sense environment. I'll can and we up assembled But we also where shareholders powering in year team for our and to running ourselves where what happen value and didn't and need class employees previous including of this to launched us was We ownership to pointed place to a the our our and history, what largest analysts rolled know BK unlock better, of it being work careers. going mattered. direction help retention where We who BNY remain size stock which receive to shares people our to our of programs, on we was the a year. the it a accountability Mellon's began. can in and And XXXX make again as

a of what we of a see proof we of work a started we now what While and belief can theory early has points, has achieve. can possibility lot the ahead and as us, have

it continue We ambitious ahead. With move to Dermot. opportunity agenda but about the we that, forward, be have I turn as over to an I'll optimistic

Page our X outlook on goals. I'm you, also Robin quarter. financials our noted, and on good everyone. the Robin, as we execute afternoon, to XXXX the medium-term picking for with how up to fourth going Thank our presentation speak are including to going targets, And of I'm and consolidated

was special $X value revenue reflecting quarter, related reserves. reflecting XX% FDIC and offset other million a revenue. decline litigation changes or and the For up performance investment value mix. up the items. revenue sheet X% primarily fees, fees X% $XXX decline up in is to reported I severance fair investment Total which excluding on adjustment a X% a fair consideration year-over-year Investment FDIC contingent And and X% mentioned revenue noninterest reflecting revenue was our balance by in in was a assessment, Expenses primarily a offset XX% other the notable to higher primarily fourth before. Net partially items. revenue growth size had million million of reported in reflect and billion related the Management was flat, basis, interest was receivable. Total of foreign Investment reflecting interest year-over-year fee a year-over-year of quarter, up expense in notable that exchange services and Approximately $X.X results $XXX the rates, reduction and by adjustment several special XX% we assessment. were negative in

up investments inflation, X%, margin credit per pretax $XX million fourth were commercial X%, Excluding losses for as and driven exposure. on impact reflecting reserve real for $X.XX, tangible a and equity Reported partially was was by the weaker offset builds quarter by the estate higher of share notable primarily X%. items, common savings. Provision expenses earnings for dollar was well return as were

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

X. Turning to capital Page on liquidity and

points common through deposit reflecting primarily earnings. Average inflows stock were improvement in redemption of our quarter. capital Our the be at capital as X quarter. flat prior to the leverage remained precise X% $XX.X remained essentially capital X unchanged, of an Tier ratio and and the X% assets Tier largely in shareholders AOCI distributions million sequentially, to by X by offset to $XXX down impacts generation compared of basis preferred billion increased fourth

repurchases, our was basis a decrease, capital X in percentage approximately CETX of roughly offset XX The which sequentially, by operational stock share with in CETX capital ratio capital prior are to million impact the considered million partially they through model. we of inflows which generation quarter, quarter. increased the through prior Our $XXX deposit returned ratio until our with X%. Consistent AOCI, consolidated XX.X%, And of at seasoned paid distributions by liquidity point unchanged fourth $XXX XXX%. represents net up nonoperational funding sequential improvement ratio the quarter. reflecting a under was common common reflecting earnings and XXX%, shareholders compared remained the our primarily Risk-weighted the to shareholders. assets quarter, X% point stable improvement capital primarily coverage common in we deposit and the are dividends consolidated was

X% X, sheet average billion August, Interestingly, to Next, deposits of primarily up X% seen sequentially, in total and and fourth X% up Page by averaged interest since were $XXX quarter-over-quarter. net balance trends. balances. growth up X%, Net the sheet strong finish mix. was balance noninterest-bearing on in details deposits growth and year-over-year sheet the underlying X in deposit year. Interest-bearing we've up Total quarter, flat. deposits increase remained months changes a The consecutive the sequential additional on was revenue interest $X.X and revenue billion was balance driven

engaged been for on-balance seeing our the we're with liquidity we've sheet Our by demand team clients, is highly encouraged and solutions. our

financial While we stabilization, conditions and we outcomes are remain pleased of with preparing in for vigilant a XXXX. this variety different

and reverse asset by of decreased quarter-over-quarter. by the investment our sequentially. portfolio balances assets and side, average securities size loan up This cash interest-earning X%. On up X% increased X% The includes repo X%

was Page offset quarter net X% a on levels, $X.X our the strongest Moving segments, and the weaker higher the market revenue ETF reported our from lower Securities and to client where year-over-year. activity. we in of fees mandates Services clients. billion, were wins business our services starting on up continued note investment flat year and ended total quarter by flat from as impact year Services new managers a Servicing, healthy inflows capped sales of mandates East, Issuer client positive with largest dollar Investment year-over-year. midsized business higher new of the new with high business, expanded activity. We fees net And Asset existing our X%, strength servicing investment investment services in X. Services, including were another Securities of above-market In XXXX, services strong business reflecting fees of growth. Within up several Middle were saw some of

