The Bank of New York Mellon Corporation (BK) Bundle
A Brief History of The Bank of New York Mellon Corporation
The Bank of New York Mellon Corporation (BNY Mellon) has undergone significant transformations since its inception. As of 2024, it stands as a leading investment management and investment services company, with a rich history that reflects its strategic evolution in the financial sector.
Founding and Early Years
Founded in 1784, BNY Mellon is one of the oldest financial institutions in the United States. The original Bank of New York was established by founding father Alexander Hamilton. Over the years, it expanded through various mergers and acquisitions, including the merger with Mellon Financial Corporation in 2007, which created one of the largest asset management firms globally.
Financial Performance and Key Metrics (2024)
In the third quarter of 2024, BNY Mellon reported total revenue of $4.648 billion, a 5% increase compared to $4.420 billion in Q3 2023. The net interest income for the quarter was $1.048 billion, reflecting a year-over-year increase of 3%.
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $4.648 billion | $4.420 billion | 5% |
| Net Interest Income | $1.048 billion | $1.016 billion | 3% |
| Net Income Applicable to Common Shareholders | $1.110 billion | $0.958 billion | 16% |
| Earnings Per Share (Diluted) | $1.50 | $1.23 | 22% |
Assets Under Management and Custody
As of September 30, 2024, BNY Mellon reported assets under management (AUM) of $2.14 trillion, and assets under custody and/or administration (AUC/A) reached $52.1 trillion. This marked an 18% increase in AUM compared to $1.82 trillion in Q3 2023, driven by market inflows and improved market values.
Capital and Dividend Policy
BNY Mellon had total shareholders' equity of $42.0 billion as of September 30, 2024, up from $40.8 billion at the end of 2023. The bank's capital strategy includes a consistent dividend payout, having increased its quarterly cash dividend by 12% in July 2024, from $0.42 to $0.47 per share.
| Capital Metrics | Q3 2024 | Q4 2023 |
|---|---|---|
| Total Shareholders' Equity | $42.0 billion | $40.8 billion |
| Quarterly Dividend per Share | $0.47 | $0.42 |
Market Position and Strategic Initiatives
BNY Mellon continues to enhance its market position through strategic initiatives focusing on technology and innovation, aiming to streamline operations and improve client services. The company emphasizes its fee-based revenue model, which represented 73% of total revenue in Q3 2024.
Conclusion
As of 2024, BNY Mellon has solidified its role as a pivotal player in the global financial landscape, leveraging its long-standing history and robust financial performance to navigate challenges and capitalize on growth opportunities.
A Who Owns The Bank of New York Mellon Corporation (BK)
Major Shareholders
The Bank of New York Mellon Corporation (BK) has a diverse ownership structure comprising institutional investors, mutual funds, and individual shareholders. As of 2024, the following table summarizes the major shareholders of BNY Mellon:
| Shareholder Type | Number of Shares (in millions) | Percentage of Total Shares |
|---|---|---|
| Vanguard Group, Inc. | 70.2 | 9.6% |
| BlackRock, Inc. | 66.0 | 9.1% |
| State Street Corporation | 45.0 | 6.2% |
| Wellington Management Co. LLP | 30.0 | 4.1% |
| Fidelity Investments | 25.5 | 3.5% |
| Other Institutional Investors | 215.0 | 29.5% |
| Retail Investors | 250.0 | 34.1% |
| Insider Ownership | 10.0 | 1.4% |
Institutional Ownership
Institutional investors hold a significant portion of BNY Mellon's shares, reflecting confidence in the company's performance and growth potential. As of September 30, 2024, the institutional ownership breakdown is as follows:
| Institution | Percentage of Holdings | Market Value (in billions) |
|---|---|---|
| Vanguard Group | 9.6% | $5.03 |
| BlackRock | 9.1% | $4.75 |
| State Street | 6.2% | $3.27 |
| Wellington Management | 4.1% | $2.16 |
| Fidelity Investments | 3.5% | $1.85 |
| Others | 67.5% | $35.62 |
Recent Changes in Ownership
In recent quarters, BNY Mellon has seen fluctuations in its major shareholders due to market conditions and strategic investment decisions:
- In the third quarter of 2024, Vanguard increased its stake by acquiring an additional 2.5 million shares.
- BlackRock reduced its holdings slightly, selling approximately 1.5 million shares.
- State Street maintained its position without significant changes in shareholding.
Conclusion of Ownership Trends
Overall, institutional investors remain the primary owners of The Bank of New York Mellon Corporation, with retail investors and insiders holding a smaller share of the company. The ongoing management of share repurchases and dividends continues to influence ownership distribution.
Market Capitalization
As of September 30, 2024, BNY Mellon reported a market capitalization of approximately $52.25 billion, reflecting its robust financial performance and investor confidence.
| Financial Metric | Amount |
|---|---|
| Market Capitalization | $52.25 billion |
| Total Shareholders' Equity | $42.0 billion |
| Common Shares Outstanding | 727.08 million |
| Book Value per Share | $51.78 |
The ownership structure and market performance of BNY Mellon demonstrate a stable investment environment, attracting significant institutional interest and maintaining a diverse shareholder base.
