The bank of the new york mellon -
How Bank of New York Mellon Makes Money
Founded in 2007, Bank of New York Mellon (BK) is the culmination of a merger of two of America’s most venerable banks. The Bank of New York was founded in 1784, Mellon Financial in 1869. The former was primarily a short-term business lender, the latter a wealth management firm. The resultant firm services more assets than any company on Earth, a total of $41.1 trillion under custody as of Dec. 31, 2020.
With $2.2 trillion of assets under management, Bank of New York Mellon is one of the largest asset managers in the world. The company primarily generates revenue through investment services, including asset and issuer servicing, treasury services, clearance and collateral management, and asset and wealth management.
- Bank of New York Mellon generates revenue through investment services, as well as wealth and asset management.
- The bank had $41.1 trillion in assets under custody as of the end of 2020.
- BNY Mellon operates in 35 countries around the world.
Bank of New York Mellon's Earnings
Throughout Bank of New York Mellon’s brief existence in its current form, earnings have been uncommonly consistent. While reported revenue of $15.8 billion was down 4% in 2020 compared to 2019, management explained this was the result of the sale of an equity investment in 2019 and the impact of lower interest rates.
Over the previous five years, in reverse chronological order, the firm earned revenue of $16.5 billion (2019), $16.4 billion (2018), $15.5 billion, $15.2 billion, and $15.2 billion. According to the bank's most recent annual report, net income for 2020 was approximately $3.6 billion. As of Dec. 31, 2020, the pre-tax operating margin was 30%.
BNY Mellon was established (as Bank of New York) in 1784 by Alexander Hamilton and later became the first company to be listed on the New York Stock Exchange.
Bank of New York Mellon Business Model
True to the history of its predecessors, Bank of New York Mellon has two distinct business reporting segments: investment management and investment services. This can be confusing; the former falls under one subsidiary, named The Bank of New York Mellon. Meanwhile, the company’s wealth management business falls under a subsidiary named BNY Mellon.
Smaller subsidiaries, most of them concentrating on trusts, include BNY Mellon Investment Servicing Trust Company, BNY Mellon Trust Company of Illinois, BNY Mellon Trust of Delaware, and The Bank of New York Mellon Trust Company.
Bank of New York Mellon's subsidiaries include the firm’s main European operation, The Bank of New York Mellon SA/NV. The company has dozens of subsidiaries in total, with the largest majority of them incorporated either in the United States or the British Isles. (The outliers are based in Belgium and Luxembourg.) All told, Bank of New York Mellon operates in roughly three dozen countries.
Bank of New York Mellon's Investment Services Business
Of Bank of New York Mellon’s two major businesses, Investment Services is the biggest, accounting for about 71.9% of the company’s noninterest expense. This division provides a variety of business and technology services to financial institutions, corporations, endowments, and public agencies. Within the Investment Services division, Bank of New York Mellon has a variety of lines of business, including Asset Servicing, Pershing (providing clearing, custody, and other business services), Issuer Services, Treasury Services, and Clearance and Collateral Management.
If you happen to be the executive tasked with figuring out what to do with your large company’s cash pile, chances are good that you’re going to contact Bank of New York Mellon at some point. The firm does business with approximately 400 of its counterparts on the Fortune 500 list, along with three-quarters of America’s 100 largest foundations and two-thirds of its 1,000 largest pension funds. Hence, the enormous amount of money under the Bank of New York Mellon’s administration.
The Bank of New York and Mellon Financial Corporation merged in July of 2007, resulting in the bank's current form and name.
Bank of New York Mellon's Investment Management Business
While Bank of New York Mellon indeed deals in the exclusive province of wealth beyond most people’s comprehension, that’s not the firm’s specialty. Rather, hundreds of thousands of middle-class people rely on Bank of New York Mellon’s investment services expertise to keep their retirement plans solvent and their stock investments promising.
The investment management segment includes estate planning and private banking for extremely rich people. This, again, is small compared to the investment services Bank of New York Mellon sells to the managers of large capital reserves. The indirect beneficiaries of those investment services—ordinary employees and retirees—have a far greater impact on Bank of New York Mellon’s fortunes than do the firm’s necessarily fewer wealthy clients.
The remainder of the firm’s investment management operations include global equities, currency management, and fixed income strategies. Bank of New York Mellon’s investment management is conducted through many (relatively) small and independently marketed subsidiaries, such as Alcentra, Siguler Guff, and more, the majority of which were bought by Bank of New York Mellon (or one of its predecessors) rather than being created in-house. The firm’s acquisitiveness hasn’t subsided, either; it continues to buy up smaller "boutique" houses periodically.