expenses year-over-year, offset was revenue-related higher was volatility a well X% volumes. partially Foreign on approximately year-over-year. million, XX% margin. efficiency exchange of year-over-year as Pretax down billion net up reflecting and $X.X X% revenue $XXX back savings. the was by pretax down and of inflation, lower investments interest XX% Expenses representing higher lower revenue as And were income

services on XX. In reflecting billion, the values the higher X% Market by loss and of This investment Net business. year-over-year. up offset market services X% primarily for Treasury and by by efficiency partially million, and segment fees X% lost XX% up were Pretax a Pershing, up total increased noninterest-bearing revenue impact reflecting inflation, reflecting internationally. Net fees expected increased in quarter, up $XXX margin. Next, fees XX%, Management, equity both partially earnings Clearance X%, and investment investments partially Wealth new fees for Services pretax assets Page interest of up XX% and strength year-over-year. Services, were $X negative year-over-year. expected Clearance was revenue broad-based higher investment In reported client client X%, of approximately services services activity, were this were $X.X business. In across were the also Expenses approximately higher reflecting balances. savings. investment by million offset reflecting year-over-year, representing higher offset billion Collateral Management Collateral activity, Total U.S. income by credits higher and $XXX deposit

Management Page Management, XXXX, changes savings Management Expenses down year-over-year. receivable as revenue the the and in approximately XX%, offset and by and dollar. the decreased down flows, the reflecting and fair higher on the of X% of impact the Wealth XX. million, divestiture weaker of of the values, reflecting to revenue offset Investment in year-over-year, a income inflation Wealth In the gains and adjustment weaker by impact total as impact loss AUM Wealth dollar. In market the of business, driven XX% mix, $XXX product $X by our higher divestiture X% Investment reported Investment revenue Turning was of capital year by well offset investments, partially partially by mix unfavorable market prior value the was of down million. Pretax Management efficiency of values. higher were partially and $XXX million primarily seed

X% year-over-year $XXX items, of increased million the and XX% of pretax margin. Excluding represented notable income impact pretax an

decrease market our offset and the and strategies. management increased dollar, the saw of outflows. In even net I we recorded further regards finally, at market related assumption inflows. Page net through expenses to improved and we healthy segment. values active Page of XXXX results, for net interest special trillion shows to outlook footing, a turn quantitative determined rates, we we strategies, Other $X portfolio in quarter roughly we entering in year items intend of absence net return by leverage strategies market-implied XX% our included tightening for XXX% long-term $XXX primarily and an up set now expenses on least equity results will positive XXXX. and cumulative into from multiple to the growth year-over-year, FDIC XX balances. inflows shareholders our Management keep of by to outflows year-over-year, of on revenue of to to the of to billion north pipeline dividends forward $XXX fourth with the fee buybacks. higher the $X the assessment. Having based ourselves net short-term the break downward regard loss higher puts while weaker We into partially repositioning XXXX XXXX. With and the current XXXX. And is net year-over-year $X to billion approximately increased million $XXX ongoing on of pressure reflecting reviewed operating revenue, interest excluding revenue common for of flat saw assume in values expect Wealth under perspective. the XX% deposit billion index turn client by and to billion across reflecting $XX management, capital million we strong expectation Considering year-over-year, X% assets cumulative XX a Assets an reflecting and businesses, expect earnings our inflows from of We're of net of quarter, securities Total

As our foundational multiyear actions discussed map a earlier, financial was And We deliver ability some decisive to Robin performance. early year took for of to we've transformation. road demonstrate for evidence us. XXXX clear a developed our stronger importantly,

Over in couple a and keep slides, XX% for 'XX. I'll lines delivering number the margin several pillars, of these our next firm strong our moment, consolidated he our the summarizes targets. It term that sheet. provide but on when progress of double-click taking maintaining about and is our a impactful our our to transcend and are over a medium-term business there mentioned firm's along business targets X in our to strategic pretax actions on medium talked Robin some balance the our while the of financial we'll segments. segments teams of improve to XX goal Page our goals. to of most we're you XX% the ROTCE

a just them. few So I'll of highlight

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Our a and consistent tools for BNY make will and an client internally for enablement more roles, do new capabilities easier new, support integrated value business lines our platforms more sales assembling practice, to repeatable And driving higher our organization, represent our multiple operations span across that experience. Mellon growth. what go-to-market of to approach and business, create call the we commercial more clients focused components into client efficient and with solutions it coverage clients for and enhanced sales from better profitable

highlight uniting The our second we model. resiliency related drive to and enabling to our and is of transition internal streamlining are activities operating processes grouping logical platform's risk into similar the management. one platforms I'd to further higher like together By and enhance efficiency capabilities,

types X solution on based internal commercial platforms of is services. platforms: will clients, own platforms the to our client own the of delivery model Our delivery a external of enterprise will while

months, and approach, markets. gradual the culture. a to this make come few starting deliberate, our BNY will on developed an the be to we've new model Mellon third first implementation our past is into and impact Over this implementation financial wave transition detailed global with the spring. And People

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XX. to Moving Securities with on Page our Services starting segments,

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past of will over XX% past path XX the appreciate years, X that the XX% in performance We're from XX% to the XX% with pleased harder we've to be in months, from the the we XXXX. the improved XXXX business the but Over yards. margin

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make continue investments we including and corporate several accounting, loan that support have services, fund core platforms uplifting to in tax actions and services, We significant administration.

