The Bank of New York Mellon (BK) Q4 2024 earnings summary

Executive summary

• Achieved record net income of $4.3 billion and record revenue of $18.6 billion for 2024, with a return on tangible common equity of 23% and four consecutive quarters of positive operating leverage.

• Accelerated transformation initiatives, including a new commercial coverage model, acquisition of Archer, and transition to a Platform Operating Model, with 13,000 employees transitioned in 2024 and a target of over 80% by end of 2025.

• Returned $4.4 billion to shareholders in 2024 through dividends and share repurchases, with a 102% payout ratio.

• Celebrated the company's 240th anniversary, modernized the brand and logo, and supported talent recruitment and employee engagement.

• Introduced innovative client solutions and completed the acquisition of Archer, expanding managed account capabilities.

Financial highlights

• Total revenue of $18.6 billion, up 5% year-over-year; net income up 41% year-over-year; EPS up 49% year-over-year.

• Expenses of $12.7 billion, down 4% year-over-year; pre-tax margin was 31% (reported), 33% (excluding notable items); EPS of $5.80 (reported), $6.03 (adjusted, up 19% year-over-year).

• Fourth quarter revenue of $4.85 billion, up 11% year-over-year; net income $1.13 billion, up 598% year-over-year; EPS $1.54, up 633% year-over-year.

• Assets under custody/administration (AUCA) of $52.1 trillion, up 9% year-over-year; assets under management (AUM) of $2 trillion, up 3%.

• Return on tangible common equity: 23% (reported), 24% (excluding notable items); ROE 12.2% (reported), 13.6% (adjusted).

Outlook and guidance

• Expecting positive operating leverage in 2025, with net interest income projected to rise mid-single digits year-over-year and fee revenue to increase.

• Expenses (excluding notable items) to grow 1%-2% year-over-year; effective tax rate for 2025 anticipated at 22%-23%.

• Plan to return approximately 100% of 2025 earnings to shareholders, with buybacks calibrated to market conditions.

• CET1 ratio target remains at 11.2%; Tier 1 leverage ratio target at 5.5%-6%.

• Medium-term targets: pre-tax margin ≥33%, ROTCE ≥23%.