Q2 2024 Bank of New York Mellon Corp Earnings Call

Operator: Good morning, and welcome to the 2024 Second Quarter Earnings Conference Call hosted by BNY. At this time, all participants are in a listen-only mode.

Operator: Good morning and welcome to the 2024 second quarter earnings conference call hosted by BNY. At this time, our participants are in a listen-only mode. Later, we will conduct a question-and-answer session.

Speaker Change: Good morning and welcome to the 2024 Second Quarter Earnings Conference Call hosted by BNY. At this time, all participants are in a listen-only mode.

Operator: Later, we will conduct a question and answer session. Please note that this conference call and webcast will be recorded and will consist of copyrighted material. You may not record or rebroadcast these materials without BNY's consent.

Speaker Change: Later, we will conduct a question and answer session.

Operator: Please note that this conference call and webcast will be recorded and will consist of copyrighted material. You may not record or re-broadcast these materials without BNY's consent.

Speaker Change: Please note that this conference call and webcast will be recorded and will consist of copyrighted material.

Speaker Change: You may not record or rebroadcast these materials without BNY's consent.

Marius Merz: I will now turn the call over to Marius Merz, BNY Head of Investor Relations. Please go ahead.

Marius Merz: I will now turn the call over to Marius Merz, BNY's Head of Investor Relations. Please go ahead. Thank you, operator. Good morning, everyone, and thank you for joining us, with Robin Vince, President and Chief Executive Officer, and Dermot McDonogh, our Chief Financial Officer. As always, we will reference our financial highlights presentation, which can be found on the investor relations page of our website at bny.com. And I'll note that our remarks will contain forward-looking statements and non-GAAP measures. However, actual results may differ materially from those projected in the forward-looking statement.

Speaker Change: I will now turn the call over to Marius Merz, BNY Head of Investor Relations.

Marius Merz: Thank you, Operator.

Robin Vince: Good morning, everyone, and thank you for joining us. I'm here with Robin Vince, President and Chief Executive Officer, and Dermot McDonogh, our Chief Financial Officer. As always, we will reference our Financial Highlights presentation, which can be found on the Investor Relations page of our website at bny.com. And I'll note that our remarks will contain forward-looking statements and non-GAAP measures. Actual results may differ materially from those projected in the forward-looking statements. Information about these statements and non-GAAP measures are available in the earnings press release, financial supplement, and financial highlights presentation, all available on the Investor Relations page of our website.

Marius Merz: Please go ahead.

Marius Merz: Thank you, Operator. Good morning, everyone, and thank you for joining us.

Marius Merz: I'm here with Robin Vince, President and Chief Executive Officer, and Dermot McDonogh, our Chief Financial Officer.

Marius Merz: As always, we will reference our financial highlights presentation, which can be found on the investor relations page of our website at bny.com.

Marius Merz: And I'll note that our remarks will contain forward-looking statements and non-GAAP measures.

Marius Merz: Actual results may differ materially from those projected in the forward-looking statements.

Marius Merz: Information about these statements and non-GAAP measures is available in the Onyx Press release, Financial Supplement, and Financial Highlights presentation, all available on the Investor Relations page of our website. Forward-looking statements made on this call speak only as of today, July 12, 2024, and will not be updated. With that, I will turn it over to Robert. Thanks, Marius.

Marius Merz: Information about these statements and non-GAAP measures are available in the Onyx Press release, Financial Supplement, and Financial Highlights presentation.

Robin Vince: Forward-looking statements made on this call speak only as of today, July 12, 2024, and will not be updated.

Marius Merz: All available on the Investor Relations page of our website.

Marius Merz: Forward-looking statements made on this call speak only as of today, July 12, 2024, and will not be updated.

Robin Vince: With that, I will turn it over to Robin. Thanks, Marius. Good morning, everyone, and thank you for joining us. Before Dermot reviews the financials in greater detail, I'd like to start with a few remarks about our progress in the quarter. In short, we delivered another quarter of improved financial performance, with positive operating leverage on the back of solid fee growth and continued expense discipline. And we continued to make tangible progress on our path to be more for our clients, to run our company better, and to power our culture. Last month, we celebrated our company's 240th anniversary with our people and many of our clients.

Robin Antony Vince: Good morning, everyone, and thank you for joining us. Before Dermot reviews the financials in greater detail, I'd like to start with a few remarks about our progress during the quarter. In short, we delivered another quarter of improved financial performance, with positive operating leverage on the back of solid fee growth and continued expense discipline. And we continued to make tangible progress on our path to be more for our clients, to run our company better, and to power our culture. Last month, we celebrated our company's 240th anniversary with our people and many of our clients. Even with this rich history of operating across four centuries, I believe that our best days remain ahead of us.

Speaker Change: With that, I will turn it over to Robin.

Robin Antony Vince: Thanks Marius. Good morning everyone and thank you for joining us.

Robin Antony Vince: Before Dermot reviews the financials in greater detail, I'd like to start with a few remarks about our progress in the quarter.

Robin Antony Vince: In short, we delivered another quarter of improved financial performance.

Robin Antony Vince: with positive operating leverage on the back of solid fee growth and continued expense discipline.

Robin Antony Vince: And we continued to make tangible progress on our path to be more for our clients, to run our company better, and to power our culture.

Robin Antony Vince: Last month, we celebrated our company's 240th anniversary with our people and many of our clients.

Robin Vince: Even with this rich history of operating across four centuries, I believe that our best days remain ahead of us. That bank with around half a million dollars of capital in 1784, today overseas roughly 50 trillion dollars in assets and powers platforms across payment, security settlement, wealth, investments, collateral, trading, and more for clients in over a hundred markets around the world. As the world changes and global financial markets evolve, so do we.

Robin Antony Vince: Even with this rich history of operating across four centuries, I believe that our best days remain ahead of us.

Robin Antony Vince: That bank, with around half a million dollars of capital in 1784, today oversees roughly 50 trillion dollars in assets and powers platforms across payments, security, settlement, wealth, investments, collateral, trading, and more for clients in over 100 markets around the world. As the world changes and global financial markets evolve, so will we. Earlier this year, in January, you heard us lay out our strategy, which maps out what we need to get done and how we need to do it.

Robin Antony Vince: That bank, with around half a million dollars of capital in 1784, today oversees roughly 50 trillion dollars in assets.

Robin Antony Vince: and Powers Platforms across payments, security, settlement, wealth, investments, collateral, trading and more for clients in over 100 markets around the world.

Robin Antony Vince: As the world changes and global financial markets evolve, so do we.

Robin Vince: Earlier this year, in January, you heard us layout our strategy, which maps out what we need to get done and how we need to do it. Last month, we introduced changes to our logo and simplified and modernized our company brand to BNY to improve the market's familiarity with who we are and what we do. This rebranding better aligns the perception of our company to the substance of what we're doing to unlock our full potential as one BNY. A positive, operating leverage in the second quarter. Reported earnings per share of $1.52 were up 16% year over year, and excluding notable items, earnings per share of $1.51 were up 9%.

Robin Antony Vince: Earlier this year, in January , you heard us lay out our strategy, which maps out what we need to get done and how we need to do it.

Robin Antony Vince: Last month, we introduced changes to our logo and simplified and modernized our company brand to BNY to improve the market's familiarity with who we are and what we do. This rebranding better aligns the perception of our company to the substance of what we're doing to unlock our full potential as one BNY. Now, referring to page two of the financial highlights presentation, BNY delivered solid EPS growth as well as pre-tax margin and ROTCE expansion once again on the back of positive operating leverage in the second quarter. Reported earnings per share of $1.52 were up 16% year over year, and excluding notable items, earnings per share of $1.51 were up 9%.

Robin Antony Vince: Last month, we introduced changes to our logo and simplified and modernized our company brand to BNY to improve the market's familiarity with who we are and what we do.

Robin Antony Vince: This rebranding better aligns the perception of our company to the substance of what we're doing to unlock our full potential as one BNY.

Robin Antony Vince: Now, referring to page 2 of the Financial Highlights presentation.

Robin Antony Vince: BNY delivered solid EPS growth, as well as pre-tax margin and ROTCE expansion, once again on the back of positive operating leverage in the second quarter.

Robin Antony Vince: Reported earnings per share of $1.52 were up 16% year-over-year, and excluding notable items, earnings per share of $1.51 were up 9%.

Robin Vince: Total revenue of $4.6 billion was up 2% year over year. This included 5% growth in investment services fees led by continued strength, clearance and collateral management, asset servicing, and treasury services, as well as 16% growth in foreign exchange revenue. That interest income decreased by 6%. Fences of $3.1 billion was down 1% year over year, including notable items. Expenses were up 1%, reflecting further investments in our people and technology, while we also continued to realize greater efficiencies. Arjun was 33%. And in what is seasonally our strongest quarter, we reported a return on tangible common equity of 25%, 24%, excluding notable items. These financial results were against the backdrop of a relatively constructive operating environment, the market calling for a gradual and shallow easing of policy rates, inflation pressures easing, and investor confidence growing.

Robin Antony Vince: Total revenue of $4.6 billion was up 2% year over year. This included 5% growth in investment services, led by continued strength in clearance and collateral management, asset servicing, and treasury servicing. Market Calling for a Gradual and Shallow Easing of Policies

Robin Antony Vince: Total revenue of $4.6 billion was up 2% year-over-year.

Robin Antony Vince: This included 5% growth in investment services fees, led by continued strength in clearance and collateral management, asset servicing, and treasury services.

Robin Antony Vince: as well as 16% growth in foreign exchange revenue.

Robin Antony Vince: Net interest income decreased by 6%.

Robin Antony Vince: Expenses of $3.1 billion, down 1% year over year.

Robin Antony Vince: Including notable items, expenses were up 1%, reflecting further investments in our people and technology, while we also continued to realize greater efficiencies.

Robin Antony Vince: Margin was 33%.

Robin Antony Vince: And in what is seasonally our strongest quarter, we reported a return on tangible common equity of 25%, 24% excluding notable items.

Robin Antony Vince: These financial results were against the backdrop of a relatively constructive operating environment, the market calling for a gradual and shallow easing of policy rates, inflation pressures easing, and investor confidence growing.

Robin Antony Vince: Inflation Pressures Easing and Investor Confidence Growing, I don't know what was the... Once again, our resilient business and our strength to support clients through extreme stress scenarios. The test confirmed that our preliminary stress capital buffer requirement remains at the regulatory floor of 2.5%, and we increased our quarterly common dividend by 12%. $0.47 per share, Transcribed by https://otter.ai, represented one of the more significant market structure changes that are in Unknown Speaker 1-1-1, gives us the opportunity to help clients through major shifts, further strengthening their trust in us and deepening our relationship.

Robin Vince: On average, equity market values increased, while fixed income markets finished slightly lower compared to the first quarter. A couple of weeks ago, the Federal Reserve released the results of its annual bank stress test, which once again showcased our resilient business model and our strength to support clients for extreme stress scenarios. The test confirmed that our preliminary stress capital buffer requirement remains the regulatory floor of 2.5%. And we increased our quarterly common dividend by 12% to 47 cents per share, starting this quarter.

Robin Antony Vince: On average, equity market values increased, while fixed income markets finished slightly lower compared to the first quarter.

Robin Antony Vince: A couple of weeks ago, the Federal Reserve released the results of its annual bank stress test.

Robin Antony Vince: which once again showcased our resilient business model and our strength to support clients through extreme stress scenarios.

Robin Antony Vince: The test confirmed that our preliminary stress capital buffer requirement remains at the regulatory floor of 2.5%.

Robin Antony Vince: And we increased our quarterly common dividend by 12% to $0.47 per share starting this quarter.

Robin Vince: In May, the transition to T plus 1 settlement in the US, Canadian, and Mexican markets represented one of the more significant market structure changes that our industry has seen in a couple of decades. The NY's critical role in the financial system gives us the opportunity to help clients through major shifts like this, further strengthening their trust in us and deepening our relationship. with them. By running the company better, we are starting to capitalise on BNY's truly powerful combination of security services, market and wealth services, and our investments and wealth businesses to serve our clients more effectively across the entire financial life cycle.

Robin Antony Vince: In May, the transition to T plus one settlement in the US, Canadian and Mexican markets represented one of the more significant market structure changes that our industry has seen in a couple of decades.

Robin Antony Vince: BNY's critical role in the financial system gives us the opportunity to help clients through major shifts like this, further strengthening their trust in us and deepening our relationships with them.

Robin Antony Vince: By running the company better, we are starting to capitalize on BNY's truly powerful combination of security services, market, and wealth services, and our investment and wealth management across the entire financial life cycle. As an example, this past quarter, BNY was awarded a significant mandate by a premier global asset manager with over $100 billion in assets under management.

Robin Antony Vince: By running the company better, we are starting to capitalize on BNY's truly powerful combination of security services, market and wealth services, and our investment and wealth businesses.

Robin Antony Vince: to serve our clients more effectively across the entire financial life cycle.

Robin Vince: As an example, this past quarter, BNY was awarded a significant mandate by a premier global asset manager with over $100 billion in assets under management. We were selected based on our ability to deliver custody, fund servicing, ETF and digital fund services, treasury services, and Pershing. Our holistic offering will power their future growth strategy. In another example, AIA, the Pan-Asian Life Insurance Group, announced a new collaboration with BNY and BlackRock as AIA transforms its investment platform. AIA has announced that they will implement BNY's specialised investment operations, data management services, and technology with BlackRock's Aladdin to create a connected and scalable ecosystem to support the company's evolving investment activities.

Robin Antony Vince: As an example, this past quarter, BNY was awarded a significant mandate by a premier global asset manager with over $100 billion in assets under management.

Robin Antony Vince: We were selected based on our ability to deliver custody, fund servicing, ETF and digital fund services, treasury services, and purging. Our holistic offering will power their future growth, and another. AIA, the Pan-Asian Life Insurance company, announced a new collaboration with BNY and BlackRock as AIA transforms its investment platform.

Robin Antony Vince: We were selected based on our ability to deliver custody, fund servicing, ETF and digital fund services, treasury services, and purging. Our holistic offering will power their future growth strategy.

Robin Antony Vince: In another example, AIA, the Pan-Asian Life Insurance Group, announced a new collaboration with BNY and BlackRock as AIA transforms its investment platform.

Robin Antony Vince: AIA has announced that it will implement BNY's specialized investment operations, data management services, and technology with BlackRock's Aladdin to create a connected and scalable ecosystem to support the company's evolving investment activities. We also continue to be pleased with the growing interest in our wealth advisory platform, WOVE. Part of its Annual Innovators Awards for 2024 at the Insight. Slideship Wealth Services Conference in June. New Solutions on the Platform, Woven Vesta, a one-stop client

Robin Antony Vince: AIA has announced that they will implement BNY's Specialized Investment Operations

Robin Antony Vince: Data Management Services, and Technology.

Robin Antony Vince: with BlackRocksAladdin.

Robin Antony Vince: to create a connected and scalable ecosystem.

Robin Vince: We also continue to be pleased with the growing interest in our Wealth Advisory platform, Wove. Global Finance recently named Wove as one of the top three global financial innovations as part of its annual Innovators Awards for 2024. At Insight, Pershing's annual flagship Wealth Services Conference in June, we announced a suite of new solutions on the platform. Wove Investor, a one-stop client portal; Wove Data, a cloud data platform designed for financial professionals at wealth management firms; and portfolio solutions, a set of enhancements to the platform that will help advisors move more efficiently from researching investment products, aligning them to a client's risk objectives, and adding them to a portfolio.

Robin Antony Vince: to support the company's evolving investment activities.

Robin Antony Vince: We also continue to be pleased with the growing interest in our wealth advisory platform, WOVE.

Robin Antony Vince: Global Finance recently named Wove as one of the top three global financial innovations as part of its annual innovators awards for 2024.

Robin Antony Vince: At Insight, Pershing's annual flagship wealth services conference in June , we announced a suite of new solutions on the platform.

Robin Antony Vince: Wove Investor, a one-stop client portal. Wove Data, a cloud data platform designed for financial professionals at wealth management firms.

Robin Antony Vince: and Portfolio Solutions, a set of enhancements to the platform that will help advisors move more efficiently from researching investment products to aligning them to a client's risk objectives and adding them to a portfolio.

Robin Vince: We also introduced a new one BNY offering that enables clients to easily access multiple BNY capabilities, including our managed accounts platform, asset allocation and manager selection, investment management products, customized tax solutions, the interoperable Wove platform for advisors, and custody and clearing services from Pershing. For a comprehensive, unified package leveraging the breadth of BNY to make clients' wealth advisors' lives easy. And we have proofpoints. Example, a fast-growing, full-service regional bank recently selected Pershing to provide custody and clearing services, private wealth business, but they are also adopting Azeri, driver's cash management, direct indexing and private banking. As we've said many times, our culture and people are a critical part of being more for our clients.

Robin Antony Vince: Unknown Speaker 0, [inaudible] This enables clients to easily access multiple BNY capabilities, including managed accounts, Asset Allocation and Management, Investment Management, Customized Tax Solutions, the interoperable WOVE platform for advisors, and Custody and Clearing Services from Pershing through a comprehensive, unified package, leveraging the breadth of BNY to make their wealth advisors' lives easier. And we have proof points.

Robin Antony Vince: We also introduced a new 1BNY offering that enables clients to easily access

Robin Antony Vince: Multiple BNY Capabilities

Robin Antony Vince: Including our Managed Accounts Platform, Asset Allocation and Manager Selection, Investment Management Products, Customized Tax Solutions, the Interoperable WOVE Platform for Advisors, and Custody and Clearing Services.

Robin Antony Vince: from Pershing for a comprehensive unified package leveraging the breadth of BNY to make clients' wealth advisors' lives easier.

Robin Antony Vince: For example, a fast-growing, full-service regional bank recently selected Pershing to provide custody and clearing services to private wealth businesses, but they are also adopting advisory, driver's cash management, direct indexing, and private banking. As we've said many times, our culture, Summer, we're welcoming our largest ever Summer class, and Analyst Class have over 3,500 individuals chosen from over 150,000 applications. And we recently announced several new appointments to our leadership... Shannon Hobbs, our new Chief People Officer, joined us in June. Leanne Russell will join us in September as Chief Information Officer and Global Head, and Neha.

Robin Antony Vince: And we have proof points.

Robin Antony Vince: Example, a fast-growing, full-service regional bank recently selected Pershing to provide custody and clearing services.

Robin Antony Vince: Private Wealth Business

Robin Antony Vince: But they are also adopting...

Robin Antony Vince: Advisory, Dreyfus Cash Management, Direct Indexing and Private Banking.

Robin Antony Vince: As we've said many times, our culture and people are a critical part of being more for our clients and running our company better.

Robin Vince: Lawrence, and Running Our Company Better. We are pleased to see that our actions are enabling us to be a top talent destination for recent graduates and experienced leaders alike.

Robin Antony Vince: We are pleased to see that our actions are enabling us to be a top talent destination for recent graduates and experienced leaders alike.

Robin Vince: This summer we're welcoming our largest ever intern and analyst classes, a total of over 3,500 individuals chosen from over 150,000 applications. And we recently announced several new appointments to our leadership team. Jan and Hobbs, our new Chief People Officer, joined us in June. The Anne Russell will join us in September as Chief Information Officer and Global Head of Engineering. Jose Manaya will also join us in September. Lead, be in wise, investments and wealth. To wrap up, halfway through the year, we're pleased with the progress that we have made and how it is reflected in both improved financial performance to date, as well as our building momentum.

Robin Antony Vince: This summer, we're welcoming our largest ever intern and analyst classes, a total of over 3,500 individuals chosen from over 150,000 applications.

Robin Antony Vince: And we recently announced several new appointments to our leadership team.

Robin Antony Vince: Shannon Hobbs, our new Chief People Officer, joined us in June .

Robin Antony Vince: Leanne Russell will join us in September as Chief Information Officer and Global Head of Engineering. Jose Menea will also join us in September . Lead BNY's investments and wealth.

Robin Antony Vince: We'll also... BNY's Investments and Wealth. To wrap up, halfway through the year, we're pleased with the progress that we have made and how it has reflected in both improved financial performance to date, as well as our building momentum. One of my favorite quotes, from Alexander Hamilton, our founder, famously said that he attributed his success not to genius, but to hard work.

Robin Antony Vince: To wrap up, halfway through the year, we're pleased with the progress that we have made and how it has reflected in both improved financial performance to date as well as our building momentum.

Robin Vince: One of my favorite quotes comes from Alexander Hamilton, our founder, who famously said that he attributed his success not to genius, but to hard work. We have been hard at work, and we've laid a solid foundation. Our team is in full execution mode, and we're starting to demonstrate the power of our franchise and of operating as one BNY for our clients and our shareholders.