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strong firm in and are services, in we a custodian, from further Pershing billion-plus clearing XXXX, and our Notwithstanding market the the gains confident U.S. core financial the As of events $X Wove share headwinds platforms the segments that market. our in of the in X #X market for to top of i.e. momentum. position broker-dealers fastest-growing RIAs the continues wealth drive and near-term one will broker-dealers. And RIA a experience benefits segment the platform gain client growing hybrid investments attractive from

and business revenue $XX investment from we're million expanding new position Wove currently world. from the the of from with clients, to $XX financial to institutions, existing benefiting we're top million by platform, in Treasury of As the product data Services, strong one targeting geographic X our capturing and projecting dollar incremental Leveraging in solutions, and tiers U.S. reach new a deliver this we're clients payments selectively segments. and strong opportunities we're XXXX. In we're position,

to expected an to For share and adding Swift growth been market clients, several in to geographies. bankers of drive e-commerce multiyear with through growth the our NBFI payments platform and drive of we've completion uplift our increase example, is

Clearance solutions Treasury over can joining provides capabilities enhance it that which Services currencies, forces the in XXX the FX Collateral business, segment, by and out will Additionally, markets provide its with FX Management. our clients. Rounding

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Our Clearance business Management one company. the Collateral of and most innovative the is in

so by trajectory by management their meet new business optimization can maintain our confident solutions client across flexible position liquidity we're continuously growing to And growth and that increase continuing collateral its to needs collateral venues. mobility launching this that healthy clients and global

Investment XXXX on Next, XX. for Investment reported margin Wealth of or Wealth year a excluding notable the Management The and XX% full and Page XX% Management pretax items.

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we're combines benefit for our of importantly, creating First, distribution unlocking firms distribution power the third-party provide from products a investment Mellon's that solutions. best-in-class clients. process BNY the select offerings firm-wide of our in with managers and in-house we're platform to Most

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are ahead the work excited team. is for important today an We about milestone us, and our of

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[Operator Instructions] from of Brennan comes UBS. the Our question line first Hawken with

Really provided very detail the the targets. helpful, all deck very for Thanks love the on in that very, you very, thoughtful. I'd to there. start

more do Where to over guys going a parabolic more targets come to that you you're look that that a see opportunity. the improvement pretax first? And the curve is X- a while weighting? period, line? back-end through the of are that to strong it enhancement sort results Or see as really you going margin appreciate though of expect there is in to seems the likely profile So opportunity a of X-year resulting of you expect be straight I

Brennan, this is off. Dermot. start I'll

And lot last planning. will few June. $XX So a over of kind this of million year. Wove, the launched talked we've last detailed to that bunch which I foundational remarks, the of did quarters and take of lot revenue if to and the XXXX about made about out investments, about laid have work, a drive We've will see a was can minutes, it of million both prepared, a way comments my that exploratory just you is think talked I XX both prepared We I we which efficiency growth. We've last $XX truly XX kind year. and drive which you Robin the in over

see I in businesses where we our investments Investment you our see platforms. Management, see would lot you beginning also shoots. and So services and investments can are say we're making we're to of in security our in making a and green it modernizing segments, Wealth all of can And

And us say then get it and see you'll as time, would see I you're preannounce do going So and you quarter-by-quarter. do it over it and than myself, to to about know I it. rather it talk Robin think then

mode, execution going happen you're to this in we quarter-by-quarter. see and deliver, but So will

Okay. is a -- of Fed we more now to is different spoke. be The declining. seen far the indication last order from We've expecting environment short Everyone rates time an rate policy pivot. rather a

bit in little an averaging a uplift the saw higher see -- quarter, -- uptick though side. And we of so cost this we policy little did of even in on was rate there deposit only an a

what that? and the lower few what's how of then in captured the NII thinking your should outlook deposit And questions we A flow So on might XXXX. And drove for that in the mechanics through rate there. be how about side? policy

Sorry, Dermot.

a that Yes, for I special, yes. question, say follow-on was was going to

worth. my Got money's

Yes.

