Bank of New York Mellon Corp

NYSE:BK

Earnings Call Analysis

BNY Mellon Reports Strong Revenue Growth and Positive Outlook for Shareholders

In the third quarter, BNY Mellon showcased impressive performance, with earnings per share rising 22% year-over-year to $1.50, and total revenue of $4.6 billion, a 5% increase. The asset management segment flourished, with assets under management up 18% to $2.1 trillion, reflecting strong market conditions. The firm expects to return over 100% of 2024 earnings through dividends and buybacks, maintaining a robust capital structure. Notably, the integration of Archer is anticipated to enhance various business lines and client services. Overall, BNY Mellon is positioned well, navigating market challenges while focusing on delivering substantial value to shareholders.

Continued Strong Financial Performance

In the third quarter of 2024, BNY reported a strong performance with earnings per share (EPS) rising to $1.50, a 22% increase year-over-year, and $1.52 excluding notable items, representing a 20% bump. Total revenue reached $4.6 billion, marking a 5% year-over-year increase. The company maintained reported expenses at $3.1 billion, which remained flat, demonstrating effective cost control amid significant investment in talent and technology.

Positive Market Outlook and Strategic Positioning

Macro market trends have shown a recovery post-volatile early August conditions. The company noted an easing cycle taking shape globally, evidenced by recent reductions in U.S. policy rates. With assets under management hitting $2.1 trillion (up 18% from the previous year), BNY benefits significantly from improved market conditions, solidifying its position in the financial services landscape.

Dividends and Shareholder Returns

BNY remains committed to returning capital to shareholders, having returned 103% of earnings year-to-date through dividends and share buybacks. The firm is on track to return over 100% of 2024 earnings via similar mechanisms, reflecting a robust capital allocation strategy even in changing market conditions.

Segment-Specific Growth Insights

Each of BNY's three business segments demonstrated growth. Security Services saw revenue of $2.2 billion, up 6% year-over-year, benefitting from increased market volumes. In the Markets & Wealth Services sector, total revenue reached $1.5 billion, with an increase of 7% year-over-year amidst strong client demand. The Investment and Wealth Management segment reported revenues of $849 million, up 2%, showcasing resilience despite headwinds in performance fees.

Guidance and Future Expectations

Looking ahead, BNY anticipates net interest income for the fourth quarter to be slightly below recent results. However, they remain optimistic about outperforming their initial growth projections by approximately 5 percentage points due to strong underlying trends. The firm expects to maintain flat core expenses for 2024, showcasing rigorous expense management while continuing to invest in essential growth initiatives.

Acquisition Strategy and Enhanced Capabilities

The planned acquisition of Archer, a technology-enabled service provider, will enhance BNY's managed account solutions and positions the firm for future scalability. This acquisition is expected to close by year-end and aims to bolster BNY's capabilities across various service lines, indicating a commitment to expanding the firm's innovative service offerings strategically.

Structural Changes and Operational Efficiency

BNY is transitioning towards a platform operating model, with approximately 13,000 employees already integrated into this new framework. This strategic shift is designed to drive efficiency and revenue growth through improved client service and operational effectiveness, which are expected to bear fruit over the next few years.

Investment in Technology and AI

Investments in technology, particularly in artificial intelligence, remain a priority for BNY. The executives expressed confidence in leveraging AI to enhance both revenue opportunities and operational efficiencies, highlighting the importance of innovation in maintaining a competitive edge.

Conclusion: BNY's Resilience and Future Growth

Overall, BNY's strong quarterly results and strategic initiatives reflect a resilient business model poised for future growth. Positive operating leverage, continued investment in key areas, and a robust capital return strategy position the firm favorably amidst an evolving financial landscape.

Earnings Call Transcript 2024-Q3

[Operator]

Good morning, and welcome to the 2024 Third Quarter Earnings Conference Call hosted by BNY. [Operator Instructions] 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.

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

[Marius Merz, executive]

Thank you, operator. Good morning, everyone, and welcome to our third quarter earnings call. I'm joined by Robin Vince, our President and Chief Executive Officer; and Dermot McDonogh, our Chief Financial Officer. As usual, we will reference our financial highlights presentation, which can be found on the Investor Relations page of our website at eny.com. I also 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.

Forward-looking statements made on this call speak only as of today, October 11, 2024, and will not be updated. With that, I will turn it over to Robin.

[Robin Vince, executive]

Thanks, Marius. Good morning, everyone. Thank you for joining us. I'll start with a few remarks on the quarter, and then Dermot will take you through the financials in greater detail. In short, BNY reported strong third quarter results, reflecting growth across our 3 business segments and consistent execution on our strategic priorities.

Stepping back on the macro side for a moment. At the beginning of the year, markets have priced in significant monetary policy easing in anticipation of economic slowdowns. Despite numerous shifts in the macroeconomic outlook since then, we've now seen the start of the easing cycle in several markets around the world, including a 50-basis-point reduction in policy rates in the U.S. as the Federal Reserve recalibrates its policy stance to balance employment, inflation and growth. Following increased market volatility and a sell-off in equities in early August, markets recovered and both equity and fixed income values ended the quarter higher.

A little more micro, but relevant for markets. Around the most recent quarter end, the market saw simultaneous flows into the Fed's reverse repo facility, alongside the first meaningful usage of the standing repo facility, both of which we administer. At the same time, sponsored cleared repo volumes increased on the back of higher repo rates, possibly signaling a transition from abundant to ample reserves in the system, with potential implication for the pace of QT going forward.

More broadly, while markets have been constructive, there are clearly risks and uncertainties ahead, and so we constantly prepare and position for the many tail risks that exist from geopolitical tensions and conflicts to fiscal deficits and the impact of impending regulations and elections.

Now referring to Page 2 of the financial highlights presentation. As I said earlier, BNY delivered a strong financial performance in the third quarter with strong EPS growth on the back of broad-based revenue growth and positive operating leverage. Reported earnings per share of $1.50 were up 22% year-over-year. And excluding notable items, earnings per share of $1.52 were up 20%.

Total revenue of $4.6 billion increased by 5% year-over-year, and reported expenses of $3.1 billion were flat. Excluding the impact of notable items, expenses were up 1% year-over-year as we continue to invest in our people and technology while we also generate greater efficiencies from running our company in new and better ways.

