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Bank of New York Mellon sets 3-5 year targets for profit growth

Jan 13, 2024 - americanbanker.com
Bank of New York Mellon is predicting a 10% decline in net interest revenue in 2024, but expects to offset this with higher fee revenue and controlled expenses. The bank's CEO, Robin Vince, is confident in the company's ability to improve its financial performance over the next three to five years, despite a 45% drop in net income in the fourth quarter of the previous year due to a special assessment by the Federal Deposit Insurance Corp.

The bank is also focusing on harnessing artificial intelligence to boost its financial performance in the medium term. It has already set up an AI Hub and has a software that is creating predictions for clients in its treasuries business. The AI is also being used to make the bank's operations more efficient, particularly in the research team.

Key takeaways:

  • Bank of New York Mellon is forecasting a 10% decline in net interest revenue in 2024, but expects to benefit from higher fee revenue and maintain expenses.
  • The bank reported a net income of $300 million in the fourth quarter, a 45% decrease from the same period the previous year, due to a special assessment by the Federal Deposit Insurance Corp.
  • BNY Mellon is focusing on a multi-year transformation to improve its financial performance, with a target to achieve a return on tangible common equity of at least 23% in the next three to five years.
  • The bank is also looking to harness artificial intelligence to improve its operations and financial performance, having set up an AI Hub to develop capabilities.
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