again. So hopefully, ask others question same won't have to the

very -- did deposit And balances And XX% The of very, June your balances -- NIM go thought the questions in X.XX% what think in to we coming happen. guided We rolling why say a of deposit I we is you to off happen market to tape to lines up look, in gave XXXX, in Fed guidance the bit 'XX. rate really strong was effort in new was a year that thought how a thought little we and the everybody The at XX XBNY And back and in our range, going go the of market was out differently of and rates. So there between calling was we deposits costs if on business, a look, CIO at ended market Treasurer and where to and XX%. to was Fed did for months, was for Mellon on ran going when wasn't. QX the between have was going ran our 'XX 'XX, QX for strong disconnect happen I our year-end. our XX% what the tape what one cuts with to the team, our we book. up, year. To at

and year, how good revenue. billion we outperformed $X.X we So about the very finished feel of we

markets XX% think all, again, there's talk all about So March of Fed a that. This market that, very days had in happening March. in little cut an being probability odds. too at ago year, a bit a Fed couple early. We Notwithstanding the the the of a I commentator rate we good are about thinks and feel

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Securities. Our comes of Mike next Mayo Fargo with line question Wells from the

can't we you. hear Mike,

you, So maybe we'll come back to connecting. have issue an

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the Yes, just in nick time. of

Okay.

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in So math let did school. in I me okay if see my

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do it X%? I correctly, I did up why did my So only And correctly? math if

So going Robin. from English math quibble to commentary. We're with our comprehension Mike, it's with your either not or your

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on turn So committed to we we plus things to various that can, year to we've different We the committed operating going to. we've leverage out. play that feel the guided the how And in in out ways. are recognize the other to think flat fact,

things on focusing and you point math talked And works. we're from we about. how so the we've understand that view, math a was obviously, quite that of But deliberate, the

important medium-term the medium term? buybacks target guess, so simple year. or from you from your last How XX.X% for or, this or past to words? And XX% increase just waterfall us year give would that your do up some you to XX%, take The XXX returns way point be define other would basis how like just efficiency, revenue, chart that, like in I a to question more segment here,

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to optimistic And go. And where give which look, we so -- going about a we boost. expect are to FX normalize, kind equity markets revenue that we're us of

our We so cutting how firm, company through XX,XXX about employees year I very got market that as I mid-single-digit our XX-plus or this we are people on aligned about the plans, and to the what we running page all don't We we better. And talk team for have need to was to thousand management expenses, to fee better. growth. On And support I revenue and that look, we And about now. processes, cost head feel think have company same XXXX the digitize layoffs. about think I think with we things our where automate talk equity run us that clients. deliver appreciation in think Robin count projects more have optimistic do the underway the a

you lot and more at with to stock, do So drive the all And will buy to and will able same ROTCE margin be pretax together, higher feed back which we'll us that, a talked about. that everything we'll that of time.

in tell an and -- we story before that, this expense improved managed thing one was that in to just that you which I'll that so rightly up And of on telling think talked pressed fact Mike, at and the to beginning we us the add XXXX, we is XXXX. ended we about important XXXX, actually focus. And hadn't the on

strong to and able was also never invest we to We future things a year, thought that detailed. from were And we investment just have that return likely be NII Dermot we to growth. the able to XXXX generate good year the X opportunity things time fee various fee for recognized likely those of through the the the to took take very be because to fees be different a we're putting that it into

be story. we've to 'XX, able set now And 'XX think, ourselves that's those 'XX, we leverage And a so investments. really to up,

time, we'll expenses. play over the and but on a on focused that's story NII. story We'll view. efficiencies stay will an whole course, And point Absolutely together probably focused leverage how of thing from more in of AI story. operating short-term that Now comes a of not We stay think a medium-term

there We're is got we'll 'XX. you to to 'XX in different we trying way the in the the point than be So going to through way get probably disclosures. there that

Our next from the comes Bedell question Deutsche line with Brian Bank. of

and the quality? Thanks focus the then you all as enhance relationships, about digitizing If cost as automating I in goals for profile and there. favoring by those is and on processes of in on revenue profile about there X the that to you servicing drive the improve How do matching parts that deepening think also securities digitizing you the lowering think cost how one the that of can revenue detail and services? Or well. of extent whether can Slide second Are the you servicing -- outlook effect not businesses first what client terms automating where the do the actually around of well? and serve XX processes much against sort enhancing can the the X the you down so to these long-term boxes

Okay.

Brian. that, how here's answer So I would

prepared in and year a we So we've made year lot in budget have and -- lot through we've I business. my Servicing supports the infrastructure investments last this remarks, that of in of a our process, Asset foundational -- the made said

understanding going to through tremendous automation of can spending new a and better of how and out lot they behaviors with explain last and to able result experience. We and greater hired clients year, solutions. to us a what client Operations so automated impact where need, figure to that's be a And to their client processes change a in time Head he's deliver more our we they're our then to made

good a of So lot we've progress made there.