Robin Antony Vince: One of my favorite quotes comes from Alexander Hamilton, our founder, who famously said that he attributed his success not to genius, but to hard work.

Robin Antony Vince: We have been hard at work, and we've laid a solid foundation. Our team is in full execution mode, and we're starting to demonstrate the power of our franchise and of operating as one BNY for our clients and our shareholders. Thank you, Robin, and good morning, everyone.

Robin Antony Vince: We have been hard at work and we've laid a solid foundation. Our team is in full execution mode and we're starting to demonstrate the power of our franchise and of operating as one BNY for our clients and our shareholders.

Dermot McDonogh: With that, over to you, Donna. Thank you, Robin, and good morning, everyone.

Robin Antony Vince: With that, over to you, Dermot.

Dermot William McDonogh: Picking up on page 3 of the presentation, I'll start with our consolidated financial results for the quarter. Total revenue of $4.6 billion was up 2% year over year. Fee revenue was up 4%, which included 5% growth in investment services fees on the back of higher market values, net new business, and higher client activity. Investment management and performance fees were flat.

Dermot McDonogh: Taking up on page three of the presentation, I'll start with our consolidation financial results for the quarter. Total revenue of $4.6 billion was up 2% year over year. V Revenue was up 4%. This includes 5% growth in investment services fees on the back of higher market values, net new business, and higher client activity. Investment management and performance fees were flat. Firmwide AUCA of $49.5 trillion were up 6% year over year, and assets under management of $2 trillion were up 7% year over year, primarily reflecting higher market values. Foreign exchange revenue increased by 16% driven by higher volumes.

Dermot William McDonogh: Thank you, Robin, and good morning, everyone.

Dermot William McDonogh: Picking up on page 3 of the presentation, I'll start with our consolidated financial results for the quarter.

Dermot William McDonogh: Total revenue of $4.6 billion was up 2% year-over-year.

Dermot William McDonogh: Fee revenue is up 4%.

Dermot William McDonogh: This includes 5% growth in investment services fees on the back of higher market values, net new business and higher client activity.

Dermot William McDonogh: Firmwide AUCA of $49.5 trillion was up 6% year-over-year, and assets under management of $2 trillion were up 7% year-over-year, primarily reflecting higher market values. Foreign exchange revenue increased by 16%, driven by higher volumes. Investment and other revenue was $169 million in the quarter on the back of strong client activity in our fixed income and equity trading business. Net interest income decreased by 6% year over year, primarily reflecting changes in balance sheet mix, partially offset by higher interest rates.

Dermot William McDonogh: Investment management and performance fees were flat.

Dermot William McDonogh: Firmwide AUCA of $49.5 trillion were up 6% year-over-year, and assets under management of $2 trillion were up 7% year-over-year, primarily reflecting higher market values.

Dermot William McDonogh: Foreign exchange revenue increased by 16% driven by higher volumes.

Dermot McDonogh: Investment and other revenue was $169 million in the quarter on the back of strong client activity in our fixed income and equity trading business. And net interest income decreased by 6% year over year, primarily reflecting changes in balance sheet makes, partially offset by higher interest rates. Expenses were down 1% year over year on a reported basis and up 1% excluding notable items, primarily in the prior year. The increase from higher investments, employee marriage increases, and higher revenue relations expenses was partially offset by efficiency savings from running our company better. Notable items in the second quarter of this year primarily included an expense benefit from a reduction in the FTIC's special assessment, which is largely offset by 7th expense.

Dermot William McDonogh: Investment and other revenue was $169 million in the quarter and the back of strong client activity in our fixed income and equity trading business.

Dermot William McDonogh: A net interest income decreased by 6% year over year, primarily reflecting changes in balance sheet mix, partially offset by higher interest rates.

Dermot William McDonogh: Expenses were down 1% year over year on a reported basis and up 1% excluding notable items, primarily in the prior year. The increase from higher investments, employee merit increases, and higher revenue-related expenses was partially offset by efficiency savings from running our company better. Notable items in the second quarter of this year primarily included an expense benefit from a reduction in the FDIC's special assessment, which was largely offset by severance expenses. There was no provision for credit losses in the quarter.

Dermot William McDonogh: Expenses were down 1% year-over-year on a reported basis and up 1% excluding notable items, primarily in the prior year.

Dermot William McDonogh: The increase from higher investments, employee merit increases, and higher revenue-related expenses was partially offset by efficiency savings from running our company better.

Dermot William McDonogh: Notable items in the second quarter of this year primarily included an expense benefit from a reduction in the FDIC's special assessment.

Dermot McDonogh: There was no provision for credit losses in the quarter. As Robin highlighted earlier, we reported earnings per share of $1.52, up 16% year over year, a pre-tax margin of 33%, and a return on tangible common equity of 25%. Excluding those belisings, earnings per share were $1.51, up 9% year over year; pre-tax margin was 33%, and our return on tangible common equity was 24%.

Dermot William McDonogh: which is largely offset by severance expense.

Dermot William McDonogh: There was no provision for credit losses in the quarter.

Dermot William McDonogh: As Robin highlighted earlier, we reported earnings per share of $1.52, up 16% year-over-year, a pre-tax margin of 33%, and a return on tangible common equity of 25%. Excluding certain items, earnings per share were $1.51, up 9% year-over-year, a pre-tax margin of 33%, and our return on tangible common equity was 24%. Turning to Capsule and Liquidity on page 4, our Tier 1 leverage ratio for the quarter was 5.8%. Average assets increased by 2% sequentially on the back of deposit growth, and Tier 1 capital increased by 1% sequentially, primarily reflecting capital generated through earnings, partially offset by capital returns to common shareholders. Our CET1 ratio at the end of the quarter was 11.4%.

Dermot William McDonogh: As Robin highlighted earlier, we reported earnings per share of $1.52, up 16% year-over-year, a pre-tax margin of 33%, and a return on tangible common equity of 25%.

Dermot William McDonogh: Excluding notable items, earnings per share were $1.51 up 9% year over year, pre-tax margin was 33% and our return on tangible common equity was 24%.

Dermot McDonogh: Turning to capsule and liquidity on page four, our Tier One leverage ratio for the quarter was 5.8%. Average assets increased by 2% sequentially on the back of deposit growth, and Tier One capsules increased by 1% sequentially, primarily reflecting capsule generation through earnings, partially upset by capsule returns to common shareholders. Our Tier One ratio at the end of the quarter was 11.4%. The quarter over quarter improvement reflects lower risk rate assets coming off the temporary increase in risk rate assets at the end of the previous quarter, and Tier One capsules increased by 2% sequentially. Over the course of the second quarter, we returned over $900 million of capsules to our common shareholders, representing a total payout ratio of 81%.

Speaker Change: Turning to Capsule and Liquidity on page 4.

Speaker Change: Our Tier 1 leverage ratio for the quarter was 5.8%.

Speaker Change: Average assets increased by 2% sequentially on the back of deposit growth.

Speaker Change: and Tier 1 capital increased by 1% sequentially, primarily reflecting capital generated through earnings, partially offset by capital returns to common shareholders.

Speaker Change: Our CET1 ratio at the end of the quarter was 11.4%.

Speaker Change: The quarter-over-quarter improvement reflects lower risk-weighted assets coming off the temporary increase in risk-weighted assets at the end of the previous quarter.

Dermot William McDonogh: Quarter over quarter improvement reflects lower risk weighted assets coming off the temporary increase in risk weighted assets at the end of the previous quarter, and CET1 capsule increased by 2% sequentially. Over the course of the second quarter, we returned over $900 million of capital to our common shareholders, representing a total payout ratio of 81%. Year-to-date, we have returned 107% of earnings to our common shareholders through dividends and buybacks. Now, turning to liquidity. The Consolidated Liquidity Coverage Ratio was 115%, and our consolidated net stable funding ratio was 132%. Next, net interest income, and the underlying balance sheet trends are on page 5. Net interest income of over $1 billion was down 6% year-over-year and down 1% quarter-over-quarter.

Speaker Change: and CET1 capsule increased by 2% sequentially.

Speaker Change: Over the course of the second quarter, we returned over $900 million of capital to our common shareholders, representing a total payout ratio of 81%.

Dermot McDonogh: Year to date, we returned 107% of earnings to our common shareholders through dividends and buybacks.

Speaker Change: Year-to-date we returned a hundred and seven percent of earnings to our common shareholders through dividends and buybacks.

Dermot McDonogh: Turning to liquidity. The consolidated liquidity coverage ratio was 115%, and our consolidated net set stable funding ratio was 132%.

Speaker Change: Turning to liquidity.

Speaker Change: The Consolidated Liquidity Coverage Ratio was 115%.

Speaker Change: and our Consolidated Netsite Stable Funding Ratio was 132%.

Dermot McDonogh: Next, net interest income and the underlying balance sheet trends on page five. Net interest income of over $1 billion was down 6% year over year, and down 1% quarter over quarter. The sequential decrease was primarily driven by changes in balance sheet mix, partially upset by the benefit of reinvesting maturing fixed rate securities in higher yielding alternatives. Average deposit balances increased by 2% sequentially. Interest bearing deposits grew by 3%, and non-interest bearing deposits declined by 2% in the quarter. Average interest earning assets were up 2% quarter over quarter. Our average investment security portfolio balances increased by 3%, and our cash and reverse repo balances increased by 1%.

Speaker Change: Next, net interest income and the underlying balance sheet trends on page 5.

Speaker Change: Net interest income of over $1 billion was down 6% year-over-year and down 1% quarter-over-quarter.

Dermot William McDonogh: The sequential decrease was primarily driven by changes in balance sheet mix, partially offset by the benefit of reinvesting maturing fixed-rate securities in higher yielding alternatives. Average deposit balances increased by 2% sequentially. Interest-bearing deposits grew by 3%, and non-interest-bearing deposits declined by 2% in the quarter.

Speaker Change: The sequential decrease was primarily driven by changes in balance sheet mix, partially offset by the benefit of reinvesting maturing fixed rate securities in higher yielding alternatives.

Speaker Change: Average deposit balances increased by 2% sequentially.

Speaker Change: Interest-bearing deposits grew by 3% and non-interest-bearing deposits declined by 2% in the quarter.

Dermot William McDonogh: Average interest-earning assets were up 2% quarter over quarter. Our average investment securities portfolio balances increased by 3%, and our cash and reverse repo balances increased by 1%. Average loan balances were up 4%. Turning to our business segments, starting on page six, Security Services reported total revenue of $2.2 billion, flat year over year.

Speaker Change: Average interest earning assets were up 2% quarter over quarter.

Speaker Change: Our average investment securities portfolio balances increased by 3% and our cash and reverse repo balances increased by 1%.

Dermot McDonogh: Average loan balances were up 4%.

Dermot McDonogh: Turning to our business segments, starting on page six. Security services reported total revenue of $2.2 billion, flat year over year. Total investment services fees were up 3% year over year. In asset servicing, investment services fees grew by 4%, primarily reflecting higher market values and net new business. We continue to see strong momentum in ETF servicing with AUCA of over $2 trillion, up more than 50% year on year, and the number of funds serviced up over 20% year on year. This growth reflects both higher market values as well as client inflows, which included a large ETF mandate in Ireland from a leading global asset manager.

Speaker Change: Average loan balances were up 4%.

Speaker Change: Turning to our business segments, starting on page 6.

Speaker Change: Security Services reported total revenue of $2.2 billion flat year-over-year.

Dermot William McDonogh: Total investment services fees were up 3% year over year. In asset servicing, investment services fees grew by 4%, primarily reflecting higher market values and net new business. We continue to see strong momentum in ETF servicing, with AUCA up over $2 trillion, up more than 50% year on year, and the number of funds serviced up over 20% year on year. This growth reflects both higher market values as well as client inflows, which included a large ETF mandate in Ireland from a leading global asset manager. In alternatives, fund launches for the quarter continued the recent activity in private markets. Investment services fees for alternative investments were up mid-single digits, reflecting growth from both new and existing clients.

Speaker Change: Total investment services fees were up 3% year-over-year.

Speaker Change: In asset servicing, investment services fees grew by 4%, primarily reflecting higher market values and net new business.

Speaker Change: We continue to see strong momentum in ETF servicing with AUCA up over $2 trillion, up more than 50% year-on-year, and the number of funds serviced up over 20% year-on-year.

Speaker Change: This growth reflects both higher market values as well as client inflows, which included a large ETF mandate in Ireland from a leading global asset manager.

Dermot McDonogh: In alternatives, fund launches for the court to continue their recent activity in private markets. Investment services fees for alternatives were up mid-single digits, reflecting growth from both new and existing clients. In initial services, investment services fees were up 1%, reflecting net new business across both corporate trust and depository receipts, partially offset by the normalization of elevated fees associated with corporate actions into depository receipts in the second quarter of last year. We're particularly pleased to see the investments and new leaders in our corporate trust platform beginning to bear fruit. Against the backdrop of a significant pickup in CLO assurance in recent months, we've been moving up the ranks and improved our market share as trustee for CLOs by about 4 percentage points over the past 12 months to 20% in the second quarter.

Speaker Change: In alternatives, fund launches for the quarter continue their recent activity in private markets.

Speaker Change: Investment services fees for alternatives were up mid-single digits reflecting growth from both new and existing clients.

Dermot William McDonogh: In initial services, investment services fees were up 1%, reflecting net new business across both corporate trust and depository receipts, although partially upset by the normalisation of elevated fees associated with corporate actions in depository receipts in the second quarter of last year. We're particularly pleased to see the investments and new leaders in our corporate trust platform beginning to bear fruit, against the backdrop of a significant pickup in CLO issuance in recent months. We've been moving up the ranks and improved our market share as trustee for CLOs by about 4 percentage points over the past 12 months to 20% in the second quarter.

Speaker Change: In initial services, investment services fees were up 1%, reflecting net new business across both corporate trust and depository receipts, partially offset by the normalisation of elevated fees associated with corporate actions in depository receipts in the second quarter of last year.

Speaker Change: We're particularly pleased to see the investments and new leaders in our corporate trust platform beginning to bear fruit.

Speaker Change: Against the backdrop of a significant pick-up in CLO issuance in recent months,

Speaker Change: We've been moving up the ranks and improved our market share as trustee for CLOs by about 4 percentage points over the past 12 months to 20% in the second quarter.

Dermot McDonogh: In the segment, foreign exchange revenue was up 16% year over year, and net interest income was down 11%. Expenses of $1.6 billion were down 1% year over year, reflecting efficiency savings, partially offset by higher investments, employee marriage increases, and higher revenue relationships expenses. Pretax income was $688 million, a 7% increase year over year, and pretax margin expanded to 31%.

Dermot William McDonogh: In the segment, foreign exchange revenue was up 16% year-over-year, and Net Interest Income was down 11%. Expenses of $1.6 billion were down 1% year over year, reflecting efficiency savings partially offset by higher investments, employee merit increases, and higher revenue-related expenses.

Speaker Change: In the segment, foreign exchange revenue was up 16% year-over-year, and net interest income was down 11%.

Speaker Change: Expenses of $1.6 billion were down 1% year-over-year, reflecting efficiency savings partially offset by higher investments, employee merit increases, and higher revenue-related expenses.

Dermot William McDonogh: Pre-tax income was $688 million, a 7% increase year over year, and pre-tax margin expanded to 31%. Next, Market and Wealth Services on page 7. Marks and Wealth Services reported a total revenue of $1.5 billion, up 6% year over year. Total investment services fees were up 7% year over year. In Pershing, investment services fees were up 2%, reflecting higher market values and client activity, partially offset by the impact of business lost in the prior year. Net new assets were negative $23 billion for the quarter, reflecting the ongoing deconversion of the before-mentioned lost business.

Speaker Change: Pre-tax income of $688 million, a 7% increase year-over-year, and pre-tax margin expanded to 31%.

Dermot McDonogh: Next, market and wealth services on page 7. Market and Wealth Services reported total revenue of $1.5 billion, up 6% year over year. Total investment services fees were up 7% year over year. In purging, investment services fees were up 2%, reflecting higher market values and client activity, partially offset by the impact of business loss in the prior year. Net new assets were negative $23 billion for the quarter, reflecting the ongoing de-conversion of the before mentioned loss business. Excluding the de-conversion, we saw approximately 2% annualized net new asset growth in the second quarter, and we renewed our multi-year agreement with the Viveg, one of the nation's largest providers of wealth management solutions.

Speaker Change: Next, Market and Wealth Services on page 7.

Speaker Change: Marks & Wealth Services reports a total revenue of $1.5 billion, up 6% year-over-year.

Speaker Change: Total investment services fees were up 7% year-over-year.

Speaker Change: In Pershing, investment services fees were up 2%, reflecting higher market values and client activity, partially offset by the impact of business lost in the prior year.

Speaker Change: Net new assets were negative $23 billion for the quarter, reflecting the ongoing deconversion of the before mentioned lost business.

Dermot William McDonogh: Excluding the deconversion, we saw approximately 2% annualized net new asset growth in the second quarter. Additionally, we renewed a multi-year agreement with Ilveig, one of the nation's largest providers of wealth management solutions. Pershing has supported Osaic since its founding in 1988, and we are proud to help the company drive its growth strategy for years to come. Client demand for Wove continues to be strong. In the quarter, we signed 12 additional client agreements.

Speaker Change: Excluding the deconversion, we saw approximately 2% annualized net new asset growth in the second quarter, and we renewed our multi-year agreement with Ilveig, one of the nation's largest providers of wealth management solutions.

Dermot McDonogh: Purging has supported Josec since its founding in 1988, and we are proud to help the company drive its growth strategy for years to come. Client demand for wolf continues to be strong. In the quarter, we signed 12 additional client agreements. The pipeline continues to grow, and we are on track to meet our goal of $30 to $40 million realized revenue in 2024. In clearance and collateral management, investment services fees were up 15%, primarily reflecting higher collateral management fees and higher clearance volumes. US security clearance and settlement volumes have remained strong throughout the quarter, supported by a grown market and active trading.

Speaker Change: Pershing has supported Osaic since its founding in 1988, and we are proud to help the company drive its growth strategy for years to come.

Dermot William McDonogh: The pipeline continues to grow, and we are on track to meet our goal of $30 to $40 million in realized revenue in 2024. In clearance and collateral management, investment services fees were up 15%, primarily reflecting higher collateral management fees and higher clearance volume.

Speaker Change: Client demand for Wove continues to be strong. In the quarter we signed 12 additional client agreements. The pipeline continues to grow, and we are on track to meet our goal of $30-40 million realized revenue in 2024.

Speaker Change: In clearance and collateral management, investment services fees were up 15%, primarily reflecting higher collateral management fees and higher clearance volumes.

Dermot William McDonogh: U.S. securities clearance and settlement volumes have remained strong throughout the quarter, supported by a growing market and active trading. And we are excited about the opportunity to do even more for clients. Since we have realigned Pershing's institutional solutions business to clearance and collateral management, we can offer clients a choice across a continuum of clearance, settlement, and financing solutions for those that self-clear as well as those seeking capital and operational efficiency through outsourcing. This allows us to not only deepen our relationships with clients but also drive continued revenue growth. In treasury services, investment services fees increased by 10%, primarily reflecting net new business and higher client activity. Net interest income for the segment overall was down 1% year-over-year.

Speaker Change: U.S. security clearance and settlement volumes have remained strong throughout the quarter, supported by a grown market and active trading.

Dermot McDonogh: And we are excited about the opportunity to do even more for clients. Vince, having realigned Pershing's institutional solutions business to clearance and collateral management, we can offer clients a choice across a continuum of clearance, settlement, and financing solutions for those that self-clear, as well as those seeking capital and operational efficiency throughout sourcing. This allows us to not only deepen our relationships with clients, but also drive continued revenue growth. And in Treasury services, investments services fees increased by 10%, primarily reflecting net new business and higher client activity. Net interest income for the segment overall was down 1% year-over-year.

Speaker Change: And we are excited about the opportunity to do even more for clients.

Speaker Change: Having realigned Pershing's institutional solutions business to clearance and collateral management.

Speaker Change: We can offer clients a choice across a continuum of clearance, settlement and financing solutions for those that self-clear as well as those seeking capital and operational efficiency through outsourcing.

Speaker Change: This allows us to not only deepen our relationships with clients, but also drive continued revenue growth.

Speaker Change: And in treasury services, investment services fees increased by 10%, primarily reflecting net new business and higher client activity.

Speaker Change: Net interest income for the segment overall was down 1% year-over-year.

Dermot McDonogh: Expenses of $833 million were up 5% year-over-year, reflecting higher investments, employee marriage increases, and higher revenue-related expenses, partially upset by efficiency savings. Free tax income was up 8% year-over-year at $704 million, representing a 46% free tax margin.