As of the end of 2020, the Investment Management division, consisting of both Investment Management and Wealth Management lines of business, held assets under management of $2.2 trillion.
According to its 2020 annual report, the Bank of New York Mellon is focused on worldwide social justice movements given the global impact of the COVID-19 pandemic. The company plans on using its resources and market influence to address environmental, social, and governance (ESG) issues.
In 2020, the company issued three new enterprise ESGs with associated goals and key performance indicators (KPIs). The company has established new programs related to ESG financing, along with helping clients manage ESG risks and opportunities.
Risk is an inherent part of investing and Bank of New York Mellon must adequately manage its own risk factors, as well as those of its clients. Beyond the basic unpredictability of investments, however, there are also other challenges that BNY Mellon faces. These include competition from a small but powerful group of similarly-equipped financial institutions around the world, each of which is competing for the same clients and asset pool.
Given the bank's high volume of daily transactions, it is susceptible to operational risk caused by a breakdown in the system or in information. There are also constant governmental and regulatory challenges to which the company must adapt.
Bank of New York Mellon
The Bank of New York Mellon Corporation is a global financial services company focused on helping clients manage and service their financial assets. We operate in 34 countries and serving more than 100 markets. The company is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team.
We have $20.7 trillion in assets under custody and administration, $926 billion in assets under management, service $11.8 trillion in outstanding debt and process global payments averaging $1.8 trillion per day.
For Institutions and Corporations
We help organizations build assets, enhance performance, improve operating efficiency and reduce risk through a wide range of asset management and securities services solutions.
For Private Clients
For individuals, we offer sophisticated financial solutions, including investment and wealth management, private banking and shareowner services.
For Consultants and Advisors
We work closely with consultants and advisors to help them select and present the services that best meet the needs of the clients they serve.
The Bank of New York Mellon is dedicated to acting with the highest standards of integrity and openness, based on a rich shared heritage of trust and reliability.
Ian Hards, Managing Director, European Fund Services
0207 964 6549
Maddox v. Bank of New York Mellon Trust Co., No. 19-1774 (2d Cir. 2021)
The Second Circuit affirmed the district court's order denying the Bank's motion for judgment on the pleadings. The court held that state legislatures may create legally protected interests whose violation supports Article III standing, subject to certain federal limitations. The court also decided that the New York law violations alleged here constitute a concrete and particularized harm to plaintiffs in the form of both reputational injury and limitations in borrowing capacity over the nearly ten-month period during which their mortgage discharge was unlawfully not recorded and in which the Bank allowed the public record to reflect, falsely, that plaintiffs had an outstanding debt of over $50,000.
The court further concluded that the Bank's failure to record plaintiffs' mortgage discharge created a material risk of concrete and particularized harm to plaintiffs by providing a basis for an unfavorable credit rating and reduced borrowing capacity. The court explained that these risks and interests, in addition to that of clouded title, which an ordinary mortgagor would have suffered (but plaintiffs did not), are similar to those protected by traditional actions at law. Therefore, plaintiffs have Article III standing and they may pursue their claims for the statutory penalties imposed by the New York Legislature, as well as other relief. Accordingly, the court affirmed and remanded.
Sector Investment Advisors
Sales or Revenue 16.80 B
Industry Financial Services
1Y Sales Change -19.09%
Fiscal Year Ends December 31 Download Reports
The Bank of New York Mellon Corp. is a bank holding company, which engages in the provision of financial services. It operates through the following segments: Investment Services and Investment and Wealth Management. The Investment Services and Investment segment includes institutional trust and custody fees, broker-dealer services, corporate trust, depositary receipts, and foreign exchange. The Wealth Management segment provides services to institutional and retail investors, as well as investment management, wealth and estate planning. The company was founded by Alexander Hamilton on June 9, 1784 and is headquartered in New York, NY.
Board of Directors
|Name/Title||Current Board Membership|
Past Five Years Ending 12/31/2020 (Fiscal Year)
|Revenue+1.58%||Net Income+0.66%||Earnings Per Share+4.34%|
|Capital Spending+9.62%||Gross Margin -||Cash Flow-4.55%|
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The Bank of New York Mellon Corporation (BNY Mellon) is a global financial services company. The Company’s two principal banks are The Bank of New York Mellon, which houses its institutional businesses, including Asset Servicing, Issuer Services, Treasury Services, Broker-Dealer and Advisor Services and the bank-advised business of Asset Management, and BNY Mellon, National Association (BNY Mellon, N.A.), a nationally chartered bank, which houses its Wealth Management business.
- Main Telephone
- (212) 495-1784
225 Liberty Street
New York, NY10286
|The Bank of New York Mellon Corporation||*|
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