serve, client lead enhanced be happy give the experience with through So us. client then the revenue to going to which driving to better and experience, down will because ultimately we're clients will enhanced cost

we coming we for is, the say XXXX. healthy would feel pipeline mandates into with strongest I thing We won And Asset in XXXX. come Servicing had very specifically, quarter business. we very XXXX QX, feel very into other sales good and we book of about good The our the a uninstalled in about

making made in impact the the joined. And Trust they've the more the made over and lot within digitization and good part I Corporate business significant we've Receipts, we're hires Services, margin automation So then Securities do and a Servicing they've very XX feel months, year Asset we Trust a Corporate this of very, in Depository can more about that lot last so all and the we've leadership investments other drive since made higher. scale to that changes the that

the that Or downside? a U.S. that and move That's is And if are comment the between great also balance color. you to cuts the and the the ECB. lag? on Fed on sheet And beta down does you then And significant international just deposit you cuts. your maybe on viewing Do England can you commensurately? Bank How from your are there able think within Europe? deposit guidance, a differ of follow-on beta,

framework, XX% book, a So just of dollar general really much The XX% is to changed roughly which nothing beta. give overall kind of the portfolio, an quarter-over-quarter. you has has

times, of clients. many we for services, feeds said for us I've X/X sophisticated have They're but of with overall and deposits just variety stickiness our a deposits As operational. the which being goods not

book think where feel pretty and the that's as in from then And good So are higher the sterling, range. a euros said. the which that's beta price XX balance, -- We at. up little but I a here, on story. We XX I about bit I've and the dollar grind make good to will passed it

down, kind expect come up. rate -- of to go Fed and do rates ultimately follow that the same pivot down and came will so it as we the way so as the And will symmetrically

that's view So would how that. I

Poonawala with next Our America. line Bank comes the of of from question Ebrahim

at there I on this for you it's of I growth year. deliberate had revenue have your line you And just number Mike's around guide a sustain strategic looking asked certain But I revenue growth? said what the being of don't view your wondering, think have fee or of of to sustainable guess favoring growth. a looked revenue response or target. And that And question growth we to at when the level I your toughest targets. medium-term to just targets, BTA I'm question where that's in what's business, probably is around investment story revenue level don't I the is a the I that revenue macro a because heard due the the this sight on able a part in

revenue less lot You but how around of hear should normal to baseline about and more think think coming a over businesses, terms one gave the in or years. macro in would growth love of you products details environment

Okay. Thanks for the question, Ebrahim.

So I've been XX months now. here

perspective, in of -- months future. give studied how terms the last you and right, I'll the and the my my history XX over I we've firm So accomplished see and I've how

in it north past of over X%, the has fashion. it delivered So but growth consistent years, hasn't organic Mellon BNY done a

you to believe be to going do when we'll give we it. that that want want to we able you -- know give we consistent so And we're talk a to to and manner, guidance you in guidance,

got So for to positive has But going growth. not set we're we success. up. We 'XX, the feel turn firm to a of want out track fee that kind give think don't on record we of guidance

And other so some kind questions. said of to answer in this I've

business right biggest we Asset making Servicing, feel We strong will we And momentum. investments to we're -- that the feel have business. power our forward. like that it's

to But so growth growth. go Pershing, segment, Clearance underlying fundamentals, little dependent and businesses be all pretax guides have you a of of And guidance us Market terms feel on to that overall pretax all if efficiency what Wealth bit margin And for growth. little profitable cautious margin again, on of Services you we like each growth. And market. bit take of very big But to with giving a in fee our the our mid-XXs feel good is then market, very, Treasury a most and and going as is a Collateral part Management, good and opportunities it then about. and have the happens fee the and result is more fee Services, we up

a debated you about we that the And don't output dollar fees. that. to have add on this just I'll Ebrahim, the lot guidance fact

We'll you portfolio what both a of been is potential. the places. the we've as really see sure of to have is is communicating all effect, market on trying lot invested a how impact there's markets to there a bit Dermot evolve. that. But inputs so a as we're different to that And do make to which result, we've really a And of in said,

to for going We XXXX to have then to know and us hard those in the But good to hit. something to hit fact around are hopefully going confidence of it's in yield able several when more continue XXXX. that to exactly going and what's be yield it's exactly

around you it's but to comfortable absolute that exit in a us tell hit. to portfolio actually of going investments, the a don't we we've So have on the exact that sight makes the basis confidence got quarter line those number

we we committed do a all make were so on. year the show in that and fact to inputs around the to the we can track fact, said we record of things made you that now progress progress on is in And have, point XXXX

off buybacks? where growth? of just And right uses any to into in But the now? That's a one going the sure helpful. Or that fact just sensitivity separate mean there when is good you you I capital, question. Good buying of being table think the stock. valuation-wise, sort are other the probably be them color. is And you're there run back leaning that I'm given don't to like secondly, to most inorganic be -- investors want of M&A-driven about stock

into we've and towards the have then So the doing. that the surplus think to return it we how we is capital our bottom taking what that's you're it of things after our an if we And to to be to of able shareholders, been those we in about want right profitably that waterfall account, waterfall capital. we And is invest implied well first have business.