Pretax margin and return on tangible common equity improved year-over-year to 33% and 23%, respectively. For the first time in our history, we reported over $50 trillion of assets under custody and/or administration at the end of the quarter. our custody is not something we are, but it is something important that we do. This #1 market position improves our unique vantage point as a global financial services company, and it provides opportunity to drive value across our portfolio of adjacent businesses to deliver more of BNY to our clients.

We increasingly see that the true power of BNY's client franchise exists in the combination of capabilities across our leading Security Services, Market and Wealth Services and Investments and Wealth businesses. We have the ability to enhance this and to deliver more to our clients by bringing new innovative solutions to the market from across the scenes of these businesses. As an example, we recently announced the planned acquisition of Archer, a leading technology-enabled service provider of managed account solutions to the Asset and Wealth management industry. Archer provides comprehensive technology and operational solutions that allow asset and wealth managers to access one of the fastest-growing investment vehicles in the industry, managed accounts, at scale, expanding distribution, streamlining operations, launching new investment products and delivering personalized outcomes for their clients. The integration of Archer should produce a positive impact across several of our lines of business.

In addition to augmenting our asset servicing capabilities for managed accounts Archer will provide our Investments business as well as our wealth adviser platform in Pershing with expanded distribution of model portfolios and access to Arch's multi-custodial network. Buy it once, use it many, if you will.

The transaction is expected to close before the end of the year, and we look forward to welcoming the Archer team to BNY.

Another one of the fastest-growing areas in financial services alternatives also presents a promising opportunity for us to deliver new client solutions across 1BNY. We already have relationships with hundreds of alternatives managers as well as roughly $3 trillion of wealth assets on our platforms. We believe there is more for us to do to mine the opportunity and build the technology to reach across our franchise and unlock the fast-growing alternatives market for wealth intermediaries, advisers and the investors they serve. Last month, we introduced Alts Bridge, a comprehensive data, software and services solution built for wealth advisers. Alts Bridge aims to make investing in alternatives easier for advisers through a streamlined end-to-end experience and direct integration into advisers' existing desktops, starting with our Pershing NetX360 and Wove platforms.

As we continue to deliver new, innovative products, we are also addressing the significant opportunity from enhancing our commercial model, making it easier for clients to navigate BNY. In order to accomplish this, we are promoting an enterprise approach to client coverage, and we are operationalizing our new commercial model. For example, over the summer, and for the first time in recent memory, we brought together several hundred of BNY's client-facing commercial leaders from around the world as well as members of our executive committee for a 2-day event we called Commercial Lift Off. This program enabled our top client coverage people and their business partners to take a 1BNY view to account planning, creating a shared vision for serving each of our clients holistically across the entire relationship, generating new ideas to meet the clients' objectives and developing action-oriented plans to deliver on those goals.

During the quarter, we also made progress toward running our company better, including the ongoing transition to a platform's operating model, enhancing the connectivity across our teams and empowering our people to drive change across the company. In September, we went live with the next step on our multiyear plan to unite related capabilities around BNY and elevate our execution by doing things in one place and doing them well. We now have about 13,000, or about 1/4 of our people working in our new operating model.

As we've said before, powering our 1BNY culture in order to be more for our clients and run our company better requires not just words, but action. I want to thank our people around the world for their hard work and for collectively pulling together as a team to create the change for our clients, for our shareholders and for one another.

To wrap up, the combination of our talented team, our portfolio of leading businesses working together and the strength of our balance sheet gives us a great foundation to deliver more to our clients and drive sustainable long-term shareholder value. While our results in the third quarter demonstrate continued execution against our strategic priorities as well as progress towards our medium-term financial targets, our team remains focused on the work ahead. With that, over to you, Dermot.

[Dermot McDonogh, executive]

Thank you, Robin, and good morning, everyone. Starting on Page 3 of the presentation, I'll begin with our consolidated financial results for the quarter. Total revenue of $4.6 billion was up 5% year-over-year. Fee revenue was up 5%. This includes 5% growth in Investment Services fees, reflecting higher market values and net new business across our Security Services and Market and Wealth Services segments. Investment management and performance fees from our Investment and Wealth Management segment were up 2%, driven by higher market values, partially offset by the mix of AUM flows and lower performance fees.

Firmwide AUCA of $52.1 trillion were up 14% year-over-year reflecting higher market values, net new business and client inflows. Assets under management of $2.1 trillion were up 18% year-over-year, primarily reflecting higher market values and the favorable impact of a weaker dollar.

Foreign exchange revenue increased by 14%, driven by higher volumes. Investment and other revenue was $196 million in the quarter, reflecting continued strength in fixed income and equity trading. The year-over-year increase primarily reflects a strategic equity investment loss recorded in the third quarter of last year, and improved results from our seed capital investments.

Net interest income increased by 3% year-over-year, primarily reflecting improved investment securities portfolio yields and balance sheet growth, partially offset by changes in deposit mix.

Expenses of $3.1 billion were flat year-over-year on a reported basis, and up 1% excluding notable items. This reflects higher investments in employee merit increases, partially offset by efficiency savings.

Provision for credit losses was $23 million in the quarter, primarily reflecting reserve builds related to commercial real estate exposure.

As Robin mentioned earlier, we reported earnings per share of $1.50, up 22% year-over-year. And excluding notable items, earnings per share were $1.52, up 20% year-over-year. Pretax margin was 33%, and return on tangible common equity was 23%.

Turning to capital and liquidity on Page 4. Our Tier 1 leverage ratio for the quarter was 6%. Tier 1 capital increased by 4% sequentially, primarily reflecting capital generated through earnings and improvement in accumulation of other comprehensive income, partially offset by catered for our shareholders through common stock purchases and through dividends. Average assets increased by 1%. Our CET1 ratio at the end of the quarter was 11.9%. The CET1 capital increased by 5%, and risk-weighted assets increased by [ 1% ]. We returned $1.1 billion of capital to our shareholders over the course of the third quarter. Year-to-date, we returned 103% of earnings through dividends and buybacks.

Moving to liquidity. The consolidated liquidity coverage ratio was 116%, a 1 percentage point increase sequentially due to a favorable change in our deposit composition. And the consolidated net stable funding ratio was 132%, unchanged sequentially.