Dermot William McDonogh: Expenses of $833 million were up 5% year over year, reflecting higher investments, employee merit increases, and higher revenue-related expenses. Partially offset by efficiency savings. Pre-tax income was up 8% year-over-year at $704 million, representing a 46% pre-tax margin.

Speaker Change: Expenses of $833 million were up 5% year-over-year, reflecting higher investments, employee merit increases and higher revenue-related expenses, partially offset by efficiency savings.

Speaker Change: Pre-tax income was up 8% year-over-year at $704 million, representing a 46% pre-tax margin.

Dermot McDonogh: Moving on to investment and wealth management on page 8, investment and wealth management reported total revenue of $821 million, up 1% year-over-year. In our investment management business, revenue was down 1%, reflecting the mix of AUM flows and lower equity investment income and C capsule gains, partially upset by higher market values. And in wealth management, revenue increased by 3%, reflecting higher market values, partially upset by changes in product mix. Expenses of $668 million were down 2% year-over-year, primarily reflecting our work to drive efficiency savings and lower revenue-related expenses, partially upset by employee marriage increases and higher investments.

Dermot William McDonogh: Moving on to Investment and Wealth Management on page 8, Investment and Wealth Management reported total revenue of $821 million, up 1% year-over-year. In our investment management business, revenue was down 1%, reflecting the mix of AUM flows and lower equity investment income and C-capsule gains, partially offset by higher market values. And in wealth management, revenue increased by 3%, reflecting higher market values, partially offset by changes in product. However, expenses of $668 million were down 2% year over year, primarily reflecting our work to drive efficiency savings and lower revenue-related expenses. Although partially offset by employee merit increases and higher investment, pre-tax income was $149 million, up 15% year-over-year, representing a pre-tax margin of 18%.

Speaker Change: Moving on to Investment and Wealth Management on page 8.

Speaker Change: Investment and Wealth Management reported total revenue of $821 million, up 1% year-over-year.

Speaker Change: In our investment management business, revenue was down 1%.

Speaker Change: Reflecting the mix of AUM flows and lower equity investment income and C-capsule gains, partially offset by higher market values.

Speaker Change: and in wealth management revenue increased by 3% reflecting higher market values partially offset by changes in product mix.

Speaker Change: Expenses of $668 million were down 2% year-over-year.

Speaker Change: primarily reflecting our work to drive efficiency savings and lower revenue related expenses.

Speaker Change: Partially upset by employee merit increases and higher investments.

Dermot McDonogh: Free tax income was $149 million, up 15% year-over-year, representing a pre-tax margin of 18%. As I mentioned earlier, assets under management of $2 trillion increased by 7% year-over-year. In the quarter, while we saw 2 billion of net inflows into long-term active strategies with continued strength in fixed income and LDI, partially upset by net outflows in active equity and multi-aft strategies. We saw $4 billion of net outflows from index strategies and $7 billion of net outflows from short-term strategies. Wealth management quintessence of $308 billion increased by 8% year-over-year, reflecting higher market values and cumulative net inflows.

Speaker Change: Pre-tax income was $149 million, up 15% year-over-year, representing a pre-tax margin of 18%.

Dermot William McDonogh: As I mentioned earlier, assets under management of $2 trillion increased by 7% year over year. End of quarter. While we saw $2 billion of net inflows into long-term active strategies with continued strength in fixed income and LDI, partially offset by net outflows in active equity and multi-asset strategies, we saw $4 billion of net outflows from index strategies and $7 billion of net outflows from short-term strategies. Wealth management client assets of $308 billion increased by 8% year over year, reflecting higher market values and cumulative net inflows.

Speaker Change: As I mentioned earlier, assets under management of $2 trillion increased by 7% year over year.

Speaker Change: In the quarter, while we saw $2 billion of net inflows into long-term active strategies with continued strength in fixed income and LDI, partially offset by net outflows in active equity and multi-asset strategies.

Speaker Change: We saw $4 billion of net outflows from index strategies and $7 billion of net outflows from short-term strategies.

Speaker Change: Wealth management client assets of $308 billion increased by 8% year-over-year, reflecting higher market values and cumulative net inflows.

Dermot McDonogh: Page 9 shows the results of the other segments.

Dermot McDonogh: I'll close with a couple of comments on our outlook for the full year 2024. Starting with NII, I'm pleased to report that the first half of the year came in slightly better than we had expected, as we saw the decline in non-interest bearing deposits decelerate, and we continue to grow interest-bearing deposits. While we are cautiously optimistic, we remain humble as we head into the seasonally low summer months, and for now we will therefore keep our NII outlook for the full year 2024 unchanged, down 10% year-over-year. Regarding expenses, our goal remains to keep expenses excluding noticeable items for the full year 2024 roughly flat.

Dermot William McDonogh: Page 9 shows the results of the other segment. I'll close with a couple of comments on our outlook for the full year 2024. Starting with NII, I'm pleased to report that the first half of the year came in slightly better than we had expected as we saw the decline in non-interest-bearing deposits decelerate, and we continue to grow interest-bearing deposits. While we are cautiously optimistic, we remain humble as we head into the seasonally low summer months. And for now, we will therefore keep our NII outlook for the full year 2024 unchanged, down 10% year over year.

Speaker Change: Page 9 shows the results of the other segment.

Speaker Change: I'll close with a couple of comments on our outlook for the full year 2024.

Speaker Change: Starting with NII, I'm pleased to report that the first half of the year came in slightly better than we had expected.

Speaker Change: As we saw the decline in non-interest bearing deposits decelerate and we continue to grow interest bearing deposits.

Speaker Change: While we are cautiously optimistic, we remain humble as we head into the seasonally low summer months, and for now we will therefore keep our NII outlook for the full year 2024 unchanged, down 10% year over year.

Dermot William McDonogh: Regarding expenses, our goal remains to keep expenses excluding notable items for the full year 2024 roughly flat. As Robin put it earlier, BNY is in execution mode, and we're embracing the hard work ahead of us. We continue to expect our effective tax rate for the full year 2024 to be between 23 and 24%.

Speaker Change: Regarding expenses, our goal remains to keep expenses excluding notable items for the full year 2024 roughly flat.

Dermot McDonogh: As Robin put it earlier, BNY is in execution mode, and we're embracing the hard work ahead of us. We continue to expect our effective tax rate for the full year 2024 to be between 23 and 24%. And lastly, we continue to expect to return 100% or more of 2024 earnings to our shareholders in dividends and buybacks. Our board of directors declared our 12% increased common dividends for the third quarter, and we plan to continue repurchasing common shares under our existing share repurchase program. As always, we are calibrating the pace of our buybacks considering various factors such as our capital management targets, the macroeconomic and interest rate environment, as well as the size of our balance sheets.

Speaker Change: As Robin put it earlier, BNY is in execution mode and we're embracing the hard work ahead of us.

Speaker Change: We continue to expect our effective tax rate for the full year 2024 to be between 23 and 24 percent.

Dermot William McDonogh: And lastly, we continue to expect to return 100% or more of 2024 earnings to our shareholders through dividends and buyback. Our Board of Directors declared a 12% increased common dividend for the third quarter, and we plan to continue repurchasing common shares under our existing share repurchase program. As always, we are calibrating the pace of our buybacks, considering various factors such as our capital management targets, the macroeconomic and interest rate environment, as well as the size of our balance sheet.

Speaker Change: And lastly, we continue to expect to return 100% or more of 2024 earnings to our shareholders through dividends and buybacks.

Speaker Change: Our Board of Directors declared our 12% increased common dividend for the third quarter and we plan to continue repurchasing common shares under our existing share repurchase program.

Speaker Change: As always, we are calibrating the pace of our buybacks, considering various factors such as our capital management targets, the macroeconomic and interest rate environment, as well as the size of our balance sheet.

Dermot McDonogh: To wrap up, we enter the second half of the year on the back of solid fee growth, a better than expected NII performance today and continued expense discipline, which gives us incremental confidence in our ability to drive positive operating leverage in 2024.

Operator: We enter the second half of the year on the back of solid fee growth, a better than expected NII performance to date, and continued expense discipline, which gives us incremental confidence in our ability to drive positive operating leverage in 2024. With that, Operator, can you please open the line for Q&A? And if you would like to ask a question, please press star 1 on your telephone keypad. Our first question is from Ken Ustin with Jeff. Please go ahead.

Speaker Change: To wrap up...

Speaker Change: We enter the second half of the year on the back of solid fee growth, a better than expected NII performance to date, and continued expense discipline.

Speaker Change: which gives us incremental confidence in our ability to drive positive operating leverage in 2024.

Operator: With that operator, can you please open the line for Q&A? Thank you.

Speaker Change: With that, operator, can you please open the line for Q&A?

Operator: And if you would like to ask a question, please press star one on your telephone keypad.

Speaker Change: Thank you. And if you would like to ask a question, please press star 1 on your telephone keypad.

Ken Euston: Our first question is coming from Ken Euston with Jeffries.

Speaker Change: Our first question is coming from Ken Ustin with Jeffries. Please go ahead.

Ken Euston: Please go ahead.

Ken Euston: Thank you. Good morning.

Kenneth Michael Usdin: Thank you. Good morning. Morning, Ken.

Ken Euston: Good morning, Ken. Good morning.

Kenneth Michael Usdin: Good morning. I'd just like to go just ask Dermot about that NII humbleness during the second half. Can you just walk us through what the moving pieces would be, including the seasonality that you mentioned and any other things that might have been over-earning in the NII in the first quarter, so that you would seemingly, in your maintained guide still expect a meaningful ramp down in NII, which I don't think is what seems to be the base case, given how well the balance sheet has held up so far, as you pointed out relative to your expectations

Kenneth Michael Usdin: Thank you. Good morning.

Dermot McDonogh: Just like to go just ask German about that NII humbleness for the second half. Can you just walk us through what the moving pieces would be, including the seasonality that you mentioned and any other things that might have been over earning in the NII in the first quarter so that you would seemingly in your maintained guide still expect a meaningful ramp down in NII, which I don't think is what seems to be the base case given how well the balance sheet has held up so far as you pointed out relative to your expectations. Thanks.

Kenneth Michael Usdin: Morning Ken

Kenneth Michael Usdin: Good morning. I'd just like to go just ask Dermot about that NII humbleness for the second half.

Speaker Change: Can you just walk us through...

Speaker Change: What the moving pieces would be, including the seasonality that you mentioned.

Speaker Change: And any other things that might have been over-earning in the NII in the first quarter so that you would seemingly in your maintained guide still expect a meaningful ramp down in NII, which I don't think is what seems to be the base case given how well the balance sheet has fallen.

Speaker Change: held up so far as you pointed out relative to your expectations. Thanks.

Dermot McDonogh: Thanks for the question, Ken. I guess the best way to answer the question is a little bit to, in some ways, look back at last year, where Q1, Q2 typically strong quarters for us, Q3, typically a seasonally lower quarter, summer months, clients taking their foot off the gas in terms of activity, and then we pick back up again in Q4. Now, as you've seen from this quarter's numbers and the first half overall, we're very pleased with the performance. I guess we've outperformed our expectations for the first half, and that's in large part due to underlying activity within our core businesses. In my remarks, I particularly called out corporate trust, where we saw like elevators activity in the CLO space, which in turn drives deposits.

Kenneth Michael Usdin: Thanks. Thanks for the question, Ken. I guess the best way to answer the question is a little bit like... In some ways, look back at last year, where Q1, Q2, typically strong quarters for us, Q3, typically a seasonally lower quarter, summer months, clients, you know, taking their foot off the gas in terms of activity, and then we pick back up again in Q4.

Speaker Change: Thanks for the question, Ken. I guess the best way to answer the question is a little bit to...

Dermot William McDonogh: Now, as you've seen from this quarter's numbers and the first half overall, we're very pleased with the performance. We've, I think, I guess we've outperformed our expectations for the first half. And that's in large part due to underlying activity within our core businesses. And in my remarks, I particularly called out corporate trust, where we saw elevated activity in the CLO space, which in turn drives deposits. Let's see how Jay speaks on Monday and how he guides us out of Jackson Hole and into a September potential rate cut.

Speaker Change: In some ways, look back at last year, where, you know, Q1, Q2, typically, strong quarters for us. Q3...

Speaker Change: [inaudible]

Speaker Change: Typically a seasonally lower quarter.

Speaker Change: Summer months clients, you know taking their foot off the gas in terms of activity and then we pick back up again

Speaker Change: Q4. Now, as you've seen from this quarter's numbers and the first half overall, we're very pleased with the performance.

Speaker Change: We've, I think, I guess we've outperformed our expectations for the first half.

Speaker Change: And that's in large part due to underlying activity within our core businesses. And in my remarks, I particularly called out corporate trust.

Speaker Change: Where we saw like elevated activity in the CLO space which in turn drives deposits

Dermot McDonogh: So when our core businesses are doing well, which they've all performed well, that has a knock-on impact in the number of deposits that we have, and so we outperformed our expectations in the first half. Notwithstanding that when I look out at the rest of the year and when we gave the guidance of down 10% in January, the market at that time was roughly calling for six rate cuts. Now we're in the middle of the summer. We had a slowdown in inflation print yesterday.

Speaker Change: So when our core businesses are doing well, which they've all performed well, that has a knock-on impact in the number of deposits that we have. And so we outperformed our expectations in the first half.

Speaker Change: Notwithstanding that, when I look out at the rest of the year, and when we gave the guidance of down 10% in January , the market at that time was roughly calling for six rate cuts.

Speaker Change: Now we're in the middle of the summer. We had a slowdown in inflation print yesterday. Let's see how Jay speaks on Monday and how he guides out of Jackson Hole and into a September potential rate cut.

Dermot McDonogh: Let's see how Jay speaks on Monday and how he guides out of Jackson Hole and into a September potential rate cut. But we kind of take all of those levers, and we just kind of say for now, there's no point in me changing guidance to change guidance again in September, at our October, at the next call. So we're cautiously optimistic. I think I used the word last year in March as Q.

Dermot William McDonogh: But we kind of take all of those levers and we just kind of say, for now, there's no point in me changing guidance to change guidance again in September or October at the next call. So we're cautiously optimistic. I think I used the word optimistic last year in March, askew.

Speaker Change: But we kind of take all of those levers and we just kind of say, for now...

Speaker Change: There's no point in me changing guidance to change guidance again in September or October at the next call. So we're cautiously optimistic. I think I used the word last year in March, askew.

Dermot McDonogh: So we're playing for the best outcome, but we do expect Q3 to be somewhat seasonally, and that's why we didn't change our guidance.

Speaker Change: So, we're playing for the best outcome, but we do expect Q3 to be somewhat seasonally quieter and that's why we didn't change our guidance.

Dermot McDonogh: Okay, and then just can you follow up just on the size of the deposit. So just you're just expecting the size of the deposit based to decline or is it the mix or just trying to understand like what pieces of it do, you know, would revert given that seasonality. So when I think about deposits, I kind of think there are three components to us. One is interest bearing deposits where we outperformed plan, NIBs where we outperformed plan. And so, please, with that, but that really reflects clients showing up in a different way with us and we showing up in a different way with clients.

Kenneth Michael Usdin: Okay, and then just can you follow up on the size of the deposit. So are you just expecting the size of the deposit base to decline? Or is it the mix, or just trying to understand like what pieces of it do you know would revert given that seasonality?

Speaker Change: Okay and then just can you that's that follow-up just on the size of the deposit so just you're just expecting the size of the deposit base to decline or is it the mix or just trying to understand like what pieces of it do you know would revert given that seasonality?

Dermot William McDonogh: So when I think about deposits, I kind of, I think there are three components to it. One is interest-bearing deposits where we outperformed plan; NIBs where we outperformed plan. I'm so pleased with that.

Speaker Change: So when I think about deposits, I think there are three components to it. One is interest bearing deposits where we outperformed plan, NIBs where we outperformed plan, and

Dermot William McDonogh: But that really reflects clients showing up in a different way with us, and we showing up in a different way with them. Good And then the third thing, and I've talked about this a number of times on previous calls, really the strength of the collaboration and teamwork between our treasurer, our CIO, and our global liquidity solutions platform, where we think about liquidity as a $1.4 trillion ecosystem. And we've been very much in offense mode this quarter.

Speaker Change: So, pleased with that, but that really reflects clients showing up in a different way with us and we showing up in a different way with clients.

Dermot McDonogh: So good. And then the third thing, and I've talked about this a number of times on previous calls, really the strength of the collaboration and teamwork between our Treasurer, our CIO and our Global Liquidity Solutions platform. Where we think about liquidity as a 1.4 trillion dollar ecosystem. And we've been very much in offense mode this quarter, and our GLS team has really shown up in a positive way. And we've really managed to gather good liquidity-friendly deposits, which is kind of fueling the growth of our balance sheet. And that's allowed us to do more loans. So I think in terms of specifically to your question, it's both. I think the overall balance will come down.

Speaker Change: Good.

Speaker Change: And then the third thing, and I've talked about this a number of times on previous calls, really the strength of the collaboration and teamwork between our treasurer, our CIO, and our global liquidity solutions platform, where we think about liquidity as a $1.4 trillion ecosystem.

Dermot William McDonogh: And our GLS team has really shown up in a positive way. And we've really managed to gather good liquidity-friendly deposits, which is kind of fueling the growth of our balance sheet. And that's allowed us to do more loans. So, in terms of specifically to your question, it's both. I think the overall balance will come down, and as a consequence, I would expect NIBs from here to grind a little bit lower, which is the main driver of the NII change. Right. Okay. Thank you. Our next question is coming from Glenn Schorr with Epicor ISI. Please go ahead. Hi, hi, thanks very much.

Speaker Change: and we've been very much in offence mode.

Speaker Change: Quarter, and our GLS team has really shown up in a positive way, and we've really managed to gather good, liquidity-friendly deposits.

Speaker Change: which is kind of fueling the growth of our balance sheet and that's allowed us to do more loans. So, I think in terms of specifically to your question,

Dermot McDonogh: And as a consequence, I would expect NIBs from here to grind a little bit lower, which is the main driver of the NII change. Right.

Speaker Change: I think the overall balance will come down and as a consequence I would expect NIBs from here to grind a little bit lower which is the main driver of the NII change.

Ken Euston: Okay. Thank you.

Speaker Change: Right, okay, thank you.

Glenn Shore: Our next question is coming from Glenn Shore with Evacore ISI. Please go ahead. Hi.

Glenn Paul Schorr: Unknown Speaker, Unknown Speaker, Unknown Speaker, Unknown Speaker, Unknown Speaker, I'm just curious if you can parse out how much of that is just clients being more active during a more active second quarter versus winning new business and organic growth. It just might help for thoughts on how to go forward and how to model things. Thanks, Glenn. I think it's a combination of both.

Speaker Change: Our next question is coming from Glenn Schorr with Evercore ISI. Please go ahead.

Glenn Shore: Thanks very much.

Glenn Shore: You alluded to the, Hello. You alluded to the higher clearance and collateral management higher clearance volumes. I'm just curious if you can parse out. How much of that is just clients being more active? There are more active second quarter versus winning new business and organic growth, which just might help for the thought fund to go forward and have a mile.

Glenn Paul Schorr: Hi. Hi. Thanks very much.

Speaker Change: You will move into the... Hello. Okay. We are... We will go to record. Yes. Okay. Okay. Okay. Yes. Okay. Yes. Okay. Okay. Yes. Yes. Yes. Yes. Yes. Yes. Yes. Yes. Yes. Yes. Yes. Yes. Yes. Yes.

Speaker Change: You alluded to the higher clearance and collateral management, higher clearance volumes.

Speaker Change: I'm just curious if you can parse out how much of that is just clients being more active during a more active second quarter versus winning new business and organic growth. It just might help for the thoughts on the go forward and how to model. Thanks.

Glenn Shore: Thanks.

Dermot McDonogh: Thanks, Glenn. I think it's a combination of both. So clients are for sure doing more rate volatility. In Q2, it was there for all to see. So, as a consequence, more activity in the treasury market, more act more treasury issuance, which feeds volumes. So overall very healthy volumes and we have a high margin scaled business, which the platform was able to benefit from that increased level of activity.

Speaker Change: Thanks, Glenn. I think it's a combination of both.

Dermot William McDonogh: So clients are for sure doing more. Rate volatility in Q2 was there for all to see. So as a consequence, more activity in the Treasury market, more acts, more treasury issuance, which feeds volumes, so overall, very healthy volumes, and we have a high-margin scaled business which the platform was able to benefit from that increased level of activity. Also, I think, as we did last year, we continue to innovate for clients in the domestic market.

Speaker Change: So clients are for sure doing more. Rate volatility in Q2 was there for all to see.