about in that so we waterfall it. hasn't And how think changed

much have our to distract it. ourselves That's point made company so we terms running haven't in really to how what we franchise focused story. in better. run with think we been Now that that we that around the improve to of opportunity able be Dermot can M&A, And the right we on the have M&A. we're think growth now, ourselves and wanted there's and the better really

Now we high have a bar. high bar. We've a had

particularly delivery. to accelerate the that have the not you. that in open. We our their a at do, but bar, big laid our help we're that's speed can, for us us things but pivots, that not things would transformation, continue we interested own we eyes are we've right to And high keeping at think to I looking We're way, are always in on out journey looking to thing

Usdin Ken question next from Jefferies. Our comes line with of the

increase to you a job to that made year, good on and you $X.X setting we ended point the NII earlier, nice year bar last So billion. up a of hittable really to a that did NII guys seeing end the up

So prior like the cadence and I'm the that still the when regards and you're the travel with us like rates, conversation you can forecast setting from settling that building to understand of bar the in, rates starts down like a down a direction on that, back to then to help to settles which implies just you're of wondering, just given definitely $X.X new wondering I'm XX%, down billion, bottom?

to quarterly the strong. to of Deposit not finished really commit I'm yearly I guidance. factors. guidance. new we That a want year too was variety levels, sure

remarks, months had September, good consecutive We I deposit talked feel doing We Goldman prepared at us. very what good December. As talked said feel clients I in very franchise. in are I X at the of growth. Barclays we my in about about with

comes. year, us. sit it'd -- when for macro, is expected high go down we we But deposits mid- it we I what this and That's And happen bank down time trajectory I expect digits. said ultimately as it be last and I X% to this this look the single so to it out at year. And to by back was the

what's going a so have I don't particular quarter-by-quarter. magic on to happen And ball

divide by it take see you. just model your that and for So where the just XX% and down X I gets would

that margin to positive to guide operating will point future. us us of with point volatility macro maybe to to to those expense can target then and investments leverage a while you just trajectory targets XX% you we get on and/or meaningful is the that, presume it. a it And a NII a that a comments corollary to flattish still get you're then movement I know successful just as to And past Got your base point flattish expense does on, year incorporates and margin seeing how I gave of environment that fits of which in for to getting needed -- improvements. not last deal NII. this terms ended Presuming from of to stable gap X% talk move. income longer-term Okay. the But the the starts grow, point we it relative and -- you down the a trying fee you us kind how manage plus to

bit off. there. And focused and start and level least being add to of have between Look, year operating want that that sort at Robin. positive to the it's might of Ken, we also think that about, each talking I'll So there's going about work margin unique factors. get we're here a this of point targets fairly is us recognize high to Dermot we little something. the on leverage, at I until a

was And a in in different be And of allowed have order which a is fairly conditions us expenses, XX% which which the which growing in going so was -- make NII allowed that to for way. used we a something we've that meaningful fee year have jump to not the fine investments. but able significant create year to on to some headroom that is

thing the it got different has it and of every different operating these the recognizing And fees, us And NII we're be year move trying It's markets each faced brings inputs. something that are year to to around actually in that each And what's year. we context our serves It composition. we control. We around. of years expenses. right solving the very XXXX a for But with. we Now different. has is purposeful one manage of think leverage that a face has -- has the do, that's that in

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Schorr of ISI. with Our line comes next the Glenn Evercore question from

So just question, one could. big if I

them to did So then executing the York about clients New talk I and getting a getting Bank which you consolidate service today -- clients and I invested better do business. Mellon, and will hear with think been talking you're of you've business on improve about more you lot.

have more maybe you on, to your portfolio high highest business improve growing as it put but and/or whole and capital that haven't need modernizing improving modernize been digitizing expense is, towards actually the and my natural to working, question So grow? to It's effort them. is a of feels actually a you're much supposed that and and question putting at margins businesses need But -- like and it's it's basically? level, ones it your you're thought feels any and do profitable lower towards lot there

out answer that the the investments different do. Dermot yes, subtly there laid laid materials in your the our out to are we've So short each to we in is making And is flavor we Glenn, and particularly, has segments. as of a question,

Securities our the is cost as in to serve Services on and well as so And efficiency focus segment, the growth.

business want with recognize in scale the making of to We service to But that to benefits we our more that largest Because continues growth. even margin world's improve that fully provide. haven't translate we our that customers we our the custodian, competitive. be sure and us pricing ignored allow the can into will we're

business. that that And brought digitization of lot in efficiency to towards a tilt a can got there. bear be it's So there's

excited are on in the we new mentioned, of of we Dermot the But about shorter-term the benefits the and about growth her excited had that medium-term forgotten space. our working And that. to of haven't team best AI. We and potential are last team are targeted that's year why about things sales our actually Emily We're in leadership business. the at really in quarter that operations, end

you're frankly, We with, and Services really grow that's our want margin. a talk that business, focus our which Now Market Wealth in we're margin, growing and happy that that, quite right, us and to about there. you business heard has haven't at margin that