The Bank of New York Mellon Corporation (BK) Mission Statement
The Bank of New York Mellon Corporation (BK) emphasizes its commitment to providing superior investment management and investment services to its clients globally. The mission statement reflects a dedication to helping clients navigate their financial journeys and achieve their investment objectives.
Core Values
- Integrity: Upholding the highest ethical standards in all dealings.
- Client Focus: Prioritizing the needs and objectives of clients.
- Excellence: Striving for excellence in service delivery and operational efficiency.
- Innovation: Embracing technology and innovation to enhance client experiences.
- Diversity: Fostering a diverse and inclusive workplace.
Financial Overview
As of September 30, 2024, The Bank of New York Mellon Corporation reported the following financial highlights:
| Financial Metrics | Q3 2024 | Q2 2024 | Q3 2023 |
|---|---|---|---|
| Total Assets | $427 billion | $410 billion | $400 billion |
| Total Shareholders’ Equity | $42.0 billion | $40.8 billion | $40.7 billion |
| Net Income | $1.189 billion | $1.170 billion | $1.043 billion |
| Earnings Per Share (Diluted) | $1.50 | $1.52 | $1.23 |
| Book Value per Common Share | $51.78 | $49.46 | $47.97 |
| Market Capitalization | $52.248 billion | $44.196 billion | $39.524 billion |
| Cash Dividends per Share | $0.47 | $0.42 | $0.42 |
| Common Dividend Payout Ratio | 32% | 28% | 202% |
Strategic Goals
The Bank of New York Mellon is focused on several strategic goals to enhance its mission:
- Enhancing client engagement through personalized services and innovative solutions.
- Expanding its global footprint to serve a broader client base.
- Investing in technology to streamline operations and improve service delivery.
- Maintaining strong capital and liquidity positions to support growth and stability.
Recent Developments
In July 2024, the Board of Directors approved a 12% increase in the quarterly cash dividend, reflecting the company's strong financial performance and commitment to returning value to shareholders. The increased dividend was effective from August 2, 2024.
As of September 30, 2024, the company’s liquidity coverage ratio (LCR) stood at 116%, demonstrating robust liquidity management amid changing market conditions. Additionally, the total consolidated high-quality liquid assets (HQLA) amounted to $199 billion.
Commitment to Sustainability
The Bank of New York Mellon has integrated sustainability into its mission, focusing on responsible investment practices and reducing its environmental footprint. This commitment is reflected in its investment strategies that prioritize sustainable and socially responsible assets.
Conclusion
The Bank of New York Mellon Corporation continues to uphold its mission of delivering superior investment management and services, demonstrating resilience and adaptability in a dynamic financial landscape.
How The Bank of New York Mellon Corporation (BK) Works
Overview of Operations
The Bank of New York Mellon Corporation (BNY Mellon) operates as a global investments company, providing various financial services including asset servicing, wealth management, and investment management.
Financial Performance
As of the third quarter of 2024, BNY Mellon reported total revenue of $4.648 billion, reflecting a 5% increase from $4.420 billion in the same quarter of 2023. Year-to-date total revenue reached $13.772 billion, up from $13.339 billion year-over-year.
| Metric | 3Q24 | 3Q23 | Year-to-Date 2024 | Year-to-Date 2023 |
|---|---|---|---|---|
| Total Revenue | $4.648 billion | $4.420 billion | $13.772 billion | $13.339 billion |
| Net Income Applicable to Common Shareholders | $1.110 billion | $0.958 billion | $3.206 billion | $2.905 billion |
| Earnings Per Share (EPS) | $1.50 | $1.23 | $4.30 | $3.68 |
Revenue Breakdown
Revenue is generated from various segments, with a significant portion coming from fees for investment services and management.
| Revenue Source | 3Q24 ($ million) | 3Q23 ($ million) |
|---|---|---|
| Investment Services Fees | $2,344 | $2,230 |
| Investment Management Fees | $794 | $777 |
| Foreign Exchange Revenue | $175 | $154 |
| Total Fee Revenue | $3,404 | $3,245 |
Assets Under Management and Custody
As of September 30, 2024, BNY Mellon managed $2.14 trillion in assets and had $52.1 trillion in assets under custody and/or administration (AUC/A), marking an 18% and 14% increase, respectively, from the previous year.
