That responsibility motivates us every day. To help our clients achieve their ambitions. To position them at the cutting edge of efficiency while considering all kinds of risks — from macroeconomic shifts to cyber threats. To improve financial performance for the benefit of our shareholders. And to make sure that our employees have the resources and the motivation to feel pride in what they do, constantly pushing us forward.
Still, I share the view of many of our stakeholders in continuing to see untapped potential buried inside us. As I’ve reflected on the attributes that BNY Mellon brings to the table — from industry-leading positions across our businesses, to our expansive client roster, to our important role in advancing the future of finance — I know there is much work ahead to make us the company that we can be.
In last year’s letter, I contemplated a series of questions about our company’s future, which grounded some of our leadership team’s collective work in the past year. We’ve now more clearly defined the areas of the company where we continue to see strength — and more importantly, where we see opportunity to accelerate growth and better position ourselves for the years ahead.
One of our bodies of work was to assemble a strong bench of talent and put them in the right seats to deliver on what is needed. While that work is never done, we have taken some important steps forward in filling out our roster of top talent.
Throughout 2023, we worked hard on several fronts simultaneously because we insisted on increasing the internal tempo of the organization and delivering the beginnings of superior financial results while laying some of the foundation for a multi-year transformation. As we executed this work, we introduced three strategic pillars to guide us:
**According to S&P Global, company assets were adjusted on a best-efforts basis for pending mergers, acquisitions and divestitures as well as M&A deals that closed after the end of the reporting period through March 31, 2023. Assets reported by non-U.S. dollar filers were converted to dollars using period-end exchange rates. Total assets were taken on an “as-reported” basis, and no adjustments were made to account for differing accounting standards. The majority of the banks were ranked by total assets as of December 31, 2022 and the data was compiled April 12, 2023.
of Fortune 100 companies
of the Top 100
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banks
Global
Custodian 1
Global provider of
Issuer Services 2
Global
Custodian 3
Global U.S. dollar
payments clearer 4
Global provider of
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Management 5
Global Asset Manager6 6
Global provider of
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Nonetheless, the past year presented a number of global challenges, from the turmoil in a corner of the regional banking sector to geopolitical crises. We saw a mixed economic picture, especially outside of the U.S. Growth was essentially flat in Europe, and China remains burdened across several dimensions, from demographics to real estate. Around the world, the quickening pace of generative Artificial Intelligence was another watershed moment of 2023, raising a number of questions — from its tremendous potential to improve productivity, the need for robust governance to consider and manage novel risks, to its potential impact on labor markets. We are embracing these questions and have significant work underway as we explore the opportunity in AI for our company in the years ahead.
Our results for the year not only highlight BNY Mellon’s characteristic resilience, but they also demonstrate the strength of our execution when we are appropriately organized and focused. We reported earnings per share of $3.87 on $17.5 billion of revenue, up 7% year-over-year; expenses of $13.3 billion, up 2% year-over-year; and return on common equity of 9%. Adjusting for the impact of notable items, EPS of $5.05 increased by 10% on $17.7 billion of revenue, which was up 5% year-over-year; expenses were $12.3 billion and return on tangible common equity was 22%. 1,2
Pershing benefits from a strong position in the U.S. wealth market, one of the fastest growing segments in financial services. Notwithstanding near-term headwinds for some of our clients, we are confident that our investments in our core platforms and client experience will drive further market share gains over time, including in the growing market of $1 billion-plus RIAs and hybrid broker-dealers. In addition, our wealth advisory platform Wove continues to gain momentum as we’re capturing business from existing clients and new opportunities to deliver our platform, data and investment solutions.
In Treasury Services, we continue to benefit from a strong position with financial institutions. We’re one of the top five U.S. dollar payments clearers in the world, clearing roughly $2.4 trillion of U.S. dollar payments daily, on average. Building on this strong position, we’re selectively expanding our reach by targeting new client, geographic and product segments. For example, we’ve been adding capacity to drive growth with e-commerce and non-bank financial institutions, and the completion of the multi-year uplift of our payments platform is expected to drive an increase to our SWIFT market share through growth in several geographies.
Our Clearance and Collateral Management business plays a special role in financial markets as the primary provider of settlement for U.S. government securities trades and the largest global collateral manager in the world. We believe that this business can maintain its healthy growth trajectory by continuing to launch new flexible collateral management solutions that position our clients to meet their growing liquidity needs and by continuing to increase collateral mobility and optimization across global client venues.