Next, net interest income and the underlying balance sheet trends on Page 5. Net interest income of over $1 billion was up [ 3% ] year-over-year and up 2% quarter-over-quarter, [indiscernible] increase was helped by higher sponsored clear repo activity [indiscernible] market volatility and increased client demand. Average deposit balances remained flat sequentially. Noninterest-bearing deposits decreased by 2% in the quarter and interest-bearing deposits were flat. Average interest earning assets were up 4% quarter-over-quarter. Our investment securities portfolio balances as well as loan balances increased by 1%, and cash and reverse repo balances remained flat.

Our broader liquidity ecosystem reached an all-time high at the end of the quarter of over $1.5 trillion worth of client cash across deposits, money market funds, securities lending, sponsor cleared repo and other short-term investment alternatives.

Turning to our business segments, starting on Page 6. Security Services reported total revenue of $2.2 billion, up 6% year-over-year. Total investment services fees were up 4% year-over-year. In Asset Servicing, investment services fees grew by 5%, primarily reflecting higher market values. For the third quarter in a row, the impact of repricing was de minimis.

ETF AUCA of $2.7 trillion was up more than 70% year-on-year, and the number of funds serviced was up 20% year-on-year. Inflows into ETFs on our platform remained strong this quarter with growth across all asset classes. As the ETF industry continues to grow, we are dedicated to scaling our best-in-class ETF service offering. For example, we have successfully onboarded several new liquidity providers to our electronic order execution platform to advance digital adoption.

In Issuer Services, Investment Services fees were up 1%. Net new business and higher client activity in Corporate Trust was partially offset by lower deposit receipt fees, reflecting corporate actions in the prior year. Against the backdrop of increased issuance activity, we continue to see strength in Corporate Trust, capitalizing on our investments in people and technology to enhance client service and scalability. In this segment, foreign exchange revenue was up 28% year-over-year, reflecting growth from newly onboarded clients as well as a higher level of client activity.

Net interest income for the segment was up 2% year-over-year. Segment expenses of $1.6 billion were down 3% year-over-year, reflecting efficiency savings and lower severance expenses, partially offset by higher investments and employee merit increases. Pretax income was $642 million, a 38% increase year-over-year, and pretax margin was 29%.

And Next, Markets & Wealth Services on Page 7. Markets & Wealth Services reported total revenue of $1.5 billion, up 7% year-over-year. Total Investment Services fees were up 7% year-over-year. In Pershing, investment services fees were down 1%, reflecting the impact of lost business in the prior year, partially offset by higher market values. Net new assets were negative $22 billion for the quarter, reflecting the ongoing deconversion of lost business in the prior year, which is now largely behind us. Excluding the deconversion, we saw approximately 4% annualized net new asset growth in the third quarter.

Wove continues to see strong client demand. We signed up 14 additional clients in the third quarter, and we remain on track for the $30 million to $40 million of revenue in 2024 as we guided in January. Wove is helping us attract new clients and deepen relationships with existing ones. For example, Pershing provides custody and clearing solutions for Sanctuary, a large and fast-growing wealth manager servicing the high net worth and ultra high net worth segments. Sanctuary will also leverage Wove portfolio solutions, trading and rebalancing and reporting for teams that custody with Pershing as well as those that use in other custodian.

In Clearance and Collateral Management, Investment Services fees increased by 16%, primarily reflecting higher collateral management fees and higher clearance volumes. Against the backdrop of a growing market and active trading, U.S. securities clearance and settlement volumes have remained strong. As you may remember, we created our global clearing platform earlier this year through the realignment of Pershing institutional solutions. We're pleased to see the pipeline of this platform continue to build for our full suite of institutional clearing, settlement, execution and financing solutions in over 100 markets around the world.

In Treasury Services, Investment Services fees were up 11% and primarily reflecting net new business. The business continues to execute well against the growth agenda we presented in January. And we are seeing our investments in modernizing and digitizing our payments platform pay off in the form of growth in our strategic target markets. Net interest income for the segment overall was up 3% year-over-year. Segment expenses of $834 million were up 5% year-over-year, reflecting higher investments and employee merit increases, partially offset by efficiency savings. Pretax income was up 8% year-over-year at $704 million, representing a 46% pretax margin.

Turning to Investment and Wealth Management on Page 8. Investment and Wealth Management reported total revenue of $849 million, up 2% year-over-year. In our Investment Management business, revenue was up 1%, reflecting higher market values and improved seed capital results, partially offset by lower performance fees and the mix of AUM flows. And in Wealth Management, revenue increased by 6% and reflecting higher market values and net interest income, partially offset by changes in product mix. Segment expenses of $672 million were flat year-over-year as efficiency savings offset employee merit increases and higher investments.

Pretax income was $176 million, up 7% year-over-year, and pretax margin was 21%. As I mentioned earlier, assets under management of $2.1 trillion increased by 18% year-over-year, primarily reflecting higher market values and the favorable impact of the weaker dollar. In the third quarter, we saw strength in our short-term strategies with $24 billion of net inflows into cash, reflecting our leading position and strong investment performance in our Dreyfus money market funds.

Long-term active strategies saw $8 billion of net outflows spread across multi-asset, LDI and active equity, partially offset by net inflows into fixed income. And we saw $16 billion of net outflows from index strategies. Wealth Management client assets of $333 billion increased by 14% year-over-year, reflecting higher market values and cumulative net inflows.

Page 9 shows the results of the Other segment.

Before I wrap up, a couple of comments on the outlook for the year, starting with net interest income. Remember, we began the year setting up for positive operating leverage despite an expectation for full year net interest income to be down 10% in 2024. While we're currently forecasting for fourth quarter net interest income to be slightly below what we saw in our strong third quarter results, the resilience of our net interest income over the first 9 months of the year has positioned us to outperform our outlook for the full year net interest income growth rate from January by approximately 5 percentage points.

Regarding expenses, we continue to work hard to keep core expenses, excluding notable items for the full year 2024 roughly flat. We now expect our effective tax rate for the full year 2024 to be at the lower end of the 23% to 24% range we estimated in January. And lastly, as we said at the beginning of the year, we expect to return 100% or more of 2024 earnings to our shareholders through dividends and buybacks. And we remain on track, having returned 103% of earnings year-to-date.

In conclusion, our results this past quarter reflects broad-based growth across our 3 business segments and continued progress on our strategic priorities. We're pleased with the company's performance year-to-date, and we're proud of our people who continue to execute well toward our medium-term financial targets, while we all remain focused on the work and the tremendous opportunity ahead of us. With that, operator, can you please open the line for Q&A.

[Operator]

[Operator Instructions] We'll take our first question from Brennan Hawken with UBS.