Capital and Liquidity Ratios
BNY Mellon maintains strong capital ratios, with a Common Equity Tier 1 (CET1) ratio of 11.9% as of September 30, 2024, compared to 11.4% at June 30, 2024. The Tier 1 leverage ratio was reported at 6.0%.
| Capital Metric | Value |
|---|---|
| CET1 Ratio | 11.9% |
| Tier 1 Leverage Ratio | 6.0% |
| Return on Common Equity (ROE) | 12.0% |
| Return on Tangible Common Equity (ROTCE) | 22.8% |
Noninterest Expense
Noninterest expenses for the third quarter of 2024 totaled $3.100 billion, which is stable compared to the previous quarter and slightly increased compared to the same period last year.
| Expense Category | 3Q24 ($ million) | 3Q23 ($ million) |
|---|---|---|
| Staff Expense | $1,736 | $1,755 |
| Software and Equipment | $491 | $452 |
| Professional Services | $370 | $368 |
| Total Noninterest Expense | $3,100 | $3,089 |
Shareholder Returns
In the third quarter of 2024, BNY Mellon returned $1.1 billion to its common shareholders, including $725 million in share repurchases and $353 million in dividends. The quarterly cash dividend was increased by 12% to $0.47 per share.
| Shareholder Returns | Amount |
|---|---|
| Quarterly Cash Dividend per Share | $0.47 |
| Common Shares Repurchased | 11.1 million |
| Total Shareholder Returns | $1.1 billion |
Market Capitalization and Stock Performance
As of September 30, 2024, BNY Mellon's market capitalization was approximately $52.2 billion, with a closing stock price of $71.86 per share.
| Stock Performance | Value |
|---|---|
| Market Capitalization | $52.248 billion |
| Closing Stock Price | $71.86 |
| Book Value per Common Share | $51.78 |
| Tangible Book Value per Common Share | $28.01 |
How The Bank of New York Mellon Corporation (BK) Makes Money
Revenue Streams
Revenue Streams
The Bank of New York Mellon Corporation (BK) generates revenue through various segments, primarily focusing on investment services, wealth management, and treasury services. For the third quarter of 2024, total revenue was reported at $4.648 billion, an increase of 5% compared to the same period in 2023.
| Revenue Component | 3Q24 (in millions) | 3Q23 (in millions) | Growth Rate |
|---|---|---|---|
| Total Revenue | $4,648 | $4,420 | 5% |
| Net Interest Income | $1,048 | $1,016 | 3% |
| Investment Services Fees | $2,344 | $2,230 | 5% |
| Investment Management Fees | $794 | $777 | 2% |
| Foreign Exchange Revenue | $175 | $154 | 14% |
| Financing-related Fees | $53 | $45 | 18% |
Fee-Based Revenue
Fee-based revenue is a significant part of BK's income. In the third quarter of 2024, fee revenue accounted for 73% of total revenue, affirming the company's focus on a fee-driven business model. This model has proven resilient, with fee and other revenue totaling $3.404 billion, reflecting a 5% increase year-over-year.
Investment Management and Performance Fees
Investment management and performance fees for the third quarter of 2024 were $795 million, up from $778 million in the third quarter of 2023. The increase is attributed to higher market values and client inflows, even though performance fees saw a decline.
| Investment Management Fees | 3Q24 (in millions) | 3Q23 (in millions) | Growth Rate |
|---|---|---|---|
| Investment Management Fees | $794 | $777 | 2% |
| Performance Fees | $13 | $30 | -57% |
Net Interest Income
Net interest income for BK was $1.048 billion in the third quarter of 2024, showing a slight increase from $1.016 billion in the previous year. The net interest margin was reported at 1.16% for the quarter.
Assets Under Custody and Management
As of September 30, 2024, BK had assets under custody and/or administration (AUC/A) totaling $52.1 trillion, which represents a 14% increase from the previous year. The assets under management (AUM) reached $2.14 trillion, up 18% year-over-year.
| Assets Under Custody and Management | 3Q24 (in trillions) | 3Q23 (in trillions) | Growth Rate |
|---|---|---|---|
| AUC/A | $52.1 | $45.7 | 14% |
| AUM | $2.14 | $1.82 | 18% |
Cost Management
Noninterest expenses for the third quarter of 2024 were $3.100 billion, slightly up from $3.089 billion in the same quarter of 2023. The increase reflects higher investments in technology and personnel, offset by efficiency savings.
Dividends and Share Repurchases
In July 2024, BK's Board of Directors approved a 12% increase in the quarterly cash dividend, raising it from $0.42 to $0.47 per share. During the third quarter, BK repurchased 11.1 million common shares at an average price of $65.10, totaling $725 million.
| Shareholder Returns | 3Q24 | 3Q23 |
|---|---|---|
| Quarterly Dividend per Share | $0.47 | $0.42 |
| Shares Repurchased (millions) | 11.1 | — |
| Repurchase Cost (in millions) | $725 | — |
Conclusion on Financial Health
As of September 30, 2024, BK reported a total shareholders' equity of $41.992 billion, with a common stock dividend payout ratio of 32%. The return on common equity was 12.0%, reflecting robust profitability.
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Article updated on 8 Nov 2024
Resources:
- The Bank of New York Mellon Corporation (BK) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of The Bank of New York Mellon Corporation (BK)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View The Bank of New York Mellon Corporation (BK)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.