Speaker Change: So as a consequence, more activity in the Treasury market.

Speaker Change: More treasury issuance.

Speaker Change: which feeds volumes to overall very healthy volumes and we have

Speaker Change: a high margin scaled business, which the platform was able to benefit from that increased level of activity. Also, I think, as we did last year, we continue to innovate for clients in the domestic market. And as we said on our January call,

Dermot William McDonogh: And as we said on our January call, the international business is also a key growth opportunity for us, and our teams are innovating and developing new products and solutions for our clients internationally. And so I think all the factors that we've talked about on previous calls kind of showed up as a nice tailwind for us this quarter. And for clearance and collateral management, I think I do expect that trend to continue in the near term. Thanks, Dermot.

Dermot McDonogh: Also, I think, as we did last year, we continue to innovate for clients in the domestic market. And as we said on our January call, the international business is also a key growth opportunity for us, and our teams are innovating and developing new products and solutions for our clients internationally. And so I think it's a combination of all the factors that we've talked about on previous calls, kind of showed up as a nice tailwind for this quarter. And for clearance and collateral management, I do expect that trend to continue in the near term.

Speaker Change: The international business is also a key growth opportunity for us and our teams are innovating and developing new products.

Speaker Change: and solutions for our clients internationally and so I think it's a combination of all the factors that we've talked about on previous calls kind of showed up as a nice tailwind for us this quarter and for clearance and collateral management I think I do expect that trend to continue in the near term.

Glenn Shore: Excellent. You picked my interest on the opening remarks. You all talked about T-plus-1 coming into the market and that helping you helping help clients.

Glenn Paul Schorr: You piqued my interest in the opening remarks; you all talked about T plus one coming in and into the market and that helping you help help clients. I'm curious, now that it's built, now that it's in the run rate, just a couple of quickies: is there a cost runoff now? Or is that not big enough?

Speaker Change: You piqued my interest in the opening remarks you all talked about T plus one coming in into the market and that helping you helping help clients.

Dermot McDonogh: I'm curious now that it's built, now that it's in the run rate, just a couple of quickies of, is there a cost run-off now, where is that not big enough? Does T-plus-1 come with lower spread for you, but does it free up capital with more frequent settlement? I'm just curious what the net impact of it all is.

Glenn Paul Schorr: Does t plus one come with a lower spread for you? But does it free up capital with more frequent settlement? I'm just curious what the net impact of it all is. Hey, Glenn, I would describe it in terms of like the raw P&L impact, which is sort of the second part of your question, is really pretty de minimis. We spent a lot of time preparing for this over the course of the past couple of years.

Speaker Change: I'm curious, now that it's built, now that it's in the run rate,

Speaker Change: Just a couple of quickies of, is there a cost runoff now, or is that not big enough? Does T plus one come with lower spread for you, but does it free up capital with more frequent settlement? I'm just curious what the net impact of it all is.

Dermot McDonogh: Hey Glenn, I would describe it in terms of like the raw P&L impact, which is sort of the second part of your question. It was really pretty diminimous. We spent a bunch of time preparing for this over the course of the past couple of years, so it wasn't like there was some big hump in the cost curve in order to really do it. We sort of worked the process over time.

Speaker Change: Hey Glenn, I would describe it in terms of the raw P&L impact, which is sort of the second part of your question, as really pretty de minimis.

Glenn Paul Schorr: So it wasn't like there was some big, you know, hump in the cost curve in order to really do it. We sort of worked the process over time. But for us, I think the biggest opportunity associated with T plus one is whenever there's a market inflection like this, and this was one of the more significant ones, but we're looking ahead to Treasury clearing as another good example of something like that. It gives us the opportunity to get closer to our clients.

Speaker Change: We spent a bunch of time preparing for this over the course of the past couple of years so it wasn't like there was some big

Speaker Change: you know, hump in the cost curve in order to really do it. We sort of worked the process over time.

Dermot McDonogh: But for us, I think the biggest opportunity associated with T-plus-1 is whenever there's a market inflection like this, and this was one of the more significant ones. But we're looking ahead to Treasury clearing as another good example of something like that; it gives us the opportunity to get closer to our clients. It creates uncertainty for our clients. How is it going to work? They need help navigating it. The combination of uncertainty and a need for assistance is really the macro opportunity for us. We've lent in to that. We'll continue leading into those types of market changes, again with Treasury clearing being another good example.

Speaker Change: For us, I think the biggest opportunity associated with T plus one is whenever there's a market inflection like this, and this was one of the more significant ones, but we're looking ahead to Treasury clearing is another good example of something like that. It gives us the opportunity to get closer to our clients, it creates uncertainty for our clients, you know, how is it going to work, and they need help navigating it. And so on the combination of uncertainty and a need for assistance is really the macro opportunity for us. And we've lent into that will continue leading into those types of market changes. Again, with Treasury clearing being another good example. And I would say overall, these types of changes, you know, create things that create more efficiency in the market, things that can reduce risk,

Glenn Paul Schorr: It creates uncertainty for our clients, you know, what it's going to work, and they need help navigating it. And so the combination of uncertainty and a need for assistance is really the macro opportunity for us. And we've lent into that, and we'll continue leading into those types of market changes. Again, with Treasury clearing being another good example.

Robin Antony Vince: And I would say overall, these types of changes create things that create more efficiency in the market, things that can reduce risk in the market, things that improve efficiency. Sure, they do sometimes call on more of our products and solutions, which is, of course, great. But it's also just a good thing for the market to improve the effectiveness and efficiency of market operations. And I think over time, we're also a beneficiary of that. Okay, great.

Dermot McDonogh: I would say overall, these types of changes create things that create more efficiency in the market, things that can reduce risk in the market, things that improve efficiency. Sure, they do sometimes call on more of our products and solutions, which of course is great, but it's also just a good thing for the market to improve the effectiveness and efficiency of market operation. I think over time, we're also a beneficiary of that.

Speaker Change: [inaudible]

Glenn Shore: Okay, great. Thank you.

Speaker Change: Okay, great. Thank you.

Abraham: Our next question is coming from Abraham, from the Walla, with Bank of America. Please go ahead. I just want to follow up a government for you on MMI.

Operator: Thank you. Our next question is coming from Ebrahim Poonawala with Bank of America. Please go ahead. Good morning, Ebrahim.

Speaker Change: Our next question is coming from Ebrahim Poonawala with Bank of America. Please go ahead.

Ebrahim Huseini Poonawala: A follow-up, Dermot, for you on NPI. I guess, in response to Ken's question, you talked about Fed policy and that having an impact. Remind us of the positioning of the balance sheet if the Fed does decide to cut rates come September and we get 100, 150 bits of cuts.

Speaker Change: Thanks for playing.

Speaker Change: I swear to you, just wait for it.

Dermot McDonogh: I guess in this talk to Ken's question, he talked about Fed policy and that having an impact. Remind us the positioning of the balance sheet if the Fed does decide to cut rates come September and we get 150 bits of cuts. Remind us how the bank will believe how we should think about NIH and that bad job. So thanks for the question. I'll give a couple of different perspectives on that. Is one in cumulative basis are roughly unchanged, quarter over quarter, which feels like I really believe our book to be fairly priced. As you will remember, our book is largely institutional.

Speaker Change: Follow-up, Dermot, for you on NPI.

Speaker Change: I guess in response to Ken's question, you talked about Fed policy and that having an impact. Remind us the positioning of the balance sheet if the Fed does decide to cut rates come September and we get 100, 150 bits of cuts.

Dermot William McDonogh: Remind us how the balance sheet will behave, and how we should think about NII in that backdrop. So to answer the question, I'll give you a couple of different perspectives on that. One, cumulative betas are roughly unchanged quarter over quarter, which feels like, I really believe our book to be fairly priced. As you know, our book is largely institutional.

Speaker Change: Remind us how the band will behave, how we should think about NII in that backdrop.

Speaker Change: So to answer the question, so I will kind of answer, I'll give a couple of different perspectives on that is

Speaker Change: One, cumulative betas are roughly unchanged quarter over quarter which feels like, I really believe our book.

Speaker Change: to be fairly priced.

Dermot William McDonogh: We pass on the rates, and so cumulative betas are in good shape. So for the dollar portfolio, a roughly low 80s to 80 range.

Dermot McDonogh: We pass on the rates, and so cumulative basis are in good shape. So for the dollar portfolio, roughly low 80s, 80s range. And then for euros and sterling, we're in the high 50s, low 60s. And so we kind of do a range of scenarios, and at the beginning of the year, we're positioned roughly, we're roughly flat. So if Chairman Powell cuts in September and then cuts again, I guess, which is the general view of the market, we're kind of basically NII, okay, it doesn't really impact the book that much. So for small moves, we're well positioned in terms of expectation.

Speaker Change: As you will remember, you know, our book is largely institutional. We pass on the rates. And so cumulative betas are in good shape. So for the dollar portfolio.

Speaker Change: [inaudible]

Speaker Change: And so, we kind of do a range of scenarios, and at the beginning of the year, we're positioned roughly, we're roughly flat, so if Chairman Powell cuts in September , and then cuts again, I guess, which is the general view of the market,

Dermot William McDonogh: And then for euros and euros and sterling, we're in the high 50s or low 60s. And so we kind of do a range of scenarios. And at the beginning of the year, we're positioned roughly, we're roughly flat. So if Chairman Powell cuts in September and then cuts again, I guess, which is the general view of the market, we're kind of basically NII OK, it doesn't really impact the book that much. So for small moves, we're well positioned in terms of expectation.

Speaker Change: We're kind of basically NII okay, it doesn't really impact the book that much. So for small moves, we're well positioned in terms of expectation.

Dermot McDonogh: Anderson. Undisturbed.

Robin Vince: And separately, I guess, maybe Robin for you just in terms of the fear of any momentum that you talked about, I'm sharing, and elsewhere, just give us a sense around what the drivers we should be thinking are, as we think about for the medium term outlook on fear of a new outside of just pure markets activity that could drive fees in a world where NII might be stable to lower everything about sort of momentum on the opposite of our lives? Sure, the revenue growth in any given year is somewhat market dependent because, of course, you know, interest rates, equity, fixed income markets, volumes, volatility, that stuff all moves around.

Dermot William McDonogh: understood. Separately, I guess, maybe, Robin, for you, just in terms of the fee revenue momentum that you talked about that you were sharing and elsewhere, just give us a sense around what the drivers we should be thinking about are, as we think about sort of the medium-term outlook on fee revenue outside of just pure market activity that could drive fees in a world where NII might be stable to lower, as we think about sort of momentum on the positive outlet. Sure.

Speaker Change: Understood.

Speaker Change: Separately, I guess, maybe, Robin, for you, just in terms of the fear of any momentum that you talked about that you were sharing, and elsewhere, just give us a sense around

Speaker Change: What the drivers we should be thinking are, as we think about sort of the medium term outlook on fee revenue, outside of just pure markets activity, that could drive fees in a world where NII might be stable to lower, as we think about sort of momentum on the positive outlet.

Robin Antony Vince: Revenue growth in any given year is somewhat market-dependent because, of course, interest rates, equity, fixed income markets, you know, volumes, volatility, that stuff all moves around. But our strategy has been, of course, to fuel the organic growth of the company but also to try to position our businesses to be able to respond as well as they can to growth tailwinds that exist just in markets. And so, you know, in answer to Ken, to the question earlier on about the treasury market.

Speaker Change: Sure. Revenue growth in any given year is somewhat market-dependent because of course, you know, interest rates, equity, fixed income markets, you know, volumes, volatility, that stuff all moves around.

Robin Vince: But our strategy has been, of course, to fuel the organic growth of the company, but also to try to position our businesses to be able to respond as well as they can to growth tailwinds that exist just in markets. And so, you know, in answer to Ken, to the question earlier on around the Treasury market. We've positioned that business to be able to benefit from what we think is a secular growth in activity in the U.S. Treasury market. So, that's a place where we're benefiting, yes, from the market; we're also benefiting from the investments that dermate detailed.

Speaker Change: But our strategy has been, of course, to fuel the organic growth of the company, but also to try to position our businesses to be able to respond as well as they can to growth tailwinds that exist just in markets. And so, you know, in answer to Ken, to the question earlier on around the Treasury market.

Robin Antony Vince: We've positioned that business to be able to benefit from what we think is a secular growth in activity in the U.S. Treasury market. So that's a place where we're benefiting, yes, from the market. We're also benefiting from the investments that Dermot detailed. And as we go through what's next for our fee growth, we talked a lot about our 1BNY campaign four quarters ago. And we talked last quarter and in January about the fact that we're sort of operationalizing more and more what started off as a movement of 1BNY into referrals, into new targets, into our commercial model, and with our chief commercial officer joining.

Speaker Change: We've positioned that business to be able to benefit from what we think is a secular growth in activity in the U.S. Treasury market. So that's a place where we're benefiting, yes, from the market. We're also benefiting from the investments that Dermot detailed.

Robin Vince: And as we go through what's next for our fee growth, we talked a lot about our One BNY campaign quarters ago. And we talked last quarter and in January about the fact that we're sort of operationalizing more and more what started off as a movement of one BNY into referrals, into new targets, into our commercial model and our chief commercial officer joining, and really then getting into the client coverage, the practices, the integrated solutions, which we talked about in our prepared remarks, the fact that we can now bundle individual products into true solutions for clients.

Speaker Change: And as we go through what's next for our fee growth, we talked a lot about our One BNY campaign.

Speaker Change: Quarters ago, and we talked last quarter and in in January about the fact that we're sort of operationalizing more and more what started off as a movement of 1BNY into referrals into new targets

Robin Antony Vince: And really getting into client coverage, practices, and integrated solutions, which we talked about in our prepared remarks. The fact that we can now bundle individual products into true solutions for clients. So there are a lot of levers for fee growth, and we've been working very methodically through our plan to build momentum in that space but also to position the business to be able to take advantage of macro things going on in the market. Thank you. Our next question is coming. Chubak with Wolf Research. Good morning Robin, good morning Dermot.

Speaker Change: into our commercial model and our chief commercial officer joining, and really then getting into the client coverage, the practices, the integrated solutions, which we talked about in our prepared remarks, the fact that we can now bundle individual products into true solutions for clients. So there are a lot of levers on the fee growth, and we've been working very methodically through our...

Robin Vince: So, there are a lot of levers on the fee growth, and we've been working very methodically through our plan to build momentum in that space, but also to position the business to be able to take advantage of macro things going on in the market.

Speaker Change: plan to build momentum in that space, but also to position the business to be able to take advantage of macro things going on in the market.

Speaker Change: Thank you.

Steven Chubak: Our next question is coming from Steven Chulok with Wolf Research.

Speaker Change: Thank you.

Steven Chubak: Please go ahead. Good morning, Robin. Good morning, Dermott.

Speaker Change: Our next question is coming from Steven Chubak with Wolf Research. Please go ahead.

Steven Chubak: Good morning, Steven. So, I guess I wanted to build on that earlier line of questioning, but really focusing more on repo activity. It's been a big area of investor focus. You've certainly benefited from recent strengths on the repo side, and I was hoping you could potentially quantify the benefit year on year from elevated repo activity, and just a longer term, like how are you thinking about the durability of the recent repo strength, and what are some of the factors supporting that view? Thanks for the question, Steven. So, I would say in terms of year-on-year activity, Lee, it's not a kind of a clear dream, but it's not a game changer for us in terms of the overall year-on-year NII story.

Steven Joseph Chubak: So I just wanted to build on that earlier line of questioning, but really focus more on repo activity. It's been a big area of investor focus. You've certainly benefited from recent strength on the repo side, and I was hoping you could potentially quantify the benefit year on year from elevated repo activity. And just on a longer term, like how you're thinking about the durability of the recent repo strength, and what are some of the factors supporting that? Thanks for the question, Steven.

Steven Joseph Chubak: Good morning Robin, good morning Dermot.

Speaker Change: Morning, Stephen.

Speaker Change: So,

Steven Joseph Chubak: I just wanted to build on that earlier line of questioning, but really focusing more on repo activity. It's been a big area of investor focus.

Steven Joseph Chubak: You've certainly benefited from recent strength on the repo side and I was hoping you could potentially quantify the benefit.

Steven Joseph Chubak: Year on year from elevated repo activity and Just a longer term like how you're thinking about the durability of the recent repo strength And what are some of the factors supporting that view?

Dermot William McDonogh: So I would say, in terms of year-on-year activity, It's not a kind of cleared repo is not a game changer for us in terms of the overall year-on-year NII story. It's about, in its totality, it makes up about 5% of our NII today. I think I would just echo our follow-on from Robin's, you know, answer to the last question in terms of, It's a product. Clients want it. We are meeting them where they want to be. We're innovating. This comes under the $1.4 trillion liquidity ecosystem. LIDA runs that business and does a terrific job for us.

Steven Joseph Chubak: Thanks for the question, Steven. So, I would say in terms of year-on-year activity,

Steven Joseph Chubak: It's not a kind of a cleared repo is not a game-changer for us in terms of the overall year-on-year NII story.

Dermot McDonogh: It's about overall, in its totality, it makes up about 5% of our NII today. I think I would just echo our follow on from Robin's answer to the last question in terms of, it's a product clients wanted; we are meeting them where they want to be, we're innovating. This comes under the $1.4 trillion liquidity ecosystem. LIDA runs that business, does a terrific job for us. In the clear repo business specifically, we're a top three provider and so we have a large installed client base who are looking for products and we can meet them with our clear repo product. And so it's just another tool in our toolbox and I would say again, we're positioned, we're investing, we're a scale player and we can provide automated solutions for our clients.

Speaker Change: It's about, overall in its totality, it makes up about 5% of our NII today. I think I would just echo or follow on from Robin's answer to the last question in terms of

Speaker Change: It's a product.

Speaker Change: Clients want it.

Speaker Change: We are meeting them where they want to be. We're innovating. This comes under the $1.4 trillion liquidity ecosystem. LIDAE runs that business, does a terrific job for us.

Dermot William McDonogh: In the cleared repo business specifically, we're a top three provider. And so, you know, we have a large installed client base who are looking for products, and we can meet them with our cleared repo product. And so it's just another tool in our toolbox.

Speaker Change: In the Cleared repo business specifically, we're a top three provider, and so, you know, we have a large installed client base.

Speaker Change: who are looking for products and we can meet them with our Cleared Repo product. And so it's just another tool in our toolbox. And I would say again,

Speaker Change: We're positioned, we're investing, we're a scale player and we can we can provide automated solutions for our clients.

Dermot McDonogh: So I do expect that business to continue to grow, but in terms of the year-over-year, to your specific question, it's not a material driver of the year-over-year change. Stephen, I would add one thing to it, which is just remember that in the context of our business, we're really the only global solution provider in the space because we're scaled in Asia, we're scaled in Europe, we're scaled in the United States, and in a world where folks are looking at repo as a collateral tool and an investment tool. The opportunity to be able to help clients navigate the whole world in this product, provide the seamless connectivity between repo and margin and collateral management, the connectivity to other things that we do, there's a real appeal to use Dermott's phrase again about meeting clients where they are.

Dermot William McDonogh: And I would say again, we're positioned, we're investing, we're a scale player, and we can provide automated solutions for our clients. So I do expect that business to continue to grow. But in terms of the year over year, to your specific question, it's not a material driver of the year over year change.

Speaker Change: I do expect that business to continue to grow, but in terms of the year-over-year, to your specific question, it's not a material driver of the year-over-year change. Steven, I would add one thing to it, which is just remember that in the context of our business...

Speaker Change: We're really the only global solution provider in the space because we're scaled in Asia, we're scaled in Europe , we're scaled in the United States.

Speaker Change: and in a world where folks are looking at repo as a collateral tool.

Speaker Change: and an investment tool. The opportunity to be able to help clients navigate the whole world in this product, provide the seamless connectivity between repo and margin and collateral management, the connectivity to other things that we do, there's a real appeal.

Robin Antony Vince: connectivity between repo and margin and collateral management, the connectivity to other things that we do, there's a real appeal, to use Dermot's phrase again about meeting clients where they are. There's a real appeal here for clients in terms of the breadth of what we can offer, but also the innovation that he referred to earlier in the call, where we're creating these new solutions. And so this is another example, along with the US Treasury market, but there are so many others in our. Thanks for all that color. And just for my follow up on the Persian business.

Robin Vince: There's a real appeal here for clients in terms of the breadth of what we can offer, but also the innovation that he referred to earlier on in the call, where we're creating these new solutions. And so this is another example, along with the US Treasury market, but there are so many others in our business of saying there's a macro evolution going on, and we have the opportunity to participate in that as long as we're front-footed with clients and as long as we're innovating.

