The Bank of New York Mellon Corporation

Good morning and welcome to the 2024 Second Quarter Earnings Conference Call hosted by BNY. 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 rebroadcast these materials without BNY's consent. I will now turn the call over to Marius Mertz, BNY Head of Investor Relations. Please go ahead.

Thank you, Operator. Good morning, everyone, and thank you 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 bny.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 OnExpress 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, July 12th, 2024, and will not be updated. With that, I will turn it over to Robin.

Thanks, Marius. Good morning, everyone, and thank you for joining us. Before Dermot reviews the financials in greater detail, I'd like to start with a few remarks about our progress in the quarter. In short, we delivered another quarter of improved financial performance with positive operating leverage on the back of solid fee growth and continued expense discipline. And we continued to make tangible progress on our path to be more for our clients, to run our company better, and to power our culture. Last month, we celebrated our company's 240th anniversary with our people, and many of our clients. Even with this rich history of operating across four centuries, I believe that our best days remain ahead of us. That bank, with around half a million dollars of capital in 1784, today oversees roughly $50 trillion in assets and powers platforms across payments, security, settlement, wealth, investments, collateral, trading, and more for clients in over 100 markets around the world. As the world changes and global financial markets evolve, so do we. Earlier this year, in January, you heard us lay out our strategy, which maps out what we need to get done and how we need to do it. Last month, we introduced changes to our logo and simplified and modernized our company brand to BNY. to improve the market's familiarity with who we are and what we do. This rebranding better aligns the perception of our company to the substance of what we're doing to unlock our full potential as one BNY. Now, referring to page two of the financial highlights presentation, BNY delivered solid EPS growth as well as pre-tax margin and ROTCE expansion, once again, on the back of positive operating leverage in the second quarter. Reported earnings per share of $1.52 were up 16% year-over-year. And excluding notable items, earnings per share of $1.51 were up 9%. Total revenue of $4.6 billion was up 2% year-over-year. This included 5% growth in investment services fees, led by continued strength in clearance and collateral management, asset servicing, and treasury services, as well as 16% growth in foreign exchange revenue. Net interest income decreased by 6%. Expenses of $3.1 billion were down 1% year-over-year, Excluding notable items, expenses were up 1%, reflecting further investments in our people and technology, while we also continued to realize greater efficiencies. Margin was 33%. And in what is seasonally our strongest quarter, we reported a return on tangible common equity of 25%, 24% excluding notable items. These financial results were against the backdrop of a relatively constructive operating environment, the market calling for a gradual and shallow easing of policy rates, inflation pressures easing, and investor confidence growing. On average, equity market values increased, while fixed income markets finished slightly lower compared to the first quarter. A couple of weeks ago, the Federal Reserve released the results of its annual bank stress test, which once again showcased our resilient business model and our strength to support clients through extreme stress scenarios. The test confirmed that our preliminary stress capital buffer requirement remains at the regulatory floor of 2.5%, and we increased our quarterly common dividend by 12%, to 47 cents per share starting this quarter. In May, the transition to T plus one settlement in the US, Canadian, and Mexican markets represented one of the more significant market structure changes that our industry has seen in a couple of decades. BNY's critical role in the financial system gives us the opportunity to help clients through major shifts like this, further strengthening their trust in us and deepening our relationships with them. By running the company better, we are starting to capitalize on BNY's truly powerful combination of security services, market and wealth services, and our investments and wealth businesses to serve our clients more effectively across the entire financial life cycle. As an example, this past quarter, BNY was awarded a significant mandate by a premier global asset manager with over $100 billion in assets under management. We were selected based on our ability to deliver custody, fund servicing, ETF and digital fund services, treasury services, and purging. Our holistic offering will power their future growth strategy. In another example, AIA, the Pan-Asian Life Insurance Group announced a new collaboration with BNY and BlackRock as AIA transforms its investment platform. AIA has announced that they will implement BNY's specialized investment operations, data management services, and technology with BlackRock's Aladdin to create a connected and scalable ecosystem to support the company's evolving investment activities. We also continue to be pleased with the growing interest in our wealth advisory platform, Wove. Global Finance recently named Wove as one of the top three global financial innovations as part of its annual innovators awards for 2024. At Insight, Pershing's annual flagship wealth services conference in June, we announced a suite of new solutions on the platform. Wove Investor, a one-stop client portal, Wove Data, a cloud data platform designed for financial professionals at wealth management firms, and Portfolio Solutions, a set of enhancements to the platform that will help advisors move more efficiently from researching investment products to aligning them to a client's risk objectives and adding them to a portfolio. We also introduced a new 1BNY offering, that enables clients to easily access multiple BNY capabilities, including our managed accounts platform, asset allocation and manager selection, investment management products, customized tax solutions, the interoperable Wove platform for advisors, and custody and clearing services from Pershing. Through a comprehensive, unified package leveraging the breadth of BNY, to make clients' wealth advisors' lives easier. And we have proof points. Example, a fast-growing, full-service regional bank recently selected Pershing to provide custody and clearing services to private wealth business. But they are also adopting advisory, driver's cash management, direct indexing, and private banking. As we've said many times, our culture and people are a critical part of being more for our clients and running our company better. We are pleased to see that our actions are enabling us to be a top talent destination for recent graduates and experienced leaders alike. This summer, we're welcoming our largest ever intern and analyst classes, a total of over 3,500 individuals chosen from over 150,000 applications. And we recently announced several new appointments to our leadership team. Shannon Hobbs, our new chief people officer, joined us in June. Leanne Russell will join us in September as chief information officer and global head of engineering. Jose Menea will also join us in September. Lead BNY's investments and wealth. To wrap up, Halfway through the year, we're pleased with the progress that we have made and how it has reflected in both improved financial performance to date as well as our building momentum. One of my favorite quotes comes from Alexander Hamilton, our founder, who famously said that he attributed his success not to genius but to hard work. We have been hard at work, and we've laid a solid foundation. Our team is in full execution mode. and we're starting to demonstrate the power of our franchise and of operating as one BNY for our clients and our shareholders. With that, over to you, Donovan.