that's a structural distribution the end just our that as at some to launches which of had about from completely driven make the business, He of of return growth That's drive, Investment we little So market on Clearance prior been would making, of that's where to built to doing, like the changes a margins. opportunity this piece, the was and talked where really not more where a course our bit over of course, our of that drive Management of new business. Dermot around in A significant business. our $X.X difficult product Collateral that's drive, Wove trillion-plus revenues, that place lot the that help investments talked very the it environment, we've where the is of new year. revenue. And to Treasury in in of now overall we'd we've we've BNY have, of where we've -- before but we've down. market where manufacturing. But we're the are try the Wealth about really that's our part we've subject, had the to more Services the we business that grow the wanting we our availing orphaned itself business, also opposed Mellon and worth where $X day, higher investments so got Investment been margin as Management making then been separate well, to trillion Management and previously around to

So the to the segment. the solving way in we're according which problem varies

in invested we it's while X.X%. grow growth there, And to -- what to but billion the that my things we was $X.X is I that remarks, in add would going Glenn, keeping wanted company last at year our expense do rate

disciplined very value same expense we're do, of So while firm. money, about base what we time, for manage getting the the to the want at

Gosalia the of next Stanley. question with Manan line comes from Our Morgan

early, the that Can the you you in rate? growth around your benefit NII? NII are does it Fed your deposit talk to QT slow would a guide? and and And continues end assuming does be So at big about if QT your to assumptions current

year is QT rates at market-implied the on the So forward our end NII with based continuing. guidance of

then QT were with expect case to that not QT QT But change, models benefits and the continuing, anytime you. and talk what And to our run and that see deposits will soon. If we come our so base then and obviously, would to is off. roll ending again of revisit we we be would

the noninterest-bearing on But net help should that balances? basis, deposit a

case. yes. sensitivity It I our you it's here it and base help, But couldn't should not to give a today,

it. Got

help us get the Okay. that cuts? if a there even Great. still then securities reprices still if the Is chunk large we securities how you book think rate about higher with with X X And should cuts? book of we could

-- I'll start with So QX QX.

like had financial current XXXX, about rolling down from supplement, deployed of liquid, and at there see $X into will pickup the into we In about off the shortened be XXX to rates. expect It's largely billion yield points. basis about basis by duration. yield to some roll-down about the XXX rolled XXX market book you cetera. in pickup cash As points, so And we quite a securities X% et very the mortgages,

good So about outlook overall, in the book XXXX. we feel for the

Kasody Our with next of the line question Gerard RBC. comes from

think, guidance? it and you If already X the affect XX% interest incorrect to how XXXX if your is that year, does Dermot, expectations net wrong or I currently know down curve, the revenue cuts for touched the I'm forward rate terms for correct X that the there. with in on following, of I closer in comes being this X me forward XX% curve

would say higher you're I So the that longer. answer is for theoretical to

to And higher-yielding so their continue assets. will people deposits therefore, optimize into

the off base see see of we've this could could run to you So right. left bottom-up top-down, balances kind more. analyzed case, you But

XX%. give But transpired would so we if it be the And you NII to the is a number, be guidance different number different. obviously, best

understood. No, Sure.

you And in maybe, Robin or -- the apologize already talked Okay. and about I it's guys if this deck.

the new And have amount Your this base installed for that what's business the what was year? next quarter, that? wins dollar you of

or would look, I remarks, of on giving had the clients earlier question in more it an mandates our guidance 'XX. -- specific largest give and prepared in an installed we in the it's answer us base sales We backlogs. asset QX was business. East, But said don't I my managers, Middle we say, So to won strongest

are So look, buildup Asset we them. and what very of good in feel in kind front 'XX, in feel very we 'XX team about Servicing about opportunities and accomplished the what the of

Wildhack, the from of Our next comes line question Research. Rob Autonomous

weigh mentioned A couple of you you've were 'XX. Dermot, had the of deposits. on would that, to you've a that that more growth times already 'XX or in that lot couple things grow deposit despite headwinds a deposits in of And straight are deposits. seems able to on 'XX. months been yet It close X

else of 'XX come headwind or So where that if the there's of better guide? in environment might last and in I'm a the if a than what's you curious more 'XX or think X/X anything become change into there's from an actually deposits possibility and

our So where look, big and part goes. base, overall, of too, the base deposit -- is NIBs that deposit a

we thought turn to behind I today on. When it didn't our turn hindsight clients it. here I move January, was we take worked $XXX it and But is here us, way and the it was out. reality outperformed by out going 'XX the sat last we sit team. so we and and look, bank everybody it's and by out million, hard and work everything QX So And is

who going happen so And knows XXXX. in what's to

And there. so of is lot uncertainty a there out

the you be the a number. today. that if we So we're give it but to be upside, that's to be we you the be changes to first feel would number, it with very I comfortable to XX%. people not going better like down the tell to We'd number to like And -- that because