Speaker Change: to use Dermot's phrase again about meeting clients where they are. There's a real appeal here for clients in terms of the breadth of what we can offer, but also the innovation that he referred to earlier on in the call where we're creating these new solutions. And so this is another example along with the U.S. Treasury market, but there are so many others in our business of saying there's a macroevolution going on, and we have the opportunity to participate in that as long as we're front-footed with clients and as long as we're innovating.

Steven Chubak: Thanks for all that color, and just for my follow-up on the Pershing business, I know that the core underlying strength has been obscured to some degree by some large client departures. I hope you can give some perspective on what some of the core organic growth trends look like in that business, what the pipeline looks like in that business given some of the recent excitement around the Wolf platform and the offering, and have we allowed those headwinds at this point, or is there still some remaining pressure on the common? Okay, so I would say nobody is happier to see the ongoing deconversion of the clients to come to an end.

Steven Joseph Chubak: I know that the core underlying strength has been. Unknown Attendee, Unknown Shareholder, Alexander Blostein, Manan Gosalia, Gene Wang, BNY, Recent excitement around the Wove platform and the offering, and have we locked those headwinds at this point, or is there still some remaining pressure on the Okay, so I would say nobody is happier to see the ongoing deconversion of the client, you know, to come to an end. So we expect that to be fully out of the portfolio by Q3.

Speaker Change: And just for my follow-up on the Pershing business, I know that the core underlying strength

Speaker Change: Obscure to some degree by some large client departures. I was hoping you could give some perspective on what some of the core organic growth trends look like in that business. What the pipeline looks like in that business given some of the

Speaker Change: Recent excitement around the WoVE platform and the offering, and have we locked those headwinds at this point or is there still some remaining pressure on the come?

Speaker Change: Okay, so I would say nobody is happier to see the ongoing deconversion of the client, you know, to come to an end. So we expect that to be fully out of the portfolio by Q3.

Dermot McDonogh: So we expect that to be fully out of the portfolio by Q3. As I've said, I'm pleased just cause we believe in our ability to earn our way through that deconversion. It happens in life, and so I think the team has been very resilient in terms of earning their way through us and growing. In my prepared remarks, I talked about the resign of Ozec on a several year contract, so we're very pleased about that. You take a step back and you look at where we were 12 months ago. We just came out of the Inside Conference in Florida where we announced Ozec. 12 months later, we've announced a new suite of products to support the Ozec.

Steven Joseph Chubak: As I've said on previous calls, we believe in our ability to earn our way through that deconversion. It happens in life, and so I think the team has been very resilient in terms of earning their way through it and growing.

Speaker Change: As I've said on previous calls, we believe in our ability.

Speaker Change: to earn our way through that deconversion. It happens in life and so...

Speaker Change: I think the team has been very resilient in terms of earning their way through it and growing. In my prepared remarks, I talked about the re-sign of Osaic on a several-year contract, so we're very pleased about that.

Dermot William McDonogh: In my prepared remarks, I talked about the resigning of Osaic on a several-year contract, so we're very pleased about that. But you take a step back, and you look at where we were 12 months ago. We just came off the Insight Conference in Florida where we announced Wolve. Twelve months later, we've announced a new suite of products to support Wolve. And we have signed 21 clients so far this year for Woave.

Speaker Change: You take a step back and you look at where we were 12 months ago. We just came off the Insight Conference in Florida where we announced Wolve. Twelve months later, we've announced a new suite of products to support the Wolve.

Dermot William McDonogh: The momentum is building, and the clients like us. We I kind of reiterated my guidance in prepared remarks about the 30 to $40 million of revenue for this year. And then just I'll remind you that we're a $3 trillion player in the wealth tech space, number one with broker dealers, top three with RIAs. And, you know, in previous quarters, I've kind of guided, you know, mid single digits of underlying core growth

Dermot McDonogh: We have signed 21 clients so far this year for Ozec. The momentum is building; the clients like us. I reiterated my guidance on prepared remarks about the 30 to 40 million dollars of revenue for this year. And then just I remind you that we're a three trillion dollar player in the wealth tech space at number one with broker dealers top three with OIAs. And you know, in previous quarters, I've kind of guided, you know, mid single digits of underlying core growth through the cycle. We continue to believe that, notwithstanding on any given quarter, it may be slower or better, but we believe we were in good shape.

Speaker Change: We have signed 21 clients so far this year for Wolves, the momentum is building, the clients like it.

Speaker Change: I kind of reiterated my guidance and prepared remarks about the 30 to 40 million dollars of revenue for this year.

Speaker Change: And then just I'll remind you that we're a three trillion dollar player in the wealth tech space.

Brennan Hawken: Through the cycle, we continue to believe that, notwithstanding any given quarter, it may be slower or better, but we believe we're in good shape. And there's good momentum in what is a very, very large market, and in which we're a very big player. Very helpful caller. Thanks so much for taking my questions. Our next question is coming from Brennan Hawken with UBS. Your line is open.

Speaker Change: at number one with broker-dealers, top three with RIAs.

Speaker Change: And, you know, in previous quarters, I've kind of guided.

Speaker Change: know, mid single digits of underlying core growth. Through the cycle we continue to believe that notwithstanding on any given quarter it may be slower or better, but we believe we are in good shape and that there is good momentum in what is a very, very large market and in which we're a very big player.

Dermot McDonogh: And that there's good momentum in what is a very, very large market and in which we're a very big player.

Steven Chubak: Very helpful color. Thanks so much for taking my questions.

Steven Chubak: Thanks.

Speaker Change: Very helpful caller. Thanks so much for taking my questions.

Brennan Hawken: Our next question is coming from Brennan. How can with UBS, your line is open. Please go ahead.

Jim: Thanks, Jim.

Speaker Change: Our next question is coming from Brennan Hawken with UBS. Your line is open. Please go ahead.

Brennan Hawken: Good morning, Robin and Dermott. Thanks for taking my questions. So we saw the ECB cut rates this quarter. And while I know Euro isn't a huge exposure for you in terms of your deposit base, I'm curious about what impact you saw that on your deposit costs in that currency. And maybe how does that experience in the market reaction inform your expectations for beta and customer behavior around rate cuts in other currencies. Thanks.

Brennan Hawken: Please go ahead. Good morning, Robin and Dermot. Thanks for taking my questions. So we saw the ECB cut rates this quarter, and while I know the Euro is a huge exposure for you in terms of your deposit base, I'm curious about what impact you saw on your deposit costs in that currency, and maybe how that experience and the market reaction inform your expectations for beta and customer behavior around rate cuts in other currencies.

Speaker Change: Good morning Robin and Dermot. Thanks for taking my questions.

Brennan Hawken: So, we saw the ECB cut rates this quarter, and while I know euro is in a huge exposure for you in terms of your deposit base, curious about what impact you saw that on your deposit costs in that currency, and maybe how does that experience?

Brennan Hawken: and the market reaction inform your expectations for beta and customer behavior around rate cuts in other currencies. Thanks.

Dermot McDonogh: So I would say overall Euros is roughly 10% of the total portfolio. To answer to the earlier question, I think we feel very well positioned for, you know, the range of outcomes that the forward curve is implying in euros, sterling, and dollars. We prepare for it. We talk about it a lot. And so I kind of feel like the way the CIO book is currently set up, where we still have a reasonable amount of securities rolling off into higher yielding assets. So I just feel like the combination of where our deposit book is in terms of our beta to reiterate again for dollars, low 80s; sterling in euros, high 60s.

Dermot William McDonogh: So I would say overall that euros are roughly 10% of the total portfolio. In answer to the earlier question, I think we feel very well positioned for the range of outcomes that the forward curve is implying in euros, sterling, and dollars. We prepare for it. We talk about it a lot.

Speaker Change: So I would say overall, Euros is roughly 10% of the total portfolio. In answer to the earlier question, I think we feel very well positioned.

Speaker Change: for, you know, the range of outcomes that the forward curve is implying in euros, sterling and dollars.

Dermot William McDonogh: And so I kind of feel like the way the CIO book is currently set up, where we still have a reasonable amount of securities rolling off into higher yielding assets. So I just feel like the combination of where our deposit book is in terms of our betas, to reiterate again for dollars, low 80s, sterling, and euros, high 60s, and the CIO book has kind of room to grow. And so on rate cuts in terms of how we kind of, the position in the book was broadly symmetric in terms of on the rate cut side.

Speaker Change: We prepare for us

Speaker Change: We talk about a loss.

Speaker Change: and so I kind of feel like the way the CIO book is currently set up where

Speaker Change: We still have a reasonable amount of securities rolling off into higher-yielding assets, so I just feel like the combination of where our deposit book is in terms of our betas, to reiterate again, for dollars, low 80s, sterling and euros, high 60s,

Dermot McDonogh: And the CIO book kind of still room to grow. And so on, rate cuts in terms of how we kind of positioned the book were broadly symmetric in terms of on the rate cut side. So I think you know Chairman Powell has done a good job of telegraphing to the market how he wants to do it. So I don't think it's going to be a volatile move in rates when it happens. So he's allowed us time to position and manage and get into the right place. So I think overall I feel very good about where we're at.

Speaker Change: and the CIO book kind of still room to grow and so on rate cuts in terms of how we kind of

Dermot William McDonogh: So I think Chairman Powell has done a good job of telegraphing to the market how he wants to do it. So I don't think it's going to be a volatile move in rates when it happens.

Speaker Change: positioned the book were broadly symmetric in terms of on the way cut side, so

Speaker Change: I think, you know, Chairman Powell has done a good job of telegraphing to the market how he wants to do it. So I don't think it's going to be a volatile move in rates when it happens. So he's allowed us time to position and manage and get into the right place. So I think overall, I feel very good about where we're at.

Brennan Hawken: So he's allowed us time to position and manage and get into the right place. So I think overall, I feel very good about where we are. Yeah, but what I was asking, I appreciate that. But what I was trying to understand was the actual experience in the actual marketplace, beyond like the expectation, you know. Did the 50 to 60% beta, I think you said in euros, hold when the cut went through? And did you actually experience that?

Dermot McDonogh: Yeah, but what I was asking, I appreciate that, but what I was trying to understand was the actual experience in the actual marketplace beyond the expectation. Did the 50 to 60% beta, I think you said, in euros, did that hold when the cut went through, and did you actually experience that? So specifically, yes, we did experience that, and it held up. It behaves as a corrective.

Speaker Change: Yeah, but what I was asking, I appreciate that, but what I was trying to understand was the actual experience within the actual marketplace beyond like the expectation.

Speaker Change: Did the 50-60% beta, I think you said, in euros, did that hold when the cut went through and did you actually experience that?

Dermot William McDonogh: So specifically, yes, we did experience that, and it held up, and it behaved as expected. Excellent. Thank you. Thank you for that, Dermot. I appreciate that. Issuer services are very solid. You flagged, you know, some CLO trustee gains on the back of a market that's seen solid volume. Could you help us understand maybe how much of the strength and the growth that you saw in that line was attributed to that, which I assume would be in the corporate trust business, you know, and then and then maybe how to think about the depository receipts fees, just so we're thinking about the right way to baseline and move forward with our model

Speaker Change: So, specifically, yes, we did experience that and it held up. It behaved as expected.

Dermot McDonogh: Excellent, thank you. Thank you for that, Dermot; I appreciate that.

Brennan Hawken: Echevar services very solid; you flagged some COO trustee gains on the back of a market that seemed solid volume.

Speaker Change: Excellent. Thank you. Thank you for that, Dermot. I appreciate that. Issuer services, very solid. You flagged, you know, some CLO trustee gains on the back of a market that's seen solid volume. Could you help us understand maybe how much of the strength and the growth that you saw in that line was attributed to that, which I assume would be in the

Dermot McDonogh: Could you help us understand maybe how much of the strength and the growth that you saw in that line was attributed to that, which I assume would be in the corporate trust business, you know, and then maybe how to think about the depository receipts fees. Just so we're thinking about the right way to baseline and move forward with our models.

Speaker Change: In the corporate trust business, you know, and then and then maybe how to think about the depository receipts fees, just so we're thinking about the right way to baseline and move forward with our models.

Dermot McDonogh: So sure, look, corporate trust, I think, is for us a good opportunity, a very good opportunity. I actually talked about it at some length at the RBC conference in March, when I was chatting with Jericacity. And I think over the last number of years, corporate trust for B and Y is a business that's been under-invested in in both technology and leadership. And in both Robin's and my prepared remarks, we did emphasize leadership as being a continuous change for us. And we've made it very, a couple of very important hires over the last 12 months in corporate trust, and we have new leadership overseeing the business.

Dermot William McDonogh: So sure, look, Corporate Trust is, for us, a good opportunity, a very good opportunity. I actually talked about it at some length at the RBC conference in March when I was chatting with Gerard Cassidy.

Dermot: So, sure, look, corporate trust, I think, is for us a good opportunity.

Dermot: A very good opportunity. I actually talked about it at some length at the RBC conference in March.

Brennan Hawken: And I think over the last number of years, Corporate Trust for BNY has been a business that's been under-invested in, in both technology and leadership. And in both Robin and my prepared remarks, we did emphasize leadership as being a continuous change for us. And we've made a couple of very important hires over the last 12 months in Corporate Trust, and we have new leadership overseeing the business. And it's that investment in technology, products, and leadership that is showing up. And specifically, you know, we've doubled our activity in CLOs over the last 12 months.

Dermot: when I was chatting with Gerard Cassidy.

Dermot: and I think over the last number of years.

Dermot: Corporate Trust for BNY is a business that's been under-invested in, in both technology and leadership.

Speaker Change: And in both Robin and I's prepared remarks, we did emphasise leadership as being a continuous change for us. And we've made a couple of very important hires over the last 12 months in corporate trusts, and we have new leadership overseeing the business.

Dermot McDonogh: And it's that investment in technology, products, leadership that is showing up. And specifically, you know, we've doubled our activity in CLOs over the last 12 months. We've improved our market share. And as Robin said, a couple in an answer to another question, we really want to position corporate trust as a business that really can take the advantage of scale. A lot of manual processes, a lot of room for AI, a lot of room for digitization, and we can improve the operating leverage of that business. We can improve how we show up for clients, client service.

Speaker Change: and it's that investment and in technology products.

Robin Antony Vince: We have doubled our activity in CLOs over the last 12 months. We have improved our market share. As Robin said, in answer to another question, we really want to position corporate trust

Dermot William McDonogh: We've improved our market share. And as Robin said, in an answer to another question, we really want to position Corporate Trust as a business that can really take advantage of scale. A lot of manual processes, a lot of room for AI, a lot of room for digitization.

Robin Antony Vince: The advantage of scale.

Robin Antony Vince: A lot of manual processes.

Dermot William McDonogh: And we can improve the operating leverage of that business. We can improve how we show up for clients, client service. So we feel like in Corporate Trust specifically, we have a lot to play for. Depository receipts, we have a good market share, we punch above our weight, and we expect that to continue. Thank you for taking my questions.

Robin Antony Vince: A lot of room for AI, a lot of room for digitization.

Robin Antony Vince: and we can improve the operating leverage of that business, we can improve how we show up for clients, client service.

Dermot McDonogh: So we feel like in corporate trust specifically, we have a lot to play for Depository Receipts. We have good market share. We punch above our waist, and we expect that to continue.

Robin Antony Vince: So, we feel like in corporate trust specifically, we have a lot to play for. Depository receipts, we have good market share, we punch above our weight, and we expect that to continue.

Betsy Graseck: Thank you for taking my questions.

Speaker Change: Thank you for taking my questions.

Betsy Graseck: Our next question is coming from Betsy Gray. With Morgan Stanley, please go ahead. Hi, good morning.

Betsy Lynn Graseck: Our next question is coming from Betsy. Morgan Stanley. Please go ahead. Hi, good morning. Morning, Betsy.

Speaker Change: Our next question is coming from Betsy Graseck with Morgan Stanley . Please go ahead.

Betsy Graseck: Morning, Betsy. Two quick questions. One, just to wrap up a little bit on the T-plus-1 discussion earlier. Could you give us a sense of how much did T-plus-1 draw? I have sequential revenue growth this quarter. And...

Betsy Lynn Graseck: Two quick questions. One, just to wrap up a little bit on the T-plus-one discussion earlier, could you give us a sense of how much did T-plus-one drive sequential revenue growth this quarter? Can you give us a sense as to... If there's enough revenue growth, you're expecting this to impact the expense ratio since you've already made the investment. And then I have a follow up on. Hi Betsy, it's Dermot.

Betsy Lynn Graseck: Hi, good morning.

Betsy Lynn Graseck: Morning, Betsy.

Betsy Lynn Graseck: Two quick questions. One, just to wrap up a little bit on the T-plus-one discussion earlier. Could you give us a sense of how much did T-plus-one drive sequential revenue growth this quarter?

Dermot McDonogh: Can you give us a sense as to if there's enough revenue growth you're expecting from this to impact the expense ratio since you've already made the investment, and then I have a follow-up on Woke, thanks.

Betsy Lynn Graseck: Can you give us a census, too?

Betsy Lynn Graseck: If there's enough revenue growth you're expecting from this to impact the expense ratio since you've already made the investment. And then I have a follow-up on Wove. Thanks.

Dermot McDonogh: Hi, Betsy, it's Dermot. So, the point I would make about T plus 1 is not so much a revenue or expense topic. It really is. It speaks to... Resilience as a commercial attribute kind of point that we make on behalf of BNY in terms of it's been a large scale infrastructure change that's been coming to the markets over the last couple of years, and as we're a key player in the financial market infrastructure, it's very important that we execute that to an A-plus standard. And what I would say is BNY has shown up for clients in delivering an A-plus execution of a very big project.

Dermot William McDonogh: So the point I would make about t plus one is not so much a revenue or expense topic. It really is. It speaks to resilience as a commercial attribute, a point that we make on behalf of BNY in terms of it's been a large-scale infrastructure change that's been coming to the market over the last couple of years. And as we are a key player in the financial market infrastructure, it's very important that we execute that to an A plus standard. And what I would say is BNY has shown up for clients in delivering an A plus execution of a very big project. It's not It's not really about revenue or expenses.

Betsy Lynn Graseck: Hi Betsy, it's Dermot. So the point I would make about t-plus-one is not so much a revenue or expense

Speaker Change: topic. It really is, it speaks to resilience as a commercial attribute kind of point that we make on behalf of BNY in terms of it's been a large-scale infrastructure change that's been coming to the market over the last couple of years.

Speaker Change: and as we are a key player in the financial market infrastructure, it's very important that we execute that to an A-plus standard.

Speaker Change: And what I would say is, BNY has shown up for clients in delivering an A-plus execution of a very big project.

Dermot McDonogh: It's not really about revenue or expenses. It's really about delivering a complicated change project for our clients and the ecosystem at large. That's really, I think, the point we're trying to make on T plus 1.

Dermot William McDonogh: It's really about delivering a complicated change project for our clients and the ecosystem at large. That's really, I think, the point we're trying to make on T plus one. Okay, yeah, I just think if you're in a better spot than others, you could pick up some incremental share on the back of that. But that's maybe a couple conference calls from here. All right, then separately on WoVE.

Speaker Change: It's not really about revenue or expenses, it's really about delivering a complicated change project for our clients and the ecosystem at large. That's really, I think, the point we're trying to make on T plus One.

Betsy Graseck: Okay, yeah, I would just think if you're in a better spot than others, you could pick up some incremental share on the back of that. That's maybe a couple of conference calls from here.

Speaker Change: Okay. Yeah, I just think if you're in a better spot than others, you could pick up some incremental share on the back of that, but that's maybe a couple conference calls from here. All right. Then separately on WOVE, I know you mentioned that you added new clients to WOVE. I just wanted to understand, is this new clients

Dermot McDonogh: All right, then separately on Woke. I know you mentioned that you added new clients to Woke. I just wanted to understand, is this new clients of the firm or this is clients who had been yours for a while and they moved to Woke? So I would say it's both. And so I guess the questions that we've had on previous calls are we cannibalizing existing clients, and the answer to that is most definitely no. And I think it speaks to the point of us innovating. You know, Woke is a very big investment for us in terms of technology over multiple years. Existing clients like the fact that we're willing to put money to work for them and give them better solutions.

Betsy Lynn Graseck: I know you mentioned that you added new clients to WOVE. I just wanted to understand, are these new clients of the firm, or are they clients who had been yours for a while, and they moved to us. So I would say it's both.

Speaker Change: of the firm, or this is clients who had been yours for a while and they moved to Wove?

Dermot William McDonogh: Unknown Speaker, And so I guess the questions that we've had on previous calls. Betsy, are we cannibalizing existing clients? And the answer to that is most definitely no.

Speaker Change: So I would say it's both.

Speaker Change: And so, I guess the questions that we've had on previous calls...