[Brennan Hawken, analyst]

You flagged some of the ETF wins that you had on the servicing side. So curious about that. #1, how much of that was the BlackRock business business that you've won? And has the revenue from that when that they win fully turned on? And did those dynamics have something -- or like is the fee rate lower because fees in Asset Servicing were up about 5%, but AUC 16%, and I know sometimes the ETF fee rates are a little lower. So curious to flesh that out a bit.

[Dermot McDonogh, executive]

So thanks for the question. I don't really want to get into the specifics on 1 client or transaction, but just to take a step back on ETFs generally it is a growing market. You may have watched Larry from BlackRock on CNBC this morning. It is a secular trend. It is a very big and growing market, and we are a key player in that. As I said in my prepared remarks, we have $2.7 trillion on the platform. That's up 70% year-on-year, and the number of funds serviced is up 20%. That's on the back of strong leadership and a real investment in technology, so we can be best-in-class. So without going into specifics, we're there to take advantage of the secular trend, and we'll continue to innovate and solve for our clients' needs.

[Brennan Hawken, analyst]

Okay. Maybe if I could word it a little differently. The strong ETF growth that you have seen this quarter, is the revenue fully reflected this quarter? Or is some of those wins still have some revenue ramp to come?

[Dermot McDonogh, executive]

I would say it's the latter. It's generally speaking, strong pipeline. We're always adding new clients to the platform. And they -- because of the size of what's been onboarded, they tend to do it in a phased approach. So some revenue is on the platform, some revenue to come.

[Brennan Hawken, analyst]

Excellent. Thank you also for the update on NII, encouraging to see things working better. Could you speak to the deposit beta that you experienced with the first rate cut? And given that we're seeing rates coming down now, is it reasonable to think that deposits could begin to grow from here?

[Dermot McDonogh, executive]

So the basis, I think we've said on previous calls, we view it as isometric. So for us, the first rate cost was 100% passed on. So we feel pretty good about that. I think in terms of where we are in the Fed easing cycle. I think it's probably a little bit too early to see how that's going to feed into the deposit balance story. I think overall, we've kind of -- we've held in there. We had a strong Q3 for a variety of different reasons. So I would say I expect where we are to moderate a little bit on balances and we'll see what happens next with the next Fed meeting but no significant change for us as we kind of sit here right here today.

[Operator]

[Operator Instructions] We'll move to our next question from Mike Mayo with Wells Fargo.

[Michael Mayo, analyst]

That's a bet the $50 trillion of AUC, a nice round number. you did be factual that you beat expectations for the quarter and the year so far as you highlighted. I'm just trying to figure out how much of this is lucky versus being smart? And I imagine it's a bit of both, but the lucky part is record stock market volatility, trading, some other factors in the market that have gone your way. And I don't feel like we have enough information on your client growth, the underlying client growth, the most repeatable part of the company. So could you give us some color on whether it's growth in clients or maybe it's revenues per client or maybe it's products per client or all those adjacent businesses that you talk about, how you're managing the company better versus simply a better environment to operate in?

[Robin Vince, executive]

Sure, Mike. It's Robin. I understand the question, and it's obviously a very legit question. We broke through the [ 50 ]. By the way, we ended at [ 52 ]. So the good news is we didn't stop at the round number. I'd say that it isn't just fashionable, it's actually old-fashioned, traditional, just the way that we want to do it in terms of being able to have this deliberate growth and this focus. And so we've tried to provide as much visibility as we reasonably can into the inputs of what it is that's ultimately driving this progress because we understand we have benefited from a terrific backdrop in terms of markets. And of course, it's part of our business. to be able to be well positioned to take advantage of those backdrops. We've got parts of our business which respond to asset values. We've got parts of our business that respond to the number of accounts. We've got parts of our business that responds to software sales, transaction volumes. And having that multifaceted set of business response functions, if you want to call it, that is actually a deliberate strategy so that we can participate in the growth of markets.

And so if you believe that overall debt issued in the world, equity valuations in the world, financial market activities are going to grow, we're trying to hitch our wagon to all of those growth trends. We think that's good. Having said that, to the heart of your question, this is the work that we've really done in the early days since this management team took over, which was to understand the components that we had and to really start to understand how they could work together, so how they could hum together in order to be able to unlock more potential. And so we rallied to the firm around 3 strategic pillars, this thing of being more for our clients. And that's not just words. It's been about [indiscernible] coming to us because we can do more than 1 thing for them. And it's not just that we're selling more things to them. It's that they actually want to take advantage of bundles of things, which actually provide a better solution to their business.

And then our second pillar of running the company better, that's been about sales rhythms and sales targets and bringing our people together and having them understand what it is trying to do. And then wrapping the whole thing is this culture of wanting to have a winning culture, wanting to push forward, wanting to make BNY of the future, more than BNY Mellon was of the past. And those things are all quite deliberate, and we start -- and we believe that we're starting to see the results of that, although it's still early in our results. But Dermot can give you a couple of additional things on this, which I think also would be helpful.

[Dermot McDonogh, executive]

So Mike, the way I -- from just thinking about it from a numbers perspective is we're up 5% year-on-year in fee growth and constructive markets. And so we've been able to take advantage of constructive markets, but a couple of important points that I would draw out is that in all 3 of our business segments, we've seen solid underlying growth. And in Robin's prepared remarks, he talked about the fact that we're evolving into a platform company. And when we have platforms that we're investing in at scale, so when you have high volume and you have constructive markets, we have the platforms in situ that can take advantage of that.

Asset Servicing, we're winning and onboarding new business. We came into the year with a backlog, we onboarded the business throughout the year, and we're beginning to go into the Q4 with a bigger backlog than we came into at the beginning of the year. So Asset Servicing, I feel very proud of. Corporate Trust depository receipts, Corporate Trust specifically a good margin business, but something that has been devoid of investment over a number of years, and we've put money to work there in terms of leadership and scaling our technology, and that's going to be a business -- an important business for us in the future. And Treasury and Services and Clearance and Collateral Management have really kind of shown what when you have a scale platform with high volume, strong markets, lots of issuance, lots of payments, you take advantage of that. And then on just the client-specific thing, albeit it's a small base and we can -- we've highlighted a couple of transactions this year where we're able to have a much more sophisticated conversation with clients, and clients are now buying from us across more than 1 line of business, in some cases, 4 lines of business.

