The Bank of New York Mellon Corporation (NYSE:BK) Q4 2019 Earnings Conference Call - Final Transcript

Jan 16, 2020 • 08:00 am ET


The Bank of New York Mellon Corporation (NYSE:BK) Q4 2019 Earnings Conference Call - Final Transcript


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Q & A

Thank you. [Operator Instructions] Our first question comes from the line of Brian Bedell with Deutsche Bank. Please go ahead.

Brian Bedell

Great. Thanks. Good morning, guys. Just -- maybe just back on the expenses real quick. If you -- I didn't see it in the press release the bifurcation between severance and litigation in the fourth quarter. And then as we think about the expense trajectory into 2020 and even 2021, can you just talk about the investments in technology and how you'd expect that to reduce the structural cost base over the next couple of years?

Mike Santomassimo

Yeah. Hey Brian, it's Mike. So on the first piece, we didn't disclose the exact number in the split between the two. I think you can get a pretty good sense of the magnitude of the severance by looking at the staff expense and the difference versus the third quarter. So that will probably give you a good sense of the magnitude there. The bigger piece by far was severance in the number.

Yeah, as you just sort of think about overall expenses, as both Tom and I mentioned, we would expect to invest even more this year than we did in 2019 and really it's across a range of items, both continuing to build out the infrastructure that is important for operating our businesses. We're building new capabilities and you're seeing some of those get announced and released even over the last couple of weeks. And then there's a large chunk of it's going into sort of the efficiency agenda on the cost side as you sort of suggested there.

And I think working with Lester Owens, our Head of Operations, we've got a very long list of those programs that we're just clicking down the list and executing. And as you can imagine, the benefits of those continue to come in the P&L over a period of time. So, we'll get some of them in 2020 and we'll get some of them as we sort of exit 2020 into 2021. And I'll just sort of reinforce what Todd said in his remarks. You can see the benefits of those investments in efficiency agenda coming through the P&L already as we sort of increased the technology spend significantly in 2019 and overall expenses are down and that's a result of that focus.

Okay. That's helpful. Thanks. And then on clearing -- just on the actual clearing service fee of $421 million. Just given where the markets have moved [Indecipherable] and the online brokerage industry at least has been pretty strong. If you want to just -- I would have expected that line to be a little bit stronger in the fourth quarter on a sequential basis. So, if there's anything that you can call out what maybe depressed that? And then maybe longer term, you talked about within Pershing and your RA strategy, maybe what are your expectations of potentially picking up market share given the industry consolidation that's upon us here?

Thomas P. Gibbons

Okay. [Speech