The Bank of New York Mellon (BNY) Q4 2023 earnings summary

Executive summary

• FY23 revenue was $17.502bn, up 7% YoY; adjusted EPS was $5.05, up 10%, and adjusted ROTCE was 21.6%.

• Performance reflected 24% growth in net interest revenue and higher investment services fees, partly offset by lower investment management and FX revenue; efficiency savings were ~$600mm.

• 2023 results exceeded the initial-year outlook; strategic priorities were clarified and improved medium-term targets announced for the firm and segments.

Financial highlights

• FY23 total revenue was $17.502bn vs. $16.377bn in FY22; common net income was $3.148bn vs. $2.362bn, and diluted EPS was $4.00 vs. $2.90.

• 4Q23 revenue was $4.311bn, up 10% YoY; adjusted revenue was $4.461bn, up 2%. Common net income was $256mm and diluted EPS was $0.33, or $1.28 adjusted.

• FY23 noninterest expense was $13.168bn, up 1% YoY; adjusted expense was $12.302bn, up 3% excluding notable items.

• 4Q23 noninterest expense was $3.868bn, up 20% YoY; adjusted expense was $3.116bn, up 4%. Reported results included a $385mm securities portfolio repositioning loss and a $505mm goodwill impairment.

Outlook and guidance

• 2024 outlook: fee revenue up YoY, net interest revenue down ~10%, expenses flat excluding notable items, total payout ratio ≥100%, and operating leverage ≥0 bps.

• Guidance assumes higher organic growth, modest FX revenue normalization and mid-single-digit equity market appreciation; NIR assumptions include reinvestment yields, deposit margin compression and modest runoff amid continued QT.

• Medium-term targets: pre-tax margin ≥33%, ROTCE ≥23%, Tier 1 leverage ratio 5.5–6% and CET1 ratio ~11%.

• 2024 priorities include delivering more for clients, improving operations and strengthening culture.