The Bank of New York Mellon Corporation (BNY) reported its fourth-quarter earnings on January 15, 2025, showcasing strong financial performance amid ongoing transformation efforts. For the fourth quarter, total revenue reached $4.8 billion, an increase of 11% year-over-year. For the full year 2024, total revenue totaled $18.6 billion, a 5% year-over-year increase.

The company achieved net income of $1.2 billion for the fourth quarter and a full-year net income of $4.3 billion. This results reflect a robust return on tangible common equity (ROTCE) of 23% for the year. Earnings per share (EPS) were reported at $1.54, with an adjusted EPS of $1.72, marking a 33% increase from the prior year. For the full year, EPS stood at $5.80, increasing 49% from 2023.

In terms of operating efficiency, BNY achieved pre-tax margins of 30% in the fourth quarter, down sequentially but showing a solid operating leverage of 968 basis points across the year. Adjusted pre-tax margins for the fourth quarter were 34%, reflecting the effects of notable expenses, particularly related to litigation and severance, which amounted to $165 million for the quarter.

Fee revenue in the fourth quarter was $3.5 billion, up 9% year-over-year, driven by strong performance in investment services, which saw a 9% increase, reflecting higher market values and client activity. Investment management and performance fees rose 9%, bolstered by elevated asset values. The firm reported a net interest income of $1.2 billion, up 8% year-over-year, primarily due to improved yields on the investment securities portfolio.

For the year 2024, BNY recorded fee revenue of $13.6 billion, an increase of 6% from the previous year. Despite a slight decrease in net interest income for the full year to $4.3 billion, the company benefitted from robust demand for investment services.

Balance sheet metrics showed total assets at $416.1 billion, with assets under custody and/or administration (AUC/A) reaching $52.1 trillion, representing a 9% year-over-year increase. Assets under management (AUM) were $2 trillion, slightly up by 3%. The company maintained a strong capital position, closing out 2024 with a Common Equity Tier 1 (CET1) ratio of 11.2% and a Tier 1 leverage ratio of 5.7%.

BNY also demonstrated solid capital return to shareholders, distributing $4.4 billion throughout 2024, equating to a total payout ratio of 102%. The firm returned $1.1 billion in capital to common shareholders during the fourth quarter via dividends and share repurchases.

As BNY moves into 2025, the firm anticipates continuing modest growth in fee revenue and projects net interest income to increase in the mid-single-digit percentage range year-over-year, despite potential challenges in the economic landscape. The company plans to maintain a focus on efficiency and innovation, particularly in its platform transformation efforts.