That was something that we just could not do a couple of years ago. And Robin's point about bringing the 1BNY to bear on clients is really beginning to pay dividends.

[Michael Mayo, analyst]

All right. Well, that was very comprehensive. Just last follow-up. Are you implying -- and by the way, on all the metrics, again, the client growth numbers are what -- and thanks for pulling back the layers of the onion there, but always like even more layers, never enough for us, but in terms of growth in clients and more specifics going down the line. But the expense is clearly, Dermot, the flat expenses that very clear on that part of it. Are you implying even lower expenses in the fourth quarter based on your new guide today?

[Dermot McDonogh, executive]

So look, the thing I would like to convey to you and to our shareholders is that we worked really hard over the last couple of years to build credibility that we are good stewards of our expense base, and we guided flat at the beginning of the year. And broadly speaking, there's been some pressure, I would say, on expenses that, for the most part, are revenue related. And so if revenues are higher, there're some aspects that you just have to pay more expenses. So while I've guided roughly flat for the full year, there may be a little bit of pressure over the course of that because of higher revenues.

And also, as Robin said in his remarks, we've announced the acquisition of Archer and there will be some integration costs associated with that. But I feel very good the fact that now we have 53,000 people who understand the importance of financial discipline, and that goes to pillar #2 of being a really well-run company.

[Operator]

We'll move to our next question from Brian Bedell with Deutsche Bank.

[Brian Bedell, analyst]

Maybe just on -- just sticking with the revenue dynamic, the -- talking about the opportunity, the commercial lift off and the enterprise approach. The early traction that you're getting, I think you referenced some clients now doing multiple services, can you talk a little bit more about how you think that might impact the revenue growth trajectory? And then also just if you can just reconfirm the general revenue delta to equity markets. I think it was like 10% equity market moves can have a impact of about 1% revenue. So I just wanted to sort of break apart those 2 dynamics, just really kind of showing that you're actually generating this revenue growth aside from markets.

[Dermot McDonogh, executive]

So if I take the last question first, hopefully, that was your 2 questions in 1 go. So a 5% gradual change in equity markets is roughly $60 million in fees annually and a 5% gradual change in fixed income markets is roughly 40% -- or $40 million in fees annually. So that's a little bit on the sensitivity analysis. And so on just the commercial lift off that Robin talked about in his remarks, it really is [indiscernible] who's with us now for over a year spent the first year really on a listening tour and organizing roughly our 1,200 to 1,500 leading client coverage people around the world in terms of what we want our ambition to be, what are the products that we have and how can we educate our total force to be able to out there with clients delivering the whole of the firm.

I think, and also if you kind of just talk about Archer for a second, I think a couple of years ago, if we were to do that acquisition, 1 part of the firm would have bought it for its business. And I think Robin's point in his remarks are really, really important where you buy it once, you use it multiple times, and it's an acquisition that's done for the enterprise that will serve multiple lines of business. And that's how you should think about how our client coverage model is going to work in a strategic way going forward. We're going to deliver holistic solutions for our clients. Clients have a better understanding of the diversified nature of our business franchise, and they're just buying more from us. And it's just going to show up in revenue, and we feel very good about where we are today in terms of planning for the budget season for Q4 and the opportunities that are going to come our way in 2025.

[Operator]

We'll move to our next question from Alex Blostein with Goldman Sachs.

[Alexander Blostein, analyst]

So maybe just wrapping some of the comments you made around fee and a bigger picture question. When you guys think about a number of different growth areas you outlined some of the specifics, and obviously, the approach to cross-selling has taken a whole different attorney here. So when you use them out and you look at the business holistically, how do you think about the organic fee growth that the enterprise can generate over time?

[Dermot McDonogh, executive]

So you're trying -- so we don't guide on fees, haven't done -- don't intend to do it here. But what I would say is, and I gave this answer as an earlier question, we are seeing underlying growth across all 3 of our business segments. Our underlying organic growth this year, we feel quite happy about, and we feel it reflects a really good 9 months of the year. And there's no reason to expect that, that momentum won't continue. And I do feel the way we've set up for the back half of this year and into next year, it's a kind of flywheel of innovation, and we have a lot of growth initiatives. And we've come together and we have a group of people who are working on what we call integrated solutions. And so we have a number of interesting things in the pipeline.

Robin talked about [indiscernible] Bridge in his remarks, talked about Archer in his remarks. There are things that we're doing within specific lines of business coming together. We talked about Pershing being realigned into Clearance and Collateral Management, and that's driving growth as well. So the decisions that we've taken over the last couple of years in terms of realigning certain activities into different parts of the firm are showing up in our revenues this year, and we will continue to do that into next year.

[Robin Vince, executive]

And Alex, I'd just add, Dermot really alluded to this in what he just said. But right from the beginning, we've had 2 approaches. One is to think about this endeavor of fully realizing BNY's potential as a multiyear endeavor, and we recognize that there are going to be different ways in which that will come together in different years. And North Star, as you know, for us, is operating leverage, and that came about in a slightly different way in 2023 than it did in '24, and it could be different again in '25 as we really get into that conversation ultimately when we talk to you in January. But we've simultaneously invested in things that we knew would be important for the shorter term and for the medium term and for the longer term. And so both Dermot and I have talked about this platform's operating model. That's a great example. There have been some benefits that come early on in that process. We brought like things together across the company. There have been benefits on the revenue side. There have been benefits on the expense side from doing it.

But then the value of having done it creates medium-term momentum because now we're able to be more dynamic for clients. We're able to solve problems more quickly for clients. And so there's a payoff there. And then over the longer term, it actually makes it easier to be able to assemble these new solutions that Dermot was just talking about. And again, there's a revenue story there, but there's also an expense story. And that's how we're thinking about it. Notwithstanding, we haven't given you a specific growth target number. Make no mistake, we're invested in creating that growth.

[Alexander Blostein, analyst]

Yes. No, fair enough. I appreciate all that. Smaller kind of tactical question for you guys. So the repo activity continue to be quite elevated, and you mentioned that in your prepared remarks as well. Is it possible to help size how much repo contributed sort of across the enterprise? It hits you in a couple of different ways. Obviously, there's the NII benefit and there's some fee benefits. So as you think about the more normalized level of reproductivity versus what you saw in the quarter, how big of a contributor was that in kind of totality?

And as you look forward, given changes in monetary policy expectations, but also some of the client behavior that you mentioned earlier, how sustainable do you ultimately think this more elevated pace of activity in this market?

