Bank of New York Mellon Corp at UBS Financial Services Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Brennan Hawken - UBS - Analyst : Got it. Got it. When I was prepping and starting to pull together the questions for this, I was going through my model and '24 was pretty awesome. Like fee revenue growth in your business, 6%. You got to go back a decade, right? It's really, really quite good. So I'd love for you to maybe unpack a little bit about strength, primary contributors to the growth and what you plan to do to sustain momentum in the business.

Question: Brennan Hawken - UBS - Analyst : So I don't know if you know this, but my cover was true. I didn't realize that that win was so broad.

Question: Brennan Hawken - UBS - Analyst : Yes. No, no, no, that's super interesting. And you're right, they do have this prime thing, this blockchain native which a few years ago, I didn't know about, but now -- it could be interesting. Okay. AUC resilience. So I hounded Marius about this a few weeks ago. But fourth quarter, I was prepped up, you guys have a decent exposure to fixed income, right? So bag got hit in the 4Q, but yet, you guys -- your AUC was remarkably resilient. So what happened? Did you guys have some wins? Were there any notable dynamics plan through the fourth quarter?

Question: Brennan Hawken - UBS - Analyst : No, no, no, sure. The revenue side, right? Yes, Yes. I was -- of course, the revenue side too, but I was really yes, of course. It's not just based --

Question: Brennan Hawken - UBS - Analyst : So you touched on this a little bit when you're talking about WisdomTree. But I'd love to talk about ETFs and the success that you've had in ETFs. So you speak to a next-gen platform and servicing capabilities. So could you maybe walk me through what enhancements you made to the ETF offering and help us understand how big that business is and what your expectations are for going forward?

Question: Brennan Hawken - UBS - Analyst : How? I thought it was against the rules. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 6:00PM, BK.N - Bank of New York Mellon Corp at UBS Financial Services Conference

Question: Brennan Hawken - UBS - Analyst : Nice. And the SEC just rescinded one of those rules, right? Okay, which is only going to make it easier, right? So okay. Interesting. Love to touch on Alts, and actually, you touched on it a little bit before when you were talking about, I believe, the resilience and some of the tools you've developed you said that you can now help all providers actually launch products and rent outside. I'd love to hear a little more about that. But maybe before we drill into that detail, a big area of growth for BNY. I'd love to know how big it is within the servicing business, if possible. And given the kind of bespoke nature of the beast here, how do you scale the Alts efforts?

Question: Brennan Hawken - UBS - Analyst : Got it. Alts Bridge. So Alts Bridge, is that you guys put together interval funds themselves and then facilitate that, that's interesting.

Question: Brennan Hawken - UBS - Analyst : So the Alts managers don't need to have that capability at all, they just need the strategy and they can use, is that the idea?

Question: Brennan Hawken - UBS - Analyst : Sure. Interesting. And then the fee rates and the profitability of that business, how does that stack up?

Question: Brennan Hawken - UBS - Analyst : Yes, sure, sure. Okay. you guys have traditionally focused more on tools and services for GPs. You sort of referenced this before. You've talked about shifting more towards developing tools for LPs recently, right? So I'd be curious probably the market drove that in demand, but I'm curious about your perspective on that? And what are some of the tools and services that you provide for LPs? And how big is the LP business versus the GP business at this point? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 6:00PM, BK.N - Bank of New York Mellon Corp at UBS Financial Services Conference

Question: Brennan Hawken - UBS - Analyst : Got it. That's interesting. And I agree it's definitely growing. Sergio was just speaking yesterday I had a conversation with them and we're currently

Question: Brennan Hawken - UBS - Analyst : Got it. Any goals for that business? I mean, obviously, SMAs are growing really quickly, right? But how should we -- it might be too small to matter and if that's the case, fine, just what we know, but --

Question: Brennan Hawken - UBS - Analyst : Sure. Okay. Part of achieving the medium-term targets for the Security Services was to optimize platforms across the core services. Could you explain maybe what you're doing there and what impact we should expect?

Question: Brennan Hawken - UBS - Analyst : Okay. That all sounds good. We're down to the few more minutes. I'll see if there's any questions in the audience.

Question: Brennan Hawken - UBS - Analyst : Don't worry, I got -- we've been having a very low batting average with the audience questions. Don't sweat it. All right. There we go. I have to go through my motion sometimes. Platform operating model. So this became the topic of the call on the fourth quarter. And I had mine chambered. I had to change because it was like the prior two questions were on the same thing. I should forget it. So has Asset Servicing transitioned to this new platform operating model yet? And what has been your experience? And can you share maybe any metrics you noted and that would help us understand the impact of the same.

Question: Brennan Hawken - UBS - Analyst : I'm glad you keep me on time.

Question: Brennan Hawken - UBS - Analyst : Got it. Yes, that's helpful. And of course, we'll learn more about it as we go through the year, right, and you'd be transitioning people. Deposits. So you guys changed the deposit. It's now centrally managed. So I'd love to hear how significant that was. And now if you're in the servicing business, right, and you've got the relationship with the servicing client, and they want to come to you about deposit pricing and what the yields they're getting. Does that get rooted to the central team? Like how does that work?

Question: Brennan Hawken - UBS - Analyst : Got it. We only got a minute or so left. So I want to finish where we started, right? Really impressive operating leverage in 2024, you are at just a 28.8% pretax margin, right? So you basically -- we can call it 29%. What's 20 bps between -- so what's the plan to continue to drive operating leverage. Of course, what have you done for me lately? Always more high stubbing come? And how high do you think we can get that pretax margin in that business?

Question: Brennan Hawken - UBS - Analyst : It's a great point to end on. Emily, thanks a lot for your time today.