Dermot William McDonogh: And I think it speaks to the point of us innovating; you know, Wove is a very big investment for us in terms of technology over multiple years. Existing clients like the fact that we're willing to put money to work for them and give them better solutions. And as a consequence of that, you know, we had over 1,500 people show up to WOVE in Florida last year and Nashville this year.

Betsy Lynn Graseck: Betsy, are we cannibalizing existing clients? And the answer to that is most definitely no. And I think it speaks to the point of us innovating. You know, Wove is a very big investment for us in terms of technology over multiple years.

Betsy Lynn Graseck: Existing clients like the fact that we're willing to put money to work for them and give them better solutions.

Robin Vince: And as a consequence of that, you know, we had over 1,500 people show up to Woke and Florida last year in Nashville this year. And for those that are there, there's real excitement. And as Robin said in his prepared remarks, it's winning awards. So there's a flight wheel effect of, oh, wow, BNY is showing up in the wealth tech space and delivering new solutions for us. We want to see what they have to do. So the network effect of that shouldn't be underestimated.

Speaker Change: And as a consequence of that, you know, we had over 1,500 people show up to WOVE in Florida last year and Nashville this year. And for those that are there, there's real excitement. And as Robin said in his prepared remarks,

Dermot William McDonogh: And for those that are there, there's real excitement, and as Robin said in his prepared remarks, it is winning awards. So there's a flywheel effect of, oh, wow, BNY is showing up in the wealth tech space and delivering new solutions for us. We want to see what they have to do. So the network effect of that shouldn't be underestimated.

Speaker Change: It's winning awards.

Speaker Change: So, there's a flight wheel effect of...

Speaker Change: Oh wow, BNY is showing up in the wealth tech space and delivering new solutions for us. We want to see what they have to do. So the network effect of that shouldn't be underestimated. Betsy, let me double click on it for one second as well, because when we started on the Wove journey and we announced it, as Dermot said, last year.

Robin Antony Vince: Betsy, let me double click on it for one second as well, because when we started on the Wove journey and we announced it, as Dermot said, last year, it was initially really focused on that singular KPI of making advisors' lives easier. And so it was a technology front end that went from wealth planning and helped clients with wealth planning all the way through to portfolio construction and then getting into the market. Now, what's evolved since then and what we talked a lot about this year, one year later on in the Wove journey, was the fact that now we have the opportunity to link all of these other BNY capabilities to be able to deliver them to our Pershing and Wove clients. So you can be a clearing and custody client of Pershing.

Robin Vince: Betsy, let me double-click on it for one second as well, because when we started on the Wove journey and we announced it, as Dermot said last year, it was initially really focused on that singular KPI of making it happen. And so it was a technology front end that went from wealth planning and help clients with wealth planning all the way through to portfolio construction and then getting into market. Now what's evolved since then and what we talked a lot about this year, one year later in the Wove journey was the fact that now we have the opportunity to link all of these other BNY capabilities to be able to deliver to our company.

Speaker Change: It was initially really focused on that singular KPI of making advisors' lives easier.

Speaker Change: and so it was a technology front end that went from wealth planning and help clients with wealth planning all the way through to portfolio construction and then getting into market.

Speaker Change: Now, what's evolved since then, and what we talked a lot about this year, one year later in the WOVE journey, was the fact that now we have the opportunity to link all of these other BNY capabilities to be able to deliver to our Pershing and WOVE clients. So you can be a clearing and custody client of Pershing. You can be an advisor taking advantage of that initial set of tooling from WOVE. Or what you can now also do...

Robin Antony Vince: You can be an advisor taking advantage of that initial set of tooling from Wove, but what you can now also do is you can have that ability to manage and aggregate data, including across multiple custodians. We can connect you to models in the investment management space. By the way, we can fulfill those models because we've got active equity and indexing and all these capabilities that come from BNY investments. And so Wove is becoming a bit more of a delivery vehicle for the various capabilities of the firm.

Robin Vince: So you can be a clearing and custody client of Purging. You can be an advisor, taking advantage of that initial set of tooling from Wove. But what you can now also do is you can have that ability to manage and aggregate data, including across multiple custodians. We can connect you to models in the investment management space. By the way, we can fulfill those models because we've got active equity and indexing and all these capabilities that come from BNY Investments. And so Wove is becoming a bit more of a delivery vehicle for the various capabilities of the firm.

Speaker Change: is you can have that ability to manage and aggregate data including across multiple custodians. We can connect you to models.

Speaker Change: In the investment management space. By the way, we can fulfill those models because we've got active equity and indexing and all these capabilities that come from BNY investments. And so, Woave is becoming a bit more of a delivery vehicle.

Robin Antony Vince: And it's also opening up in terms of our ability to solve other problems for them. Banking is a service, which is a treasury services business, but we stimulate the conversation about that because people see us as being more than what we used to be in Pershing. We are also, to answer your question, attracting people who don't necessarily need the clearing and custody service but who want to take advantage of these other components, which is why Dermot said both, because it's both and delivering the breadth of 1BNY. Thanks, Robin. Thank you, Betsy. Our next question is coming from Mike Mayo with Wells Fargo Securities. Please go ahead.

Robin Vince: And it's also opening up the aperture of how clients of purging think about us in terms of our ability to solve other problems for them. Banking as a service, which is a Treasury services business, but we stimulate the conversation for that because people see us as being more than what we used to be in purging. We also, to your question, are attracting people who don't necessarily need the clearing and custody service, but who want to take advantage of these other components? Which is why Dermott said both, because it's both and delivering the breadth of one BNY.

Speaker Change: for the various capabilities of the firm, and it's also opening up the aperture of how clients of Pershing think about us.

Speaker Change: In terms of our ability to solve other problems for them, banking is a service, which is a treasury services business. But we stimulate the conversation for that because people see us as being more than what we used to be in Pershing. We also, to your question,

Dermot: are attracting people who don't necessarily need the clearing and custody service but who want to take advantage of these other components, which is why Dermot said both, because it's both and delivering the breadth of 1BNY.

Betsy Graseck: Thanks, Robin.

Betsy Graseck: Thank you, Betsy.

Speaker Change: Thanks, Robin.

Michael Mayo: Our next question is coming from Mike Mayo with Wells Fargo Securities.

Betsy Lynn Graseck: Thank you, Betsy.

Michael Mayo: Please go ahead. Hi, could you put a little more meat on the bones for the one BNY initiative in terms of products for customers where you're talking about more bundled solutions? I understand it, and I guess you're having higher core servicing fees, but connecting from the higher core servicing fees, from the high level, let's bundle; let's have everyone work together.

Betsy Lynn Graseck: Our next question is coming from Mike Mayo with Wells Fargo Securities. Please go ahead.

Michael Lawrence Mayo: Hi, could you put a little more meat on the bones for the one BNY initiative in terms of products for customers, where you're talking about more bundled solutions? I understand it, and I guess you're having higher core servicing fees, but connecting from the higher core servicing fees, from the high level, let's bundle, let's have everyone work together. I'm just trying to connect the dots a little more.

Michael Lawrence Mayo: Hi, could you put a little more meat on the bones for the one BNY initiative in terms of products for customers, where you're talking about more bundled solutions?

Michael Lawrence Mayo: Thematically, I understand it, and I guess you're having higher core servicing fees.

Michael Lawrence Mayo: But connecting from the higher core servicing fees, from the high level, let's bundle, let's have everyone work together, I'm just trying to connect the dots a little more.

Michael Mayo: I'm just trying to connect the dots a little more. No, understood, Mike, and you know, you'd asked me a question; it's probably about more than a year ago now, where you had essentially challenged the fact that in order for something like one BNY to be successful, it can't just be hearts and minds. It's got to be deeply operationalized, and we talked at that time about some of our future ambitions for how to really bring it home. So the way that I would now answer your question is we are rallying around the three strategic pillars that Dermott and I both have talked about a bunch, and this is about being more for our clients.

Robin Antony Vince: And you know, you asked me a question, it's probably about more than a year ago now, where you challenged the fact that in order for something like 1BNY to be successful, it can't just be hearts and minds; it's got to be deeply operationalized. And we talked at that time about some of our future ambitions for how to really bring it home. So the way that I would now answer your question is that we are rallying around the three strategic pillars that Dermot and I both have talked about a lot. And this is about being more for our clients. And that's just not just words anymore.

Michael Lawrence Mayo: You know, I understood, Mike, and you know, you'd ask me a question, it's probably about

Michael Lawrence Mayo: More than a year ago now.

Michael Lawrence Mayo: where you had essentially challenged the fact that in order for something like 1BNY to be successful it can't just be hearts and minds, it's got to be deeply operationalized and we talked at that time about some of our future ambitions for how to really bring it home.

Speaker Change: So, the way that I would now answer your question is...

Robin Antony Vince: It's not just a movement. It's not just appealing to our people to be able to do, to be client-obsessed. It's about elevating the effectiveness of our sales organization and the process, driving client service differently than we used to.

Speaker Change: We are rallying around the three strategic pillars that Dermot and I both have talked about a bunch and this is about being more for our clients.

Robin Vince: And that's not just words anymore; it's not just a movement; it's not just appealing to our people to be able to do to do to be client obsessed. It's about elevating the effectiveness of our sales organization and the process, driving client service differently than we used to. It's about the innovative new products, as we were just talking about. Whoa, that's a good example. We are being more for clients in that example, and we are also delivering the whole of the company. So it is a great one BNY example, purging, which used to be somewhat off to the side in the company a few years back, now very much at the heart and benefiting from that integration with all of the other capabilities that we have.

Speaker Change: And that's not just words anymore, it's not just a movement, it's not just appealing to our people to be able to do, to be client obsessed, it's about elevating the effectiveness of our sales organization and the process, driving client service differently than we used to. It's about...

Robin Antony Vince: The innovative new products, as we were just talking about Wove, that's a good example. We are being more for clients in that example, and we are also taking care of the whole of the company. So it is a great BNY example, Pershing, which used to be somewhat off to the side in the company a few years back, now very much at the heart and benefiting from that integration with all of the other capabilities that we have, to use the term that Dermot used earlier on, of meeting our clients where they are.

Speaker Change: The innovative new products, as we were just talking about Wove, that's a good example. We are being more for clients.

Speaker Change: In that example, and we are also delivering the whole of the company. So it is a great one BNY example, Pershing, which used to be somewhat off to the side in the company a few years back, now very much at the heart and benefiting from that integration with all of the other capabilities that we have. And then you hit on a critical word, which is solutions.

Robin Vince: And then you hit on a critical word, which is solutions because that next journey to use the term that Dermott used earlier on of meeting our clients where they are. It's not just about us selling a bunch of great products and client platforms to our clients; it's about the fact that when we look at the challenges that our clients have, they actually need things that cut across multiple parts of our company. And rather than going in disconnected and showing them individually and trying to have them piece it all together, we can now show up and we can actually show them these solutions which bring all the componentry together to solve their needs.

Speaker Change: Because that next journey...

Speaker Change: To use the term that Dermot used earlier on of meeting our clients where they are It's not just about us selling a bunch of great

Robin Antony Vince: It's not just about us selling a bunch of great products and client platforms to our clients. It's about the fact that when we look at the challenges that our clients have, they actually need things that cut across multiple parts of our company. And rather than going in disconnected and showing them individually and trying to have them piece it all together, we can now show them, and we can actually show them the solutions which bring all the components together to solve their needs.

Speaker Change: [inaudible]

Speaker Change: Unknown Speaker And rather than going in disconnected and showing them individually and trying to have them piece it all together, we can now show up and we can actually show them these solutions.

Michael Lawrence Mayo: And both Dermot and I talked a bit about that in our prepared remarks, and that's the next level of the maturity of that one BNY work that we're really doing. That's evolving from an initiative and hearts and minds to making everything that we're doing in our commercial organization, the sales practices, the sales targets, the way that we're bringing people together, the account management process, client service, the digital delivery of tools, and the way that we're thinking about everything that equips our salespeople to be effective, cross-training.

Robin Vince: And both Dermott and I talked a bit about that in our prepared remarks, and that's the next level of the maturity of that one BNY work that we're really doing. That's involving from an initiative and a hearts and minds to making everything that we're doing in our commercial organization, the sales practices, the sales targets, the way that we're bringing people together, the account management process, the client service, the digital delivery of tooling, and the way that we're thinking about everything that equips our sales people to be effective, the cross training. We're bringing all of those things together and maturing our commercial model, and over time we think there's a lot of value both in the process and in what we're actually delivering to customers.

Speaker Change: which bring all the componentry together to solve their needs. And both Dermot and I talked a bit about that in our prepared remarks, and that's the next level of the maturity.

Speaker Change: of that one BNY work that we're really doing that's evolving from an initiative and a hearts and minds.

Speaker Change: to making everything that we're doing in our commercial organization, the sales practices, the sales targets.

Speaker Change: The way that we're bringing people together, the account management process, the client service, the digital delivery of tooling, and the way that we're thinking about everything that equips our salespeople to be effective, the cross-training, we're bringing all of those things together and maturing our commercial model.

Michael Lawrence Mayo: We're bringing all of those things together and maturing our commercial model. And over time, we think there's a lot of value both in the process and in what we're actually delivering to clients. And so when you wrap it all up, I mean, what wallet share do you have per customer today? Where was it a few years ago?

Speaker Change: And over time, we think there's a lot of value both in the process and in what we're actually delivering to clients.

Robin Vince: And so when you wrap it all up, I mean, what wallet share do you have per customer today? Where was it a few years ago? Where do you hope that to go just in terms of a zip code of expectations? I think some of those metrics, as we think about ways in which to show you that story more over time, some of those metrics will be in our future. Right now I'm going to point you to two things. There are a whole bunch of inputs. I described a bunch of them. And I think over the course of the past couple of years, we've been trying to really show the key inputs, which we think are the leading indicators for performance.

Speaker Change: And so when you wrap it all up, I mean, what wallet share do you have per customer today? Where was it a few years ago? Where do you hope that to go just in terms of a zip code of expectations?

Robin Antony Vince: Where do you hope that it will go just in terms of a zip code of expectation? I think some of those metrics, as we think about ways in which to show you that story more over time, some of those metrics will be in our future. Right now, I'm going to point you to two things. There are a whole bunch of inputs.

Speaker Change: I think some of those metrics, as we think about ways in which to show you that story more over time, some of those metrics will be in our future.

Robin Antony Vince: I described a bunch of them. And I think over the course of the past couple of years, we've been trying to really show the key inputs, which we think are the leading indicators for performance. And then you have to actually look at the fee growth result. And you saw that in the first quarter; you saw that in the second quarter.

Speaker Change: Right now I'm going to point you to two things. There are a whole bunch of inputs. I described a bunch of them. And I think over the course of the past couple of years we've been trying to really show the key inputs, which we think are the leading indicators for performance.

Dermot McDonogh: And then you have to actually look at the fee growth results. And you saw that in the first quarter; you've seen that in the second quarter. And that's some of the output. But the story that Dermot and I are both trying to describe is a story of a maturing of a process, but with a still a distance to go and opportunity ahead. Mike, just to put a metric on us because it's just to give an indication, because we need to mature the metrics as we proceduralize all the strategic comments that Robin has just outlined, year over year, the amount of business that we've won that touches more than one line of business.

Speaker Change: And then you have to actually look at the fee growth results, and you saw that in the first quarter. You've seen that in the second quarter. And that's some of the output. But the story that Dermot and I are both trying to describe is a story of a maturing of a process but with still a distance to go and opportunity ahead.

Robin Antony Vince: And that's some of the output. But the story that Dermot and I are both trying to describe is a story of the maturing of a process, but with still a distance to go and opportunity ahead. Mike, just to put a metric on us.

Dermot William McDonogh: Because it's just to give an indication because we need to mature the metrics as we proceduralize all the strategic comments that Robin has just outlined. Year over year, the amount of business that we've won that touches more than one line of business has increased by a third off, albeit a very low base. So I wouldn't draw too much into the metric, but just the fact that we're showing up in a different way, and clients are buying products and services from more than one line of business because we can deliver integrated solutions. And that's the key that, over time, we'll be able to track that and communicate that in a more objective way as that strategy takes root. understood.

Michael Lawrence Mayo: Mike, just to put a metric on us...

Speaker Change: because it's just to give an indication because we need to mature the metrics as we proceduralize all the strategic comments that Robin has just outlined year-over-year

Speaker Change: The amount of business that we've won, that touches more than one line of business.

Dermot McDonogh: You know, has increased by a third off, all be it a very low base. So I wouldn't draw too much into the metric, but just the fact that we're showing up in a different way and clients are buying products and services from more than one line of business because we can deliver integrated solutions. And that's the key that, over time, we'd be able to track that and communicate that in a more objective way as that strategy takes root. Understood.

Speaker Change: You know, has increased.

Speaker Change: by a third of all be it a very low base. So I wouldn't draw too much into the metric, but just the fact that

Speaker Change: We're showing up in a different way and clients are buying products and services from more than one line of business because we can deliver integrated solutions. And that's the key that over time, we'll be able to track that and communicate that in a more objective way as that strategy takes root.

Michael Lawrence Mayo: So when all's said and done, core servicing fees over time, whether it's aspirational or a specific target, where should core servicing fee growth be? My answer to that, which I recognize is a little bit unsatisfactory, is we're going to keep pointing you back to positive operating leverage, which is really how we're focusing our own growth. We think that each quarter, each year has a different composition, but higher fee growth over time is a very important part of that combination of solutions. But any individual quarter or year is going to have a different composition. We're controlling the things that we can control, albeit we're stoking the engine for the growth of organic fees over time.

Dermot McDonogh: So when all said and done, core servicing fees over time, whether it's aspiration or a specific target, where should core servicing fee growth be? My answer to that, which I recognize is a little bit unsatisfying, is we're going to keep pointing you back to the positive operating leverage, which is really how we're focusing for our own growth. We think that each quarter each year has a different composition to it, but higher fee growth over time is a very important part of that combination of solutions. But any individual quarter or year is going to have a different composition.

Speaker Change: Understood. So when all said and done, core servicing fees over time, whether it's aspirational or a specific target, where should core servicing fee growth be?

Speaker Change: [inaudible]

Speaker Change: My answer to that, which I recognize is a little bit unsatisfying, is we're going to keep pointing you back to the positive operating leverage, which is really how we're focusing for our own growth. We think that each...

Speaker Change: [inaudible]

Dermot McDonogh: We're controlling the things that we can control, albeit we're stoking the engine for growth of organic fees over time. Got it.

Speaker Change: Albeit, we're stoking the engine for growth of organic fees over time.

Speaker Change: Got it. Thank you.

Speaker Change: Thank you.

Alexander Blostein: Our next question is coming from Alex Blosting with Goldman Sachs. Please go ahead. Hey, good morning.

Alexander Blostein: Thank you. Thank you. Our next question is coming from Alex Blostein with Goldman Sachs. Please go ahead.

Speaker Change: Our next question is coming from Alex Blostein with Goldman Sachs. Please go ahead.

Alexander Blostein: Hey, good morning. Thanks for squeezing me in on this. I wanted to touch on expenses and operating leverage. So, expenses are up a little bit year-to-date and year-over-year. Sounds like you guys are still targeting flat expenses for the year, despite the fact that revenues are obviously shaking out a little bit better than you hoped. So, maybe kind of walk us through where you see the flex in the expense base to keep it kind of that flattish run rate.

Alexander Blostein: Thanks for squeezing me in on this. I wanted to touch on expenses and operating leverage. So expenses up a little bit year to date, year to year. Sounds like you guys are still targeting flat expenses for the year, despite the fact that revenues are obviously shaking out a little bit better than you hope.

Alexander Blostein: Hey, good morning. Thanks for squeezing me in on this. I wanted to touch on expenses and operating leverage. So, expenses up a little bit year-to-date, year-over-year. Sounds like you guys are still targeting flat expenses for the year, despite the fact that revenues are obviously shaking out a little bit better than you hoped. So, maybe kind of walk us through where you see the flex in the expense base.

Dermot McDonogh: So maybe kind of walk us through where you see the flex in the expense base to keep it kind of that flat is run rate, but I guess more importantly, you guys had a target for pretext margin to be at 33% plus recently. You're doing 33% this quarter, and now you don't want to get too carried away with a single quarter, but feels like you have an ability to reset the bar.

Alexander Blostein: But I guess more importantly, you guys recently set a target for pre-tax margin to be at 33% plus recently. You're doing 33% this quarter, and obviously, you don't want to get too carried away with a single quarter. But it feels like you have the ability to reset the bar.

Alexander Blostein: to keep it kind of that flattish run rate, but I guess more importantly, you know, you guys had a target for pre-tax margin to be at 33% plus recently.