[Dermot McDonogh, executive]

So on the repo question, so a cleared repo, for sure, we saw elevated activity, particularly going into the back end of the quarter and in the early part of this quarter. And that, in large part, contributed to the outperformance for the Q3 NII. That has now moderated somewhat. And so in my prepared remarks, and in terms of the guidance, that's why I kind of feel like roughly for NII, we're about $1 billion for the fourth quarter.

In terms of cleared repo, overall, as a kind of contributor to the NII over the course of the year, it's roughly about 5% of the number. As it relates to elevated activity in terms of volume and activity, I think from what we see on our platforms, we kind of see that continuing to be the case in the medium term. There's no reason for the slowdown. It's been a very strong year, very, very active client engagement, product innovation. And particularly on the international side, we said at the beginning of the year in our kind of strategic call in January that international was going to be a key area of focus on the platform, and that's been the case, and that's shown up in the results.

So I think overall, as I said in my prepared remarks as well, in terms of the liquidity ecosystem in total hit a high for us at $1.5 trillion. That's up from $1.2 trillion a couple of years ago, and that's in the backdrop of liquidity coming out of the system. So we've grown quite substantially. And that again is coming back to connecting the dots across the firm, getting teams collaborating more, being more digital, providing innovative solutions to clients, and that is really powering the growth.

[Robin Vince, executive]

If I could just relate that back to a question that Mike had asked earlier on because I think these things are relevant. You got to remember that the strategy of us having roughly the right ores in roughly the right waters to be able to participate in things that are happening in the world, that's very important. So if I just supplement what Dermot said, with the additional observation that we're the world's largest security lender that generates repo activity. We're the world's largest collateral manager so we get to capture fees associated with repo doing repo. We obviously play this role in the U.S. treasury market, which participates in the growth of U.S. Treasury repo. We have all of these different touch points. And so there are different ways in which we can collect across software, in some cases, services that we administer in others, and participation in different, both global markets and also product types, which align in indirect ways to that. So that's an important part of how we look at the overall system and understand how our products and services can help clients navigate those, and we can participate in the benefit of that growth.

[Operator]

We'll move to our next question from Gerard Cassidy with RBC.

[Gerard Cassidy, analyst]

Robin, can you give us some thoughts with -- obviously, you talked a little bit about the acquisition you accomplished in this quarter. What your outlook is for -- you've obviously very strong capital levels, your stock has moved very nicely this year and you get a better currency. What the outlook is for just other types of acquisitions if there are some that could be complementary to what you're currently doing?

[Robin Vince, executive]

Sure, Gerard. First of all, just make a quick comment about Archer. Looking forward to closing that transaction in the fourth quarter and welcoming the team in. And this relates a little bit to a couple of other things that we've already talked about on the call. One is participation in markets and the other one earlier on, on ETFs. If you just think about the way that we view the world construct, once upon a time they were mutual funds. More recently in the past decade or so, it's really been the explosion of ETFs. And there's simultaneous thing going on, which is the growth of separately managed accounts. And so in the same way that Dermot described how we've participated in sort of outsized participation of the ETF migration, Archer is a transaction that prepositions us to be able to participate hopefully in an outsized way associated with the transition to separately managed accounts. So it relates to that strategic question, o growth and participating in different markets that we talked about.

Now stepping back to the other part of your question, really, the heart of it on M&A, look, our primary focus is what we have and how we can improve on it. And Dermot and I both talk a lot about the fact that we've looked very carefully at our businesses and we love our businesses. We think we have a great set of businesses. We think they are great ones to be in, and we think that they have a lot of adjacency to each other. And we think that the spread of those things can provide a lot more services to our clients in more joined up ways and solutions than maybe we have before. So it isn't that we do M&A from a position in any way of needing to do things, it's we're able to be very opportunistic, and we obviously like that a lot. But notwithstanding that we're pleased with what we have, we don't want to be complacent. So we keep our eyes open, and we look at things and Archer came about as a result of a strategic business review that we did internally, looking at long-term trends, looking at how we might adapt to those trends. And then we went out and we looked very specifically for a capability that would do that, with the key emphasis being on the word capability, digestible bolt-on things that accelerate what we're trying to do or derisk delivery of what we're trying to do.

And if we can buy a piece of technology that can be more efficient or less distracting than building it ourselves with a great team, great technology, ideally like this one, an installed book of business is also helpful, then we feel very good about it. As long as it aligns with those priorities, is a good cultural fit, has a good attractive returns. So that's our M&A thought process. And then that fits into the overall waterfall, which we've talked about before, which is, if we have excess capital, we're going to, of course, be prudent. And so we like excess capital. That's bad thing in an uncertain world. And so that's a very important consideration. Then we look at whether or not we could invest it. Good news, as you know, we're a pretty capital-light model, we're very capital generative, so we don't need a ton of capital to reinvest in our business to keep growing it. Then we look at whether or not we need something -- for some type of additional need, like the Archer example and then we distribute the rest. And this has been obviously a good year to see all of that on display.

We've been prudent. We've run at elevated capital levels, and, as Dermot indicated, we intend to return 100% plus of net earnings to shareholders, and we've been able to make an acquisition. And so this is a pretty good model year for how we think about the world.

[Gerard Cassidy, analyst]

Very good. And then just a quick follow-up, Dermot. You gave us that sensitivity analysis about a gradual 5% change in the equity markets and fixed income and the impact it would have on revenue. Was that for up markets, meaning if the gradual increase was 5% up, does that also reflect down market, if markets were down 5%, that's the kind of impact we would expect to see?

[Dermot McDonogh, executive]

That's correct, Gerard, that's correct.

[Operator]

We'll move to our next question from Ebrahim Poonawala with Bank of America.

[Ebrahim Poonawala, analyst]

I have a follow-up with some of your responses. I think, I guess, depending how -- maybe starting with this capital allocation. So how do your response to Gerard's question around M&A and such. But just talk to us how you think about, means when we think about the valuation of the stock on price to earnings, price to tangible book, at the same time, this year has been pretty good market backdrop wise, and as an investor shareholder, you care about ROE resiliency of these firms. So 1 maybe, Robin or Dermot, talk to us about your comfort around ROE resiliency? If the market backdrop is unfavorable, what's the flex in the system?

And given where things stand today, like how do you think about the stock valuation versus the commitment to return 100% plus buybacks and dividends?

