The Bank of New York Mellon Corporation

Good morning and welcome to the 2024 first quarter earnings conference call hosted by BMY Mellon. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. Please note that this conference call and webcast will be recorded and will consist of copyrighted material. You may not record or broadcast these materials without BMY Mellon's consent. I will now turn the call over to Marius Merz, BMY Mellon, Head of Investor Relations. Please go ahead.

Thank you, Operator. Good morning, everyone, and thanks for joining us. I'm here with Robin Vince, President and Chief Executive Officer, and Dermot McDonough, our Chief Financial Officer. As always, we will reference our Financial Highlights presentation, which can be found on the Investor Relations page of our website at bnymellon.com. And I'll note that our remarks will contain forward-looking statements and non-GAAP measures. Actual results may differ materially from those projected in the forward-looking statements. Information about these statements and non-GAAP measures are available in the earnings press release, financial supplement, and financial highlights presentation, all available on the investor relations page of our website. Forward-looking statements made on this call speak only as of today, April 16, 2024, and and will not be updated. With that, I will turn it over to Robin.

Thanks, Marius, and thank you everyone for joining us this morning. Dermot will talk you through the financials in a moment, but in summary, BNY Mellon is off to an encouraging start for the year. The firm delivered solid financial performance while we continued to take important steps in the deliberate transformation of our company. And we're seeing early signs of progress that give us confidence as we work toward the opportunity ahead. Looking beyond BNY Mellon, the first three months of the year provided a mostly constructive operating environment, with global markets signaling expectations for continued growth. Equity and credit markets rallied, even as rate cut expectations partially unwound and bond yields rose. Foreign exchange markets, on the other hand, saw a continuation of the relatively low volumes and muted volatility that we've now seen for the past several quarters. And of course, there are many tail risks, including a variety of different market scenarios, the possibility of escalation in one of the ongoing geopolitical conflicts, or an unexpected result in the many elections taking place worldwide this year. As I've said many times before, Being resilient matters, and this represents a commercial strength for our business. We are constantly preparing and positioning for a wide range of potential scenarios to support our clients and deliver compelling outcomes for our shareholders. Now referring to page two of the financial highlights presentation. BNY Mellon delivered double-digit EPS growth as well as pre-tax margin and ROTCE expansion on the back of positive operating leverage in the first quarter. We reported earnings per share of $1.25 up 11% year over year, and excluding notable items, earnings per share of $1.29 were up 14%. Total revenue of $4.5 billion was up 3% year-over-year. That included 8% growth in investment services fees led by strength in asset servicing, issuer services, and clearance and collateral management, which more than offset revenue headwinds from muted volatility in FX markets and lower net interest income. Expenses of $3.2 billion were up 2% year-over-year and up 1% excluding notable items. Consistent with our goal to generate at least some operating leverage this year, in the first quarter, we did deliver positive operating leverage, both on a reported basis and excluding notable items. Our reported pre-tax margin was 29%, or 30%, excluding notable items. And we generated a 21% return on tangible common equity. Our balance sheet remains strong. with capital and liquidity ratios in line with our management targets, and deposit balances were up both year over year and sequentially. Year to date, we returned close to 140% of earnings to common shareholders through dividends and buybacks, and our board of directors has authorized a new $6 billion share repurchase program. On our last earnings call in January, we communicated medium-term financial targets and presented our plan to improve BNY Mellon's financial performance. We framed this work for our people through three strategic pillars. Be more for our clients, run our company better, and power our culture. Throughout the first quarter, we've made progress to be more for our clients, including both product innovation, and greater intensity around better delivering our platforms to the market so we can truly help clients achieve their ambitions. As a global financial services company, our unique portfolio of market-leading and complementary businesses presents a tremendous additional value for our clients and shareholders. As you know, we are maturing our One BNY Mellon initiative by implementing this mentality into the nuts and bolts processes across the company. For example, we recently announced that Ashton Thomas Securities, an independent broker dealer and registered investment advisor, will use clearing and custody services from Pershing and BNY Mellon precision direct indexing capabilities from investment management. This is a great example of multiple lines of business working together to provide holistic solutions for clients. As we continue to grow our client roster, we also know that delivering more to our existing clients represents a significant opportunity. As another example, last month we expanded on a long-standing relationship with CIFC, an alternative credit specialist and existing client of ours in asset servicing and corporate trust, to bring their U.S. direct lending strategy onto our global distribution platform. This also speaks to the incremental value that asset servicing can bring to our asset manager clients by allowing them to tap into BNY Mellon's global distribution platform to extend the reach of their capabilities. Consistent with our previously communicated intention to grow the revenue contribution of our market and wealth services segment, we're starting to see our investments to accelerate revenue growth in this high-margin segment begin to bear fruit. For example, we continue to be encouraged by the level of interest from both new and existing clients in our Wove Wealth Advisory platform. We have several clients live on the platform today. We closed a number of deals in the first quarter, and the sales pipeline continues to be strong. Across market and wealth services, we also continue to bring new solutions to the market. For example, Treasury Services successfully launched virtual account-based solutions, a set of cash management solutions to meet our clients' demands for more flexibility and transparency into their payment flows. Next, we are taking important steps to run our company better by simplifying processes powering our platforms and embracing new technologies. Over the past several months, we've been working to realign several similar products and services across our lines of business. The largest of these changes was moving institutional solutions from Pershing to our clearance and collateral management business. This is also part of making progress toward adopting a platforms operating model. By uniting related capabilities, we can do things in one place, do them well, and elevate overall execution to better serve our clients and drive growth. Last month, we went live with the first step on the transition into our new model. What it has taken and will continue to take a lot of hard work as we transform our operating model over time we are confident this new way of working will create better outcomes for our clients. And it will also create more efficiency and enhanced risk management. Around 15% of our people around the world are now working in our new operating model, allowing them to feel more connected to what we're doing and empowered to make change. I'd like to thank our teams who are part of this exciting change for pushing us forward as we mark this important milestone. We also see meaningful opportunity over the coming years from continued digitization and reengineering initiatives, as well as from embracing new technologies. To support this effort, we are making deliberate investments, enabling us to scale AI technologies across the organization through our Enterprise AI Hub. Last month, NVIDIA announced that BNY Mellon became the first major bank to deploy a DGX super pod, which will accelerate our processing capacity to innovate, reduce risk and launch AI enabled capabilities. Our people have identified hundreds of use cases across BNY Mellon, and we already have several in production today. Across the company, it's our people who continue to power our culture. If you were to walk the halls of BNY Mellon, you'd feel the energy and sense of purpose our leadership team feels when we visit our teams around the world. To that end, we're investing in our people. Over the past several months, we launched new learning and feedback platforms powered by AI, expanded employee benefits, launched a new well-being support program, improved and accelerated our year-end feedback and compensation processes, and more. And we're delighted to welcome Shannon Hobbs, who will join us as our new Chief People Officer in June. As we continue to power our culture forward, we adopted the following five core principles to guide how our teams work and collaborate as we drive our success as a company. Be client-obsessed. Spark progress, own it, stay curious, and thrive together. To wrap up, our performance in the first quarter provides a glimpse of BNY Mellon's potential. Running our company better, inclusive of our focus on platforms, is enabling us to improve profitability and invest in our future. While we are pleased to see early signs of progress, we remain focused on the significant work ahead of us as we become more for our clients and deliver higher performance for our shareholders. As I have said before, the transformation of our company is a multi-year endeavor, but we've started 2024, the year of our 240th anniversary, with a sense of excitement and determination around what's possible. Now, over to you, Dermot.