Alexander Blostein: You're doing 33% this quarter, and obviously you don't want to get too carried away with a single quarter, but it feels like you, you know, have an ability to reset the bar, so maybe talk a little bit about what that plus within the 33 could look like a couple years out.

Dermot McDonogh: So maybe talk a little bit about what that plus within the 33 could look like a couple of years out. Thanks, Alex. So I guess I would start with the margin part of this. We need to, we need to consistently do this. And so one quarter doesn't a medium-term target make. So I'm very pleased that we've done this, but now I want to see it next quarter, the following quarter, the following quarter. So, you know, execution is key. And just showing up in a very disciplined way every day is really a bit important to delivering out that we don't want to be known as a one-hit wonder.

Dermot William McDonogh: So, maybe talk a little bit about what that plus within the 33% could look like a couple of years out. Thanks, Alex. I guess I would start with the margin part of it.

Alexander Blostein: Thanks, Alex. So, I guess I would start with the margin part of it.

Dermot William McDonogh: We need to consistently do it, and so one quarter doesn't a medium-term target make. So I'm very pleased that we've done it, but now I want to see it next quarter, the following quarter, the following quarter.

Speaker Change: We need to, we need to consistently do us.

Speaker Change: and so one-quarter doesn't a medium-term target make.

Speaker Change: So,

Speaker Change: I'm very pleased that we've done it, but now I want to see it next quarter, the following quarter, the following quarter.

Dermot William McDonogh: So, you know, execution is key, and just showing up in a very disciplined way every day is really important to delivering on that we don't want to be known as a one-hit wonder. So while I'm pleased that we've managed to do it, I want to see it repeated on a consistent basis. So that's what I would say about March.

Speaker Change: You know, execution is key and just showing up in a very disciplined way every day.

Dermot McDonogh: So, while I'm pleased that we've managed to do it, I want to see it repeat on a consistent basis.

Speaker Change: [inaudible]

Dermot McDonogh: So that's what I would say on margin on expenses at you, and I talked in Madrid a few weeks back at your conference. And I kind of said a little bit like we're in the zip code of flat for the year. It's all about running the company better. It's very important that we have 53,000 people wrapped around the same aspiration that we, as a leadership team, have. And everybody's focused on doing it. So there is a real momentum on running the company better, which is the input to how we show up with expenses, where being where they are as opposed to a top down approach.

Dermot William McDonogh: On expenses, you and I talked in Madrid a few weeks ago at your conference, and I kind of said a little bit like we're in the zip code of a flat for the year. It's all about running the company better. It's very important that we have 53,000 people wrapped around the same aspiration that we as a leadership team have, and everybody's focused on doing it.

Dermot William McDonogh: So there is a real momentum for running the company better, which is the input to how we show up with expenses being where they are, as opposed to a top-down approach. So a very different cultural experience within the firm in terms of how we're doing it. And the reason why we're a little bit above trend in the first couple of quarters this year is what I said to you at the conference: revenue-related expenses.

Speaker Change: and I kind of said a little bit like we're in the zip code of flat for the year. It's all about running the company better.

Speaker Change: It's very important that we have 53,000 people wrapped around the same aspiration that we as a leadership team have, and everybody's focused on doing it. So there is a real momentum on running the company better, which is the input to

Dermot McDonogh: So very different cultural experience within the firm in terms of how we're doing it. And the reason why we're a little bit above trend in the first couple of quarters this year is what I said to you at the conference: revenue-related expenses. And so I kind of anchor that in the overall where we are for positive operation leverage in the year. And in my remarks, I kind of said I feel optimistic about delivering positive operating leverage for the year, which in a down 10% NII environment BNY hasn't really executed to that level before. And so, and also, you know, Q2 is a seasonally strong quarter for us, which would feed that the margin of 33%.

Speaker Change: How we show up with expenses where being where they are as opposed to a top-down approach. So very different cultural experience within the firm in terms of how we're doing it.

Speaker Change: And the reason why we're a little bit above...

Speaker Change: Trend in the first couple of quarters this year is what I said to you at the conference is Revenue related expenses and so I kind of anchor that in overall where we are for positive operating leverage in the year

Dermot William McDonogh: And so I kind of anchor that in overall where we are for positive operating leverage for the year. And in my remarks, I kind of said, I feel optimistic about delivering positive operating leverage for the year, which in a down 10% NII environment, BNY hasn't really executed to that level before. And also, you know, Q2 is a seasonally strong quarter for us, which would feed the margin of 33%. So I feel good about expenses. I feel good about flatting.

Speaker Change: And in my remarks, I kind of said I feel optimistic about delivering positive operating leverage for the year.

Speaker Change: which in a down 10% NII environment, BNY

Speaker Change: Q2 is a seasonally strong quarter for us which would feed the margin of 33% so I feel good about expenses, I feel good about flat.

Dermot McDonogh: So I feel good about expenses. I feel good about the flash.

Alexander Blostein: Notwithstanding, there's pressure on that from a revenue-related expense part, but we're very determined to deliver positive operating leverage to our shareholders this year. Excellent. Great.

Dermot McDonogh: Notwithstanding there's pressure to that from a revenue-related expense part, but we're very determined to deliver positive operating leverage to our shareholders this year.

Speaker Change: Notwithstanding, there's pressure to that from a revenue-related expense part, but we're very determined to deliver positive operating leverage to our shareholders this year.

Dermot McDonogh: Excellent. Great.

Dermot William McDonogh: Well, my second quick question around the balance sheet. There's a lot of discussion around deposits, but I wanted to zone in on the assets outside of the balance sheet for a second. We've seen pretty nice growth from you guys in both the securities portfolio and loans. So could you spend a minute on sort of the sources where you're investing, and then your outlook and maybe deploying some of the liquidity that seems to be perhaps a bit more sticky into both long growth and securities?

Dermot McDonogh: Well, my second quick question around the balance sheet. There's a lot of discussion around deposits, but I wanted to zone in on the assets out of the balance sheet for a second. We've seen pretty nice growth from you guys and build the securities portfolio and loans sequentially.

Speaker Change: Excellent. Great. Well, my second quick question around the balance sheet, there's a lot of discussion around deposits, but I wanted to zone in on the assets out of the balance sheet for a second. We've seen pretty nice growth from you guys in both the securities portfolio and loans sequentially. So could you spend a minute on sort of the sources where you're investing and then your outlook and maybe deploying some of the liquidity that seems to be perhaps a bit more sticky into both loan growth and securities?

Dermot McDonogh: So could you spend a minute on sort of the sources where you're investing and then your outlook and maybe deploying some of the liquidity that seems to be perhaps a bit more sticky into both long growth and securities. So yeah, look, I feel very proud of the CIO book team, what they've accomplished over the last couple of years, which is really from Q3 of 22. It really has been just a terrific collaboration with inside the firm, and we're deploying where we think we can see opportunity. Our CIO likes to use the word nibbling, and so we're kind of seeing where the next leg is, and we're deploying where we think we can see opportunity to continue to grow NII.

Dermot William McDonogh: So yeah, look, I feel very proud of the CIO book team, what they've accomplished over the last couple of years, which is really from Q3 of 22. It really has been just a terrific collaboration with inside the firm. And we're deploying where we think we can see opportunity. Our CIO likes to use the word nibbling.

Speaker Change: So yeah, look.

Speaker Change: Very feel very proud of the CIO book team what they've accomplished over the last couple of years which is really from

Speaker Change: Q3 of

Speaker Change: of 22.

Speaker Change: It really has been just a terrific collaboration with Inside the Firm.

Speaker Change: and we're deploying.

Speaker Change: where we think we can see opportunity. Our CIO likes to use the word nibbling and so we're kind of

Dermot William McDonogh: And so we're kind of seeing where the next leg is, and we're deploying where we think we can see opportunity to continue to grow NII. So it's opportunistic at the moment.

Speaker Change: Seeing where the next leg is, and we're deploying where we think we can see opportunity to continue to grow NII. So it's opportunistic at the moment, but we feel overall very good about that aspect of it. We're still rolling off.

Dermot McDonogh: So it's opportunistic at the moment, but we feel overall very good about that aspect of us. We're still rolling off the book into higher yielding securities. We're picking up the 200 basis points, and so that's feeding NII. And then on loan growth, I think the GLS team is doing a really good job of getting very liquidity-friendly deposits, which allows us to extend credit to our clients, and I think we're showing up in a different way to our clients who are important to us and extending our balance sheet to them as they look to buy products in more than one line of business.

Dermot William McDonogh: But we've feel overall very good about that aspect of us. We're still rolling off, and booking into higher yielding securities; we're picking up the 200 basis points. And so that's feeding NII.

Speaker Change: The book Into Higher Yielding Securities, we're picking up the 200 basis points.

Dermot William McDonogh: And then on loan growth, I think the GLS team is doing a really good job of getting very liquidity-friendly deposits, which allows us to extend credit to our clients. And I think we're showing up in a different way to our clients who are important to us and extending our balance sheet to them as they look to buy products in more than one line of business. So where we need the balance sheet to support business activities, that's what we're doing. And it's a kind of a strategic tool in our kit for doing that. Awesome, thanks very much.

Speaker Change: and so that's feeding NII.

Speaker Change: And then on loan growth, I think the GLS team is doing a really good job of getting very liquidity-friendly deposits, which allows us to extend credit to our clients.

Speaker Change: and I think we're showing up in a different way to our clients who are important to us and extending our balance sheet to them as they look to buy products in more than one line of business. So where we need the balance sheet to support

Dermot McDonogh: So where we need the balance sheet to support business activities, that's what we're doing, and it's a strategic tool in our kit for doing this.

Speaker Change: Business Activities. That's what we're doing and it's a kind of a it's a strategic tool in our kit for for doing that.

Dermot McDonogh: Awesome.

Dermot McDonogh: Thanks very much.

Speaker Change: Awesome. Thanks very much.

Gerard Cassidy: Our next question is coming from Gerard Cassidy with RBC.

Gerard Sean Cassidy: Our next question is coming from Gerard, with RBC, please go ahead. Good morning, Dermot. Good morning, Robin. Good morning, Gerard.

Gerard Cassidy: Please go ahead. Good morning, Dermot and Robin. Good morning, Gerard.

Speaker Change #100: Our next question is coming from Gerard Cassidy with RBC. Please go ahead.

Speaker Change #101: Good morning, Dermot. Good morning, Robin.

Gerard Sean Cassidy: Dermot, can you share with us now that we're entering into a phase with monetary policy of quantitative tightening, easing up a bit, you guys obviously have been through QE, you've seen the initial stages of QT, do you have any thoughts on how this could affect your balance sheet over the next 12 to 18 months? We do a lot of work on that, Gerard. And look, you know, CCAR forces us or, you know, the Fed to do that work as well. And so rates up, rates down, quantitative tightening, quantitative easing. We look at it every which way to Sunday.

Dermot McDonogh: Dermot, can you share with us now that we're entering into a phase with monetary policy of quantitative tightening easing up a bit? You guys obviously have been through QE. You've seen the initial stages of QT. Do you have any thoughts on how this could affect your balance sheet over the next 12, 18 months? Have you guys done any type of modeling to see what kind of effect the QT as the strings could have on your balance sheet? So we do a lot of work on that, Gerard. And look, you know, C car forces us or, you know, to do that work as well.

Gerard Sean Cassidy: Good morning, Gerard.

Gerard Sean Cassidy: Dermot, can you share with us, now that we're entering into a phase with monetary policy of quantitative tightening.

Gerard Sean Cassidy: Easing up a bit. You guys obviously have been through QE. You've seen the initial stages of QT. Do you have any thoughts on how this could affect your balance sheet over the next 12 to 18 months? Have you guys done any type of modeling to see what kind of effect?

Gerard Sean Cassidy: The QT as it shrinks could have on your balance sheet.

Gerard Sean Cassidy: So, we do a lot of work on that, Gerard, and look, you know, CCAR forces us, or, you know,

Dermot McDonogh: And so rates up, rates down, quantitative tightening, quantitative easing. We look at every which way to Sunday. But the thing that I would kind of remind you and everybody who's listening in is, you know, our balance sheet is one of our strengths in, you know, this time last year and Q1 of last year, we kind of, you know, we called our balance sheet of the port in the storm for our clients. And you see that slight quality. So we're kind of very proud of our balance sheet. It's vanilla, it's liquid, it's, it stands stress tests, and it allows us to be there for our clients.

Gerard Sean Cassidy: to do that work as well. And so rates up, rates down, quantitative tightening, quantitative easing, we look at every which way to Sunday. But the thing that I would kind of remind you and everybody who's listening in is

Dermot William McDonogh: But the thing that I would kind of remind you and everybody who's listening in is that our balance sheet is one of our strengths. In, you know, this time last year and Q1 of last year, we kind of, you know, called our balance sheet the port in the storm for our clients. And you see that flight quality. So we're kind of very proud of our balance sheet. It's vanilla, it's liquid, it stands the stress test.

Gerard Sean Cassidy: Our balance sheet is one of our strengths. This time last year, in Q1 of last year, we called our balance sheet the port in the storm for our clients, and you see that flight quality. We're very proud of our balance sheet.

Gerard Sean Cassidy: It's vanilla, it's liquid, it stands stress tests.

Dermot William McDonogh: And it allows us to be there for our clients. So it's kind of, it's short in duration; we repositioned it going into the higher for longer rate environment. As you will remember, in Q4 of 22, we repositioned it.

Robin Vince: So it's kind of short in duration. We repositioned this going into the higher-for-longer race environment, as you will remember in Q4 of '22, we repositioned this. And so we've taken a lot of proactive steps to make our balance sheet durable and liquid and to withstand a wide range of scenarios. And Gerard, I'm just going to add that, you know, it's easy to think that just because at this very moment in time, you know, we're looking out and there seems to be some greater consensus than we've had for a little while around what might happen with the Fed in the fall across September and the balance of the year.

Gerard Sean Cassidy: and it allows us to be there for our clients so it's kind of it's short in duration and we repositioned it going into the higher for longer rate environment

Robin Antony Vince: And so we've taken a lot of proactive steps to make our balance sheet durable and liquid and to withstand a wide range of scenarios. And Gerard, I'm just going to add that, you know, it's easy to think that just because at this very moment in time, you know, we're looking out and it seems to be some greater consensus than we've had for a little while around what what might happen with the Fed in the fall across September and the balance of the year, it's easy to think somehow that the range of risks is somehow narrowed as a result of that.

Gerard Sean Cassidy: As you will remember, in Q4 of 22, we repositioned it, and so we've taken a lot of proactive steps to make our balance sheet.

Speaker Change #103: Gerald, I'm just going to add that, you know, it's easy to think that just because at this very moment in time, you know, we're looking out and it seems to be some greater consensus than we've had for a little while around what might happen with the Fed in the fall, across September and the balance of the year. It's easy to think somehow that the range of risks is somehow narrowed as a result of that, but there's still a lot of uncertainty in the world. We've got a whole bunch of other types of geopolitical risks out in the world. We're sort of continuing to grind through elections that we've talked about through the course of the year. There are all sorts of other things happening. We've still got wars going on. And so our approach to all of these questions, and Dermot really made the point.

Robin Vince: It's easy to think somehow that the range of risks are somehow narrowed as a result of that. But there's still a lot of uncertainty in the world. We've got a bunch of other types of geopolitical risks out in the world; we're sort of continuing to grind through elections that we've talked about through the course of the year. There were all sorts of other things happening; we still got wars going on. And so our approach to all of these questions, and Dermot really made the point, is to be prepared for all the different types of outcomes that are possible.

Robin Antony Vince: But there's still a lot of uncertainty in the world. We've got a bunch of other types of geopolitical risks out in the world, we're sort of continuing to grind through elections that we've talked about through the course of the year, there are all sorts of other things happening, we've still got wars going on.

Robin Antony Vince: And so our approach to all of these questions, and Dermot really made the point, is to be prepared for all the different types of outcomes that are possible. And so you can see us, we run conservative on liquidity, we run conservative on capital, you can see it in our ratios that we talked about that Dermot outlined in his prepared remarks. And that's a very important anchor point for us, so that we can be agile according to how things play out because the one thing we can be absolutely sure of is that they won't play out exactly the way anybody expects. Very good.

Robin Vince: And so you can see us; we run conservative on liquidity, we run conservative on capital. You can see it in our ratios that we talked about and that Dermot outlined in his prepared remarks. And that's a very important anchor point for us so that we can be agile according to however things play out, because the one thing we can be absolutely sure of is they won't play out exactly the way anybody expects.

Speaker Change #103: to be prepared for all the different types of outcomes that are possible. And so you can see us.

Speaker Change #104: We run conservative on liquidity. We run conservative on capital. You can see it in our ratios.

Speaker Change #104: that we talked about and that Dermot outlined in his prepared remarks and that's a very important anchor point for us so that we can be agile according to however things play out because the one thing we can be absolutely sure of is they won't play out exactly the way anybody expects.

Robin Vince: Very good.

Gerard Sean Cassidy: And then, just as a follower, Robin, you talked about the new business wins in the quarter, and you talked about 1BNY as well. It appears that you're having success in chipping away at or breaking down some of the silos that many organizations always struggle with. Can you share with us some of the tools you're using to break those silos? And how, you know, I would assume you're not 100% complete breaking them all down, but how far along are you in actually breaking them down?

Gerard Cassidy: And then just as a follower, Robin, you talked about the new business wins in the quarter, and you talked about one BNY as well. It appears that you're having success in chipping down or breaking down some of the silos that many organizations always struggle with. Can you share with us some of the tools you're using to break those silos, and how I would assume you're not 100% complete breaking them all down, but how far along are you actually breaking them down? Well, the company's been around for 240 years, and we've acquired a lot of different businesses and companies over time.

Speaker Change #105: Very good. And then just as a follow-up, Robin, you know, you talked about the new business wins in the quarter and you talked about 1BNY as well. It appears that you're having success in chipping down or breaking down some of the silos that many organizations always, you know, struggle with. Can you share with us some of the tools you're using to break those silos and how, you know, I would assume you're not 100% complete breaking them all down, but how far along are you in actually breaking them down?

Robin Antony Vince: Well, the company's been around for 240 years, and we've acquired a lot of different businesses and companies over time. And so these things do build up over a period of time. But the short answer to your question is, we passionately believe, as a whole leadership team, that the answer to the question is culture. And so I've said before, you know, in a slightly pithy way, but quoting other people or sort of paraphrasing them, if you will, that culture eats strategy for breakfast, as it was once famously said by Peter Drucker.

Robin Antony Vince: Well, the company's been around for 240 years, and we've acquired a lot of different businesses and companies over time. And so these things do build up over a period of time. But the short answer to your question is, we passionately believe, as a whole leadership team, that the answer to the question is culture.

Robin Vince: And so these things do build up over a period of time. But the short answer to your question is, we've passionately believe as a whole leadership team that the answer to the question is culture. And so I've said before, you know, in a slightly pithy way, but quoting other people or sort of paraphrasing them, if you will, that culture eats strategy for breakfast, as it was once famously said by Peter Drucker. And we add to that execution eat strategy for lunch. That's just a long way of saying that the power our culture pillar, which is one of our three pillars, is the thing that's enabling us to run our company better.

Robin Antony Vince: And so I've said before, you know, in a slightly pithy way, but and quoting other people or sort of paraphrasing them, if you will.

Robin Antony Vince: that

Robin Antony Vince: Culture.

Robin Antony Vince: And we add that execution eats strategy for lunch. That's just a long way of saying that the power, our culture pillar, which is one of our three pillars, is the thing that's enabling us to run our company better. And that, in turn, is allowing us to be more for our clients. And so the trick to this for us has been investing in our people. It's creating benefits, experiences, the employee experience, the pride association with the company, and the feedback loop that shows that when we do these things, we get better outcomes for our clients, and that translates into better outcomes on the bottom line. And so there's a flywheel effect that actually builds on itself.

Robin Antony Vince: Eat strategy for breakfast, as it was once famously said by Peter Drucker, and we add to that execution, eat strategy for lunch. That's just a long way of saying.

Robin Antony Vince: that the Power Our Culture pillar, which is one of our three pillars, is the thing.

Robin Vince: And that in turn is allowing us to be more for our clients. And so the trick to this for us has been investing in our people. It's been creating the benefits, the experiences, the employee experience, the pride association with the company, the feedback loop that shows that when we do these things, we get better outcomes for our clients. And that translates into better outcomes in the bottom line. And so there's a flywheel effect here that actually builds on itself. And the spring in the step of our employees is now powering that forward. And that's what gives us confidence that we've really turned the corner on it.

Robin Antony Vince: that's enabling us to run our company better, and that in turn is allowing us to be more for our clients. And so...

Robin Antony Vince: The trick to this for us has been investing in our people.