[Robin Vince, executive]

I'll take the second bit first, and then Dermot will reflect on the first part of your question. So the good news is that we can also pay attention to the way that you all think about the stock and your views of our stock. And we appreciate the fact that many of you have expressed confidence in our forward direction. We believe in ourselves as well. And so what we do, of course, consider price as one of the many inputs into our capital return framework, we don't view current prices as being problematic in terms of continuing our stock buybacks.

[Dermot McDonogh, executive]

Ebrahim, when I took on the role a couple of years ago, I guess I got a lot of questions about is this just going to be more of the same or what's different? And now we're several quarters into the new team, and Robin has really kind of bolstered that team and through the strategic pillars, communication, the principles, the medium-term financial targets has really started to evolve the culture of BNY. And so it is our commitment to deliver to our shareholders' positive operating leverage through the cycle. And so if you just take a step back and look at this quarter's financials, 5% revenue growth, flat expense growth, 33% pretax margin, upper end of Tier 1 leverage 6%, 23% return on tangible common equity and a 22% EPS growth. And what I would say is a solid beast.

So I don't really think about the valuation of the firm on any given day. We just care about delivering for our clients and our shareholders. And if we do that in a first-class way, the valuation will take care of itself.

[Robin Vince, executive]

And you asked about the returns and our sort of comfort with them. Look, we've given medium-term targets, as Dermot just said, that's sort of greater than or equal to 23% for ROTCE. And so we obviously appreciate touching that, but doing it consistently over time is how we really view achieving targets. And in terms of the resiliency, remember the very nature of our business is actually got this diversification. We talked about the equity markets and the fixed income markets. I talked about the fact that it is software, its services, platforms and market valuations and transaction volumes. These are all that we participate in. Capital markets activities has been important to us in 2024. The fact that we participate through our Corporate Trust business through our debt capital markets business, those are things that are participating in the growth of capital markets generally. We participate in scale of markets and things like the treasury market is a good example.

And so this diversification of our mix helps us to be resilient in terms of the vagaries of any one particular market or cycle. Now of course, things will move around, and that's why Dermot mentioned the point about our our commitment to positive operating leverage in almost all reasonable scenarios that we can imagine because we recognize that NII, which is part of our mix, but so too are the fees and then our ability to control expenses. We could make expenses less than they are now. We've chosen to manage them at the level that they are because we believe that investing in that business for future growth is exactly what we should be doing right now given the environment, but it wouldn't always have to be so.

[Ebrahim Poonawala, analyst]

Appreciate that. And if I can sneak 1 quick more follow-up. Dermot, I think you mentioned fourth quarter NII slightly lower than 3Q. We've seen a few rate cuts in Europe, in the U.S. now in September. Is it fair to assume that absent a dramatic change in rates, this $1 billion in quarterly NII is kind of where we are bouncing around at the bottom? And then if deposit growth picks up, QT stops, that it should go off that base? Or am I missing something?

[Dermot McDonogh, executive]

So if you look back at our last 5 quarters, we've kind of toggled between $1 billion and $1.1 billion. Q3 was a stronger quarter for us for a number of reasons, principally volatility in the market at the beginning of August and clients held more cash. And then towards the back end of the quarter, once there was a clear view on where the Fed was going to go at rates, clients started to put money into money market funds, which ended up with us. And so we kind of benefited from those 2 principal things. And so our deposit balances have kind of leveled off here. We expect maybe NIBs grind down a little bit from here. And so as I kind of said maybe 10 minutes ago, $1 billion for Q4 is the best guidance I can give you today. And for '25, I don't see NII being a kind of a headwind for us. And we've taken extensive action over the last several weeks in terms of repositioning our CIO book to insulate '25.

[Operator]

[Operator Instructions] We'll move to our next question from Betsy Graseck with Morgan Stanley.

[Betsy Graseck, analyst]

Two quick questions. One is on the buyback question, and I know you said, look, you're very accretive on earnings accretion. You don't need a lot of capital for the business model, of course, as we know, and you're above your target CET1 of 11% and Tier 1 leverage target 5.5% to 6%, you're at the high end of that range. And so when we think about the 100% plus, how should we think about the plus part of the 100% plus? Because it feels like totally 100% makes sense, but there's room to bring these to optimize the capital structure more. So I'm kind of thinking about -- I'm wondering what kind of time frame are we talking about to optimize your capital structure, do you feel?

[Dermot McDonogh, executive]

So thanks for the question, Betsy. Last year, we returned a little north of 120%. This year, in January, we guided a 100% or more. Given the uncertainty in the markets, geopolitical, the U.S. presidential elections, a wide range of uncertainty with Fed. In January, we thought the year was going to be very different to where it's ended up. And I think, on previous calls, we said we wanted for now stick towards the upper end of our Tier 1 leverage ratio, which is the 6% range. And so when you take that and the Archer transaction, we kind of think we're still on track to do the 100% or more [ through ] 3 quarters, we're at 103%. So I wouldn't expect that to materially change from here.

[Betsy Graseck, analyst]

Okay. Got it. And then the other question is you mentioned 1/3 of BNY is now on the platform model. And are you taking 100% of the firm there? And just wondering about implications for the runway for efficiency improvements as you execute on that?

[Dermot McDonogh, executive]

So 1/4 of the firm, roughly 13,000 employees are on the platform now, happened in 2 waves, March and September, with another wave going live in Q1 of next year. And so I wouldn't necessarily think about platform operating model as a mechanism just for efficiency. It really is -- it's going to drive top line growth and is going to run the company better and it's going to help us have a different culture in terms of more joined-up thinking. So it really is the mechanism by which we deliver the 3 strategic pillars.

And so the answer to the question about 100% is, yes. And from probably -- from here, it's probably another 18 months before the firm is fully up there. But by the end of Q1 of next year, we expect about half of the firm will be live on the model. And the feedback so far from our team around the world is extraordinarily positive. So it's really worked well for us as a firm.

[Robin Vince, executive]

And Beth, you remember the tail of benefit extends way past the 18-month point because sometimes it's not until folks are in the model and operating in that new approach that they're really able to examine some of the core questions that, that platform is confronted with in terms of how to optimize. So we expect the benefit that that Dermot was describing to be a multiyear endeavor past that 18-month point.

[Operator]

We'll move to our next question from Glenn Schorr with Evercore ISI.