And in Rob, forget, I'll just lot easy the world. to a add, it's it's of we still got complexity

earlier said thing. the QT to one Dermot If that's ends, that's on, maybe continues, if QT plus. As

in flow how had see market as funds the funds. to the run money a becomes massive see gets we may other also as places, wildcard you that of of case Stock not, liquidity work of and over put a the or the -- You've market, be. a bit up course little in therefore,

the -- fact The fact in that cut Fed they talk still about might March. March. of that complexity the cut talks the we at not the So might about Fed in

earlier variation can enough the of And problem that the in there's that's questions that we have did is around he path the Dermot kind out. that just sense the to we type way of guidance. current So exact our in one the play why But it this going the answered do way have and visibility. of to don't XX% we of that because work our

like if on does for then seasoned for not the yet or to was then And that not yet a operational? criteria you I I it take wondering you play something be think mentioned deposit What's that out? just Okay. operational. considered could deposits to about that. earlier were expand long And something how

-- the that's to the of in be operational, line over of off-line. which then nature. to have as as with on there's helps us firm. general be making another you very can sticky And sense And you through operational liquidity be classify stuff have to you take to to that we and So long doing answer ratio a that, in But us standpoint. and to you business us we the be payments time, have you

then those a of sticky, I and haven't that until are meet you're good relatively that's fact. a criteria. But if nonoperational you So new you're our record, as overall client such considered you as deposits time earlier, X/X established said and track

from line the comes next with of Our Rajiv question Morningstar. Bhatia

your I pricing Securities the Services guess ACA you was X% up within revenue. flat Can segment? environment fee on comment against

pricing would So would or you it's pressure, intensifying? you say, is it's say stable

do a we've can last through to stable, it's year. aren't, that a are gave and in say do would we noted which overall profitability, what it client-by-client, a and versus analyzed it's And I we how serve basis price gone So basis. client clients something which profitable, clients terms fully of to cost we focus particular marginal on

done terms of the how months, a on more over to work So we've business vis-à-vis we of how we sophisticated in and price how lot foundational our clients XX last become talk pricing. we've

positive would say I with it. So momentum a stable to

Fargo Mike Our Securities. with question the Wells of comes Mayo from final line

any see might implementation cases of numbers the ability At Asset and Is what of and business, And able to very AI? the go your you I'm in what and Asset be to in is reality shared Mellon do? beyond the the BNY the as just Portney, head excitement pilot Servicing is the And -- November, specific Boston about seem wondering of it and implications that where of Conference use potential the hype, excited the it business. that AI if throughout to Servicing from production. Bank Emily

excited the Look, Yes, excited short Mike. about We're about answer yes, are is, it. AI. we

every them medium engineers capabilities. of use had They about the out when top AI a to different building on We been a a what call we've stood firm investment we sort duplication And really then on cases investment in actually the cases. for different up leadership function the up investing lot functional because of of talent under things We are XXXX, these we term, in. business with of for Over worked canvas every we where set developed the Hub, to across focus series themes gathered use a you think for a in of actually and hundreds that those. basis. fundamental themes of there's bunch

we actually implementation today of that broadly currently business before. CCM business. in that predictions of service. piece AI And that software earn more and that treasuries example. sales. early a our that was so for good actually great It our is to actually in as we a do very also looks we it's and clients at talked things piece of it's that a some creating revenue have client about production. have We've contributes We software a stability, And part on That's market made, a

has we question as efficiency. is create going to of people there the to side to an which more for well, many processes flip organization processes, have there's as be be, the On an going performing and that, opportunity

investing or day. are one helping employee research march in the the tasks a AI space And are particular do it's investing the as our also mundane to well. team repetitive. so and invested In in which opportunity we've get that have in experience, We're case, on

X:XX has and rather So given write than up in for at write getting AI up X:XX because to in to the rough them. the a data morning they bunch with of draft research, them at start morning served get the up to research a

So all there different are things. sorts of

and not the me something provide way not be the thinking put so in would top this of line. if we're of line it to that to numbers, decade But in benefit the next haven't course the able it. about directly outlooks on terms it we bottom Now that and the is is over into it's going our surprise

not sight too I'm exact you but exactly the on working about And up because things of before: line this temper, so talking what we're sure. it. Dermot we much can't question that for excited you the the hood, are that asked answering we're said we're give we doing under still But into

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

a you, close of XXXX Thank transformation is by multiyear to was reiterating year that a good us for to that start. I'd foundational off like important company the and an operator.

grateful us. in to you old them As the and our and stand our our BNY Mellon opportunity past opportunity allowing and even proud their the us have everything should relationships year, with I'm ways. you anniversary the excited ahead of weekend. immensely IR any about XXXth we months. faith and begin XX Mellon. Marius placed appreciate long assist company's at And greater enjoy who team new, to over people of I and to ready serve leaning clients that Mellon in support the to questions. we're done well the I'm the BNY Be that in our here got have are investors, BNY

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