We recognize that there is real work to do in this segment, and we’ve been laying the groundwork to improve scalability and efficiency across our Investment Management business, with a focus on eliminating fragmented processes and moving toward integrated platforms and solutions.
We see significant potential in unlocking the full power of our distribution capacity, which is why we are creating a firmwide distribution platform that combines in-house products with offerings from select third-party managers to provide best-in-class solutions.
Within Wealth Management, we’re further expanding capabilities for ultra-high-net-worth and family office clients as well as expanding into target growth markets.
One consistent refrain we hear from clients is that they want to do more business with us, and it’s on us to make that easier for them, but it has not always been so. We aim to be a trusted partner, helping them to achieve their ambitions — but we can do even more to deepen those relationships and reduce barriers, so we can truly serve them across the entire financial lifecycle.
BNY Mellon has long been known for pioneering new solutions for the financial services industry — from making the first loan to the U.S. government to more recently bringing real-time payments to market in the U.S.
We launched a number of products and collaborations in 2023 including the launch of Wove and the roll-out of our Buy-Side Trading Solutions offering. But it goes well beyond that. All our businesses strive to bring new client solutions to the market — from Bankify to real-time payments on FedNow to white-labeling LiquidityDirect to BNY Mellon Advisors — and we filed more patents than ever before in 2023.
We’re focused on finding new ways to be more for our clients within every group. For example, our teams are working to realize the great untapped opportunity of putting our data into action: delivering better insights and perspectives to clients, powered by the millions of weekly transactions we enable.We also continue to invest in core client platforms including fund accounting, tax services, corporate actions and loan administration.
Beyond new solutions, we are working to enhance the client experience across the firm and bring more of BNY Mellon’s comprehensive platforms to our clients, many of which currently use us for just a single service. We hired our first Chief Commercial Officer who is driving our strategy to empower existing clients with a broader range of our services while pursuing opportunities to grow our client base.
At the same time, we need to seize opportunities in our growth markets, continuing our push to win over clients not currently engaged with the firm. Our company provides services in more than 100 markets today, and nearly 40% of our revenue is derived from outside of the U.S. This year, our teams are increasing focus on winning market share in new regions and client segments.
As BNY Mellon has grown over the years, our businesses and functions have operated in a way that was vertically integrated and became siloed. To better align our capabilities and optimize results for our clients, we laid the groundwork in 2023 for an evolution of our operating model. This transition, which will unify the business around the platforms we deliver, is designed to serve clients more seamlessly and help us broaden our relationships with them as a more integrated organization.
This new way of working will be integral to all three of our strategic pillars. Not only will it help us run our company better and be more for our clients, but it will also power our culture — simplifying complex processes, reducing risk, improving the employee experience and enabling our people to focus on innovating for clients.
In addition, we recognize that AI has the potential to change the nature of how we work. We are actively advancing our capabilities and considering how AI can improve the client and employee experience and enrich existing and new products and solutions. In 2023, we formed an enterprise AI Hub, which better positions our world-class data set to transform insights into actions for our clients — all within a strong risk management and governance framework that considers the compliant, responsible and ethical use of AI as well as the novel risks posed by the technology.
Resilience forms the foundation for running our company better. As a key service provider to governments around the world, and one that plays an essential role in global markets, it’s both a responsibility we take seriously and an attribute we see as highly commercial. Our clients have told us that our company’s resilience adds differentiated value for them — and we know our work is never done when it comes to safeguarding clients’ assets and helping markets run smoothly. Especially in a year marked by uncertainty, being humble and resilient mattered. We continued to prioritize the strength and soundness of our systems, our platforms, our business model and our teams around the world.
Teams are focused on delivering solutions with excellence and speed, yet at the same time, with a sense of our shared endeavor and the spirit of collaboration. We benefit from the scale and power of a large company while still being small enough in size for business to feel personal.
Others also recognize us for this special culture. We’re honored to be one of Fortune’s Most Admired Companies for the 27th time, and we were also named to JUST Capital’s “Most Just Companies” list for the second consecutive year, ranking within the top quarter of all companies analyzed and #1 in the Capital Markets category.