[Glenn Schorr, analyst]

Just 1 wrap up for me. Dermot, I love you pointed out the 5% revenue growth, flattish expenses lead to 20% earnings growth. That is the power of the BK model. If you look just -- I know it's just 1 quarter, but if you look at the sequential numbers, the story changed a little bit with everything about flat and earnings down a little bit. I'm just -- all I'm asking is, does that inform us in any way of how we're looking at as we roll into '25? A lot of your business metrics and balance and client wins are up. So my gut is now, but I just want to see from that perspective, how you feel about that?

[Dermot McDonogh, executive]

So I think you got it correct. It is [indiscernible]. And it's all just about timing and when we onboard clients and put people on the platform and when the revenue starts to get recognized. So it's just in terms of the backlog across all our businesses, strong pipeline continues to grow. And, yes, so your intuition is correct.

[Operator]

We'll move to our next question from Rajiv Bhatia with Morningstar.

[Rajiv Bhatia, analyst]

Yes. Just a quick 1 for me. I guess, on the depository receipts business, and I appreciate it's a small business, but the number of sponsored programs continue to decline. Is that something we should continue to expect to decline? And is it competitive takeaways or something else that's driving that?

[Dermot McDonogh, executive]

So I wouldn't really read too much into that. That's -- we've talked about that for several years about the sponsored program going away and not been around. It's still here. Deposit receipts is a small business in the totality of it, but it is a very, very important business for us because it gives us another opportunity to connect with clients, and it has got a very good margin to it. And we have like very significant market share in that business. So it's something that we continue to invest in. We think it's very important for our franchise, and we don't see a secular decline in that business from where we see it today.

[Robin Vince, executive]

We also off-boarded some of the smaller clients in that particular business. So the headline of total number is a little bit misleading actually when -- if you were able to dig under the hood and see some of the clients that made up that decline, you'd see that they disproportionately skewed to the small.

[Operator]

We'll move to our next question from Jim Mitchell with Seaport Global Securities.

[James Mitchell, analyst]

My questions have all been asked and answered. Thanks.

[Operator]

[Operator Instructions] We'll move to our next question from Brian Bedell with Deutsche Bank.

[Brian Bedell, analyst]

Just 1 more on the margins. You mostly at your 33% target in most areas. So you generate more sales from moving to the platform model, and as we move into, say, next year or beyond, I guess, what's the view on spending some of that and investing in the business versus actually generating, potentially generating margins well above [ 33% ]?

[Dermot McDonogh, executive]

SP1 So my answer to that one, Jim, would be, we want to demonstrate to you that we can prove that we can deliver 33% margins through the cycle. We gave guidance for the first time in January, and then we just managed to get there pretty quickly. But we want to stay there and show that we can deliver that over a period of time. We're heading into a very -- what's going to be quite an interesting budget season for us because we've done a lot of great things this year. I know the various teams around the firm want to do great things next year. And to offset that balance, we want to be able to deliver positive operating leverage. And so the next 8 weeks and how we set up the firm for next year would inform how we communicate with you in January.

But we set out those targets because we believe we could hit them. The positive is we got there earlier than we thought. And now we want to show that we can improve and maintain those margins that we've guided to previously.

[Robin Vince, executive]

Brian, the best clue I could give you in terms of how we think about that, it's sort of a little bit more detail is if you actually look at us on a segment-by-segment basis, you can see us prosecuting the operating leverage journey differently in our 3 segments. And we told you a year or so ago that, that's what we were going to do. And so maybe to allay your concerns in terms of growth and investment, if you look at Market and Wealth Services, we aren't trying to grow the margin there. We're very happy with the margin, we just wanted to grow the total size of the business, which is exactly what we've been doing.

There are the other segments where we said we actually do want to grow the margin towards our medium-term targets for those segments. There, we are really growing the margin. And so you can see exactly your question at work in our segments.

[Operator]

And for our final question, we'll return to the line of Mike Mayo with Wells Fargo.

[Michael Mayo, analyst]

With all this talk of the transitioning of the employees, I guess, half the employees to the new platform over the next 1 to 2 years, how much do you see AI playing a role? And can you give any metrics? I mean keeping expenses flat. I don't know how much you're still investing in AI. When Emily presented at the Boston Bank Conference last November, it seemed like BNY was all in for AI. It was one of the most bullish cases made yet you've heard out in the the broader world, sometimes you have hit, sometimes you have misses. So where -- how does AI relate to the whole platform strategy? And how committed are you to AI? And do you have any numbers that you can give us, some concrete metrics?

[Robin Vince, executive]

Sure. So just to reiterate, we've got 1/4 of our people in the platform's operating model. And as Dermot said, it's sort of an 18-month trajectory from here. That's really, Mike, the way I think about platform's operating model is this concept of, if you take it that we are, in fact, more and more a platforms company in terms of these large at-scale capabilities often software and services that we deliver generally in market-leading positions, #1, in a variety of different markets. We've talked about things -- the businesses before, I won't repeat them, then it follows to us from that it makes sense for us to operate ourselves in a platform's operating model, which is the way that many other platform companies in the world operate themselves.

And so that is a strategy around how we organize ourselves in pursuing being pursuant to our broader strategy. Now AI as a -- which is, of course, part of that, have an AI hub. We have a couple of hundred people in that AI hub, and we are absolutely investing in AI and do believe in the power of AI to be able to help our business in terms of both revenue opportunities over time for clients and also ways to make our people more effective and efficient. And we haven't made a lot of noise about it, but don't misunderstand that for a lack of interest or investment because we haven't slowed down. In fact, we've increased our AI investment.

And of course, notwithstanding all of that, you can see that from running the company well on an expense line, we're not allowing that enthusiasm to distract us from the important task of expense management. And this is where I don't mean to be pity, but it's very, very important learning for us is that we, as a company, can walk and chew gum at the same time. can invest in things that matter and we can manage the company well. We make choices and AI is a choice of something we're leaning into, and we think that's important for the future.

[Operator]

And with that, that does conclude our question-and-answer session for today. I would now like to turn the call back over to Robin for any additional or closing remarks.

[Robin Vince, executive]

Thank you, operator, and thanks, everyone, for your time today. We appreciate your interest in BNY. Please reach out to Marius and the IR team if you have any follow-up questions. Be well.

[Operator]

SP1 Thank you. This does conclude today's conference and webcast. A replay of this conference call and webcast will be available on the BNY Investor Relations website at 2:00 p.m. Eastern Standard Time today. Have a great day.