Robin Antony Vince: It's been creating the benefits, the experiences, the employee experience, the pride, association with the company, the feedback loop that shows that when we do these things,

Robin Antony Vince: We get better outcomes.

Robin Antony Vince: for our clients, and that translates into better outcomes in the bottom line. And so there's a flywheel effect here.

Robin Antony Vince: And the spring in the step of our employees is now powering that forward. And that's what gives us confidence that we've really turned the corner on it. People want to throw in with the whole thing because they see that it's not only better for the company. It's better for their business because joining their products with other products around the company is allowing us to be more for clients.

Robin Antony Vince: that actually builds on itself.

Robin Antony Vince: and the spring in the step of our employees is now powering that forward and that's what gives us confidence.

Robin Vince: People want to throw in with the whole because they see that it's not only better for the company. It's actually better for their business because joining their products with other products around the company is allowing us to be more for clients. And it actually feels good to see the benefits in the ultimate results. So that's for us, the North Star of how we're doing it. And while we've certainly got a distance to go, the early results have been pretty encouraging.

Robin Antony Vince: Robin Vince, www.robinvince.com

Robin Antony Vince: And it actually feels good to see the benefits in the ultimate results. So that's, for us, the North Star of how we're doing it. And while we've certainly got a distance to go, the early results have been pretty encouraging. Very good. Thank you. Thank you.

Robin Antony Vince: And it actually feels good to see the benefits in the ultimate results. So that's, for us, the North Star of how we're doing it. And while we've certainly got a distance to go, the early results have been pretty encouraging.

Robin Vince: Very good.

Brian Badil: Thank you.

Speaker Change #106: Very good. Thank you.

Brian Badil: Our next question is coming from Brian Badil with Dolce Abate. Please go ahead. Oh, great. Thanks. Thanks, Monica. Maybe if I could just come back to the sticking with the NAI guide of down 10% of having trouble getting there. Just to confirm, it sounds like what you're saying is it's really almost totally a deposit-driven guide on a seasonal basis. And I just wanted to sort of confirm that, given how you've outlined the balance sheet sensitivity to different rates scenarios, is pretty strong. And, of course, you have the benefit of securities, portfolio reinvestment. So it's really simply just the seasonal deposit dynamic.

Speaker Change #107: Thank you.

Speaker Change #108: Our next question is coming from Brian Bedell with Dosha Bank. Please go ahead.

Brian Bertram Bedell: Thanks. Maybe if I could just come back to sticking with the NII guide of down 10%. I'm having trouble getting there. Just to confirm, Dermot, like what you're saying is it's really almost totally a deposit-driven guide on a seasonal basis, and I just wanted to sort of confirm that, given how you've outlined the balance sheet sensitivity to different rate scenarios is pretty strong, and, of course, you have the benefit of securities portfolio reinvestment.

Brian Bertram Bedell: Unknown Speaker Oh, great. Thanks. Thanks, guys. Maybe if I could just come back to the sticking with the NII guide of down 10%, I'm having trouble getting there. Just to confirm, it sounds, Dermot, like what you're saying is it's really almost totally a deposit-driven guide on a seasonal basis.

Brian Bertram Bedell: And I just wanted to sort of confirm that given how you've outlined the balance sheet sensitivity to different rate scenarios is pretty strong, and of course you have the benefit of securities portfolio reinvestment, so is it really simply just the seasonal deposit dynamic and then if you can just talk about how NIBs factor into that seasonal deposit dynamic and then of course if we move into next year in 1Q seasonally of course we should be back positive again and I just wanted to confirm that.

Brian Bertram Bedell: So is it really simply just the seasonal deposit dynamic, and then if you can just talk about how NIBs factor into that seasonal deposit dynamic, and then, of course, as we move into next year in 1Q, seasonally, of course, we should be back positive again. So I guess, Brian, in the way you've asked the question, in some ways, you've answered the question to yourself.

Dermot McDonogh: And then if you can just talk about how NIBs factor into that seasonal deposit dynamic. And then, of course, to move into next year, in one queue, yes, seasonally, of course, that we should be back positive again. And I just want to confirm that.

Dermot McDonogh: So I guess Brian, in the way you've asked the question, in some ways, you've answered the question to yourself. So I would kind of confirm A, how you're thinking about us in terms of the season of decline. And it is a deposit story. And I would just kind of reference last year as the guide in terms in January of last year we guided 20% for the year and then you know we started out the gates well and you as a collective put pressure on me to change the guidance, which I didn't do, and we ended the year at 24%. And so you know last year we used the word skewed to the upside but humble about the fact of what lies in front of us and I would say the percentages are different year this year the environment is different but the sentiment is the same.

Speaker Change #110: So, I guess, Brian , in the way you've asked the question, in some ways you've answered the question to yourself, so I would kind of confirm, A, how you're thinking about it in terms of the seasonal decline, and it's a deposit story, and I would just kind of reference last year as the guide in terms of...

Dermot William McDonogh: So I would kind of confirm, A, what you're thinking about it in terms of the seasonal decline, and it's a deposit story. And I would just kind of reference last year as the guide in terms of, In January of last year, we guided 20% for the year. And then, you know, we started out well. And you, as a collective, put pressure on me to change the guidance, which I didn't do.

Dermot William McDonogh: And we ended the year at 24%. And so, you know, last year, we used the word skewed to the upside, but we were humble about the fact of what lies in front of us. And I would say the percentages are different this year.

Speaker Change #110: In January of last year, we guided 20% for the year.

Speaker Change #110: And then, you know, we started out the Gates well, and you, as a collective, put pressure on me to change the guidance, which I didn't do, and we ended the year at 24%.

Speaker Change #110: And so, you know, last year we used the word skewed to the upside, but humble about the fact of what lies in front of us.

Dermot William McDonogh: The environment is different, but the sentiment is the same. I'm humble about what the outcome could be. And uncertainty is is, can be, is there because, as Robin said, for sure, what we think is going to happen is not going to happen, but I would say, You know, we're cautiously optimistic, and your point is, it is a deposit story. And within the deposit story, it really is the mix between NIBs and IBs.

Speaker Change #110: And I would say the percentages are different this year. The environment is different, but the sentiment is the same. I'm humble about what the outcome could be, and uncertainty is...

Dermot McDonogh: I'm humble about what the outcome could be, and uncertainty is there because, as Robin said, for sure what we think is going to happen is not going to happen. But I would say, you know, we're cautiously optimistic, and your point is it is a deposit story, and within the deposit story, it really is the mix between NIBs and IBs.

Speaker Change #111: Unknown Attendee is there because as Robin said, for sure what we think is going to happen is not going to happen, but I would say...

Speaker Change #112: You know, we're cautiously optimistic and your point is, it is a deposit story and within the deposit story it really is the mix between NIBs and IBs.

Dermot McDonogh: Right, okay, yeah, fair enough there, and it may be just back to the operating leverage dynamic, and this can be for both Dermot and Robin. The obviously you're you're starting off really well with you know like a hundred basis points plus a positive operating leverage as we move into the second half, not notwithstanding market movements that would obviously influence the C revenue dynamic. But given the traction that you that you're showing sequentially in your in your core business growth and core business sales, and I guess the fact that you've made these investments already, so I just wanted to get a sense of whether you feel like you're able to scale those investments in the second half. And you know obviously with your flat operating expense guidance, it would seem that's the case. If the revenue does turn out to be better than expected from an organic growth perspective, would we see the expense space creep up a little bit? You're not with any of course you so generate positive leverage.

Brian Bertram Bedell: And then maybe just back to the operating leverage dynamic, and this can be for both Dermot and Robin, obviously you're starting off really well with like 100 basis points plus of positive operating leverage as we move into the second half, notwithstanding market movements that would obviously influence the C revenue dynamic, but given the traction that you're showing sequentially in your core business growth and core business sales, and I guess the fact that you've made these investments already, and I If the revenue does turn out to be better than expected from an organic growth perspective, would we see the expense base creep up a little bit, notwithstanding, of course, you still generate positive leverage. Okay, a lot, lot, lot of questions in that second question.

Speaker Change #113: And then maybe just back to the operating leverage dynamic, and this can be for both Dermot and Robin.

Speaker Change #114: Obviously, you're starting off really well with 100 basis points plus of positive operating leverage as we move into the second half, notwithstanding market movements.

Speaker Change #114: that would obviously influence the fee revenue dynamic, but given the traction that you're showing sequentially in your core business growth and core business sales, and I guess the fact that you've...

Speaker Change #115: made these investments already. So I just wanted to get a sense of whether you feel like you're able to scale those investments.

Speaker Change #115: in the second half and you know obviously with your flat operating expense guidance it would seem that's the case.

Speaker Change #116: If the revenue does turn out to be better than expected from an organic growth perspective, would we see the expense base creep up a little bit? Notwithstanding, of course, you still generate positive leverage.

Dermot McDonogh: Okay a lot a lot a lot of questions in that second question so so I would say like when I talk to the teams right and this is quite you're kind of hitting on a very important point in that I really I really focus on running the company better and then we kind of focus on the operating leverage not expense as a means to an end and if revenue related expenses creep up that we starve businesses of investment to solve for a flat number because that's what we said we were going to do. I think that's quite important and it's important to get the balance right that investment and running the company better it kind of is the same thing and so that's a cultural transformation that's underway with all of our people and so we really are focused on getting value for money you know we spend a lot of money we spend over 12 and a half billion dollars every year and so we want to get the best value we can for that and we do that in a number of different ways so some of the investments that we've made over the last couple of years we're beginning to see the scale impact in that and you can see that in our most profitable segments market and wealth services it's a mid-40s margin we continue to invest West, at the margin, which is what you want us to see, which is what you want to see from us.

Speaker Change #117: Okay, a lot of questions in that second question. So, I would say, like, when I talk to the teams, right, and this is quite, you're kind of hitting on a very important point.

Dermot William McDonogh: So, I would say, like, when I talk to the teams, right, and this is quite, you're kind of hitting on a very important point. And in that, I really, I really focus on running the company better. And then we kind of focus on operating leverage, not expenses and means to an end. And if revenue-related expenses creep up, we starve businesses of investment to solve for a flat number because that's what we said we were going to do.

Speaker Change #117: in that I really...

Speaker Change #117: I really focus on running the company better and then we kind of focus on the operating leverage, not expenses and means to an end.

Speaker Change #117: And if revenue-related expenses creep up, that we starve businesses of investment to solve for a flat number, because that's what we said we were going to do. I think that's quite important.

Dermot William McDonogh: I think that's quite important. And it's important to get the balance right, that investment and running the company better. It kind of is the same thing. And so that's a cultural transformation that's underway with all of our people, and so we really are focused on getting value for money. You know, we spend a lot of money; we spend over $12.5 billion every year. And so we want to get the best value we can for that. And we do that in a number of different ways.

Speaker Change #117: And it's important to get the balance right.

Speaker Change #117: That investment and running the company better it kind of is the same thing

Speaker Change #117: And so that's a cultural transformation that's underway with all of our people. And so...

Speaker Change #117: We really are focused on getting value for money. You know, we spend a lot of money, we spend over $12.5 billion every year. And so we want to get the best value we can for that. And we do that in a number of different ways.

Robin Antony Vince: So some of the investments that we've made over the last couple of years, we're beginning to see the scale impact of that. And you can see that in our most profitable segments, market and wealth services, it's a mid-40s margin. We continue to invest at the margin, which is what you want to see from us. And we continue to digitize, we continue to automate, we continue to reduce manual processes, which ultimately will feed into headcount and better quality jobs for our folks and better careers.

Speaker Change #117: So, some of the investments that we've made over the last couple of years, we're beginning to see the scale impact in that, and you can see that in our most profitable segment, market and wealth services. It's a mid-40s margin. We continue to invest.

Speaker Change #117: at the margin, which is what you want to see from us.

Robin Vince: And we continue to digitize, we continue to automate, we continue to reduce manual processes, which ultimately will feed into headcount and better quality jobs for our folks and better careers. So I think over time, if organic growth plays out, it will feed into a better outcome in operating leverage, not us just growing expenses because revenues are better. And I just want to draw out one additional thing that Dermot said as well, Brian, which is, we have a lot of work to do; there's no question about it. And you know, he used the term skew and slightly optimistic but staying humble when it related to NII.

Speaker Change #117: And we continue to digitize, we continue to automate, we continue to reduce manual process, which ultimately will feed into headcount and better quality jobs for our folks and better careers. So, I think over time, if organic growth plays out,

Robin Antony Vince: So I think over time, if organic growth plays out, it will feed into a better outcome in operating leverage, not us just growing expenses because revenues are better. And I just want to draw out one additional thing that Dermot said as well, Brian, which is that we have a lot of work to do. There's no question about it. And you know, he used the term skew and was slightly optimistic but remained humble when it related to NII.

Speaker Change #118: It will feed into a better outcome in operating leverage, not us just growing expenses because revenues are better. And I just want to draw out one additional thing that Dermot said as well, Brian , which is...

Speaker Change #119: We have a lot of work to do. There's no question about it. And, you know, he used the term skew and slightly optimistic but staying humble when it related to NII. This one...

Robin Vince: This one is just about a lot of hard work and really focusing on this point about running the company better. But as a double click into the way that we're thinking about it, if you look at the second quarter, we've talked a lot about the fact that it's been a seasonally strong quarter. But if you double click into it and the market and wealth services point, the Dermot just mentioned, that's an investment story because, as we've said, we're in a good spot on the pretext margin of that segment. So we just want more. That's growth.

Dermot William McDonogh: This one is just about a lot of hard work and really focusing on this point about running the company better. But as a double click into the way that we're thinking about it, if you look at the second, If you double click into it and the market and wealth services point that Derma just mentioned, that's an investment story because, as we've said, we're in a good spot on the pre-tax margin of that segment, so we just want more. That's growth.

Speaker Change #119: [inaudible]

Speaker Change #119: it's been a seasonally strong quarter, but if you double-click into it.

Speaker Change #119: and the market and wealth services point that Dermot just mentioned. That's an investment story because, as we've said, we're in a good spot on the pre-tax margin of that segment. So we just want more. That's growth. We don't want to dilute the margin, but we're not trying to save expense dollars there.

Brian Bertram Bedell: We don't want to dilute the margin, but we're not trying to save expense dollars there. But in security services and in investments and wealth, where we said there is, in fact, a margin journey that we have ahead of us, that's where you can actually see negative expenses in both of those segments for the quarter, which is a sign of the fact that we're both investing, but we're doing even more discipline in those businesses. And so that's how the whole thing comes together for the company. Great That's great, Culler! Thank you so much.

Robin Vince: We don't want to dilute the margin, but we're not trying to save expense dollars there. But in security services and in investments and wealth, where we said there is in fact a margin journey that we have ahead of us, that's where you can actually see negative expenses in both of those segments for the quarter, which is a sign of the fact that we're both investing but we're doing even more discipline in those businesses. And so that's how the whole thing comes together for the company.

Speaker Change #119: Unknown Speaker But in security services and in investments and wealth where we said there is, in fact, a margin journey that we have ahead of us, that's where you can actually see negative expenses in both of those segments.

Speaker Change #119: Unvzwerfor the quarter which is a sign of the fact that we're both investing but we're doing even more discipline in those businesses and so that's how the whole thing comes together for the company.

Robin Vince: Great, that's great color. Thank you so much.

Speaker Change #120: Great, that's great color. Thank you so much.

Rajiv Bhatia: And our final question is coming from Rajiv Bhatia with Morningstar. Please go ahead. Yeah, there was some progress on the investment and wealth management margin in the quarter.

Rajiv K. Bhatia: And our final question is coming from Rajiv Bhatia with Morningstar. Please go ahead. Yeah, there was some progress on the investment and wealth management margin in the quarter. I guess my quick question is, are your margins different on the asset management side of the business versus the wealth management side? And do you have a timeline for getting back to that 25% plus margin? So I don't think we kind of get into the detail of the split between the two.

Speaker Change #121: And our final question is coming from Rajiv Bhatia with Morningstar. Please go ahead.

Dermot McDonogh: I guess my question is, are your margins different on the asset management side of the business versus the wealth management side, and do you have a timeline for getting back to that 25% plus margin? So I don't think we kind of get into the detail of the split between the two. And so the segment overall, I guess we've said over the last several quarters, we believe we can go back to the 25% margin over a period of a few years. And like just to follow on from Robin's answer to the last question, we've shown, I think, good expense discipline over the last 12 months in terms of, okay, revenues have been a little bit challenged in the segment due to a variety of reasons.

Rajiv K. Bhatia: Yeah, there was some progress on the investment and wealth management margin in the quarter, I guess. My quick question is, are your margins different on the asset management side of the business versus the wealth management side? And do you have a timeline for getting back to that 25% plus margin?

Speaker Change #123: So I don't think we kind of get into the detail of the split between the two and so, you know,

Dermot William McDonogh: Unknown Speaker: And so, you know, the segment overall, I guess we've said over the last several quarters, we believe we can go back to the 25% margin over a period of, you know, a few years. And just to follow on from Robin's answer to the last question, you know, we've shown, I think, good expense discipline over the last 12 months in terms of, okay, revenues have been a little bit challenged in the segment due to a variety of reasons. And we've taken tough decisions.

Speaker Change #124: The segment overall, I guess we've said over the last several quarters, we believe we can go back to the 25% margin over a period of, you know, a few years.

Speaker Change #125: and as like just to follow on from Robin's answer to the last question

Speaker Change #125: You know, we've shown, I think, good expense discipline over the last 12 months.

Speaker Change #126: In terms of, okay, revenues have been a little bit challenged in the segment due to a variety of reasons.

Dermot William McDonogh: And so that's allowed us to grow the margin by 200 basis points over the last year, which really is kind of the financial discipline about it. And we do believe where we are now with distribution as a platform, you know, very, very strong performance in fixed income and LDI and insight, that the momentum is there within the segment to grow. And, as Robin said, the addition of Jose to the leadership team, joining in September, giving his fresh perspective, gives us confidence about what we can do in the future.

Dermot McDonogh: And we've taken tough decisions. And so that's allowed us to grow the margin by 200 basis points over the last year, which really is kind of the financial discipline about. And we do believe where we are now with distribution as a platform, very, very strong performance in fixed income and LDI and in size, that the momentum is there within the segment to grow. And as Robin said, the addition of Jose to the leadership team, joining in September, giving his fresh perspective, gives us confidence about what we can do in the future.

Robin Antony Vince: Got it. Thanks. Thanks Rajiv. This concludes today's question and answer session. At this time, I will turn the conference back to Robin for additional or closing remarks. Thank you, operator, and thank you everyone for your time today. We certainly appreciate your interest in BNY. If you have any follow-up questions, please reach out to Marius and the IR team. Be well and enjoy the balance of the summer. Thank you. This concludes today's conference call and webcast. A replay of this conference call and webcast will be available on the BNY Investor Relations website at 2 p.m. Eastern Standard Time today. Have a great day!

Speaker Change #126: and we've we've we've taken

Speaker Change #131: And we do believe where we are now with distribution as a platform, you know, very, very strong performance in fixed income and LDI and insight, that the momentum is there within the segment to grow. And as Robin said,

Speaker Change #127: The addition of Jose to the leadership team joining in September , giving his fresh perspective, gives us confidence about what we can do in the future.

Rajiv Bhatia: Roger. Got it, thanks. Thanks, Rajiv.

Speaker Change #128: Got it. Thanks.

Operator: This concludes today's question and answer session.

Robin Vince: At this time, I will turn the conference back to Robin for additional or closing remarks. Thank you, operator, and thanks everyone for your time today. We certainly appreciate your interest in BNY. If you have any follow-up questions, please reach out to Marius and the IR team.

Speaker Change #129: This concludes today's question and answer session. At this time, I will turn the conference back to Robin for additional or closing remarks.

Robin Antony Vince: Thank you, Operator, and thanks, everyone, for your time today. We certainly appreciate your interest in BNY. If you have any follow-up questions, please reach out to Marius and the IR team. Be well and enjoy the balance of the summer.

Robin Vince: Be well and enjoy the balance of the summer.

Operator: Thank you.

Operator: This does conclude today's conference call and webcast. A replay of this conference call and webcast will be available on the BNY Investor Relations website at 2 PM Eastern Standard Time today.

Speaker Change #130: Thank you. This does conclude today's conference call and webcast. A replay of this conference call and webcast will be available on the BNY Investor Relations website at 2 p.m. Eastern Standard Time today. Have a great day.

Operator: Have a great day. Thank you.

Operator: Thank you very much for your time, thank you very much for your time, thank you very much for your time, thank you very much for your time, thank you very much for your time, thank you very much for your time, thank you very much for your time, thank you very much for your time, thank you very much, thank you very much.