Good morning, and welcome to the 2023 Fourth Quarter Earnings Conference Call hosted by BNY Mellon. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. 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 Mellon's consent. I will now turn the call over to Marius Merz, BNY Mellon, Head of Investor Relations. Please go ahead..

Thank you, operator. Good afternoon, and thank you all for joining us. I'm here with Robin Vince, 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 bnymellon.com.

I'd like to 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, January 12, 2024, and will not be updated.

With that, I will turn it over to Robin..

Thank you, Marius. Good afternoon, everyone, and thanks for joining us. The fourth quarter marked a solid close to a year in which we supported our clients in navigating through a challenging operating environment with geopolitical tensions, macroeconomic uncertainty and evolving monetary policy.

We started to show some early evidence that we can deliver higher financial performance in the near and medium term. We clarified our strategic priorities and we laid the foundation for a multi-year transformation of our company for the long-term.

With a clearer focus on our direction of travel and having restored some confidence in our ability to deliver on our plans, today we are publishing financial targets for each of our business segments and the firm overall. Dermot will review our fourth quarter financials, the outlook for 2024, and our medium-term financial targets in more detail.

But let me first briefly address our performance in 2023. Referring to Page 2 of the financial highlights presentation. Our results for the year not only highlight BNY Mellon's characteristic resilience, but they demonstrate the strength of our execution when we are appropriately organized and focused.

On a reported basis, 2023, earnings per share increased by 38% year-over-year. On a core basis, excluding notable items, EPS of $5.05 increased by 10% year-over-year. Both pre-tax margin and return on tangible common equity improved on the back of significant operating leverage.

Excluding notable items, we generated approximately 180 basis points of positive operating leverage. ROTCE improved 0.5 percentage point to 21.6%, and pre-tax margin improved roughly 80 basis points to 30%. Moving on to Page 3. At the beginning of last year, we communicated three financial goals for 2023.

First, we expected to generate approximately 20% net interest revenue growth year-over-year. We delivered 24%. Second, we set out to half our constant-currency expense growth rate in 2022 to approximately 4% year-over-year expense growth, excluding notable items in 2023. We delivered 2.7%.

And third, we sought to return north of 100% of 2023 earnings to common shareholders through dividends and buybacks. We delivered 123%.

Over the course of 2023, we returned $3.9 billion of capital to common shareholders, all while having further strengthened our regulatory capital ratios to be well-positioned for a wide range of macroeconomic and regulatory outcomes. So we are still at the beginning of our transformation journey.

Our ability this past year, not just to deliver on our commitments but to exceed them gives us confidence that we can effect meaningful change and consistently improve our financial performance over time. While mindful, there is a lot more work ahead of us.

I'm proud of the effort that our people put in over the last 12 months as we embraced a focus on commerciality, accountability and efficiency, which drove these results.

We are committed to improving the firm's financial performance in the near, medium and long term, and we have framed this work for our people with three strategic pillars, which we describe on Page 4.

Last year we introduced these three pillars to get at the heart of how we operate and who we are day-to-day for our clients, managing their money, moving it and keeping it safe. Pillar number one, be more for our clients; number two, run our company better; and number three, power our culture.

They are deliberately simple and our people are rallying around them. As I've said before, strategy is important, but ultimately just a set of words. Actually doing it and how we do it matters a lot. I'm encouraged by the progress we made in 2023, some of which we highlight on Slide 5.

Our global clients across government's pension funds, mutual funds, unions, endowments, corporations, financial services firms, and individuals, both trust and want to do more business with us. And our analysis clearly shows that is more for them to do with us as we continue to partner alongside them to help achieve their ambitions.

As the global financial system grows and becomes ever more complex, demand for a trusted resilient partner with the scale to service clients across the entire financial life-cycle, such as BNY Mellon, grows as well.

In 2023, we launched several new solutions that allow us to deepen our relationships with existing clients and to open the door to new ones. Of course, that includes the launch of Wove, Pershing's wealth advisory platform, as well as the rollout of our buy-side trading solutions offering, but it goes far beyond these more visible product launches.

All of our businesses are bringing new client solutions to the market, Bankify, real-time payments on FedNow, white labeling Liquidity Direct, bond-wise intraday repo settlement, BNY Mellon Advisors are all examples. And in 2023, we filed more patent applications than ever before.

At the same time, we have an opportunity to bring more of BNY Mellon to clients who currently use us for just a single service. Last year, we hired our first Chief Commercial Officer as we began to operationalize our one BNY Mellon initiative across the organization.

As part of enhancing the organizational setup and focus of our client coverage organization, we created an integrated team to facilitate multi-line of business solutions at scale, and we also formed a coverage practice group to implement consistency and approach and tooling.

Next, while 2023 was a foundational year and what will be a multi-year journey to transform to a more streamlined and effective operating model, we took important steps toward running our company better to improve efficiency, reduce bureaucracy, and be more intentional with how we spend so our investments in the business go further.

We generated nearly double the amount of efficiency savings versus the prior year, which allowed us to self-fund over $0.5 billion of incremental investments, and we laid the foundation needed to transition to a platform's operating model, including successful pilots in two areas of the organization, which were important proof points as we start to unlock the power of our platforms in several phases over the next couple of years.

While we focus on being more for our clients and running our company better, we know none of it can happen without our people, which is why we are powering our culture to make BNY Mellon a place where people are proud to work and excited to grow their careers.

We elevated recruitment and retention programs, including welcoming the largest class of campus analysts in BNY Mellon's history, a class double the size of the previous year and we're going to double it again this year.

We launched our BK shares program to grant shares to the 45,000 employees who didn't previously receive stock as part of their compensation to cascade a sense of ownership and accountability across our company. And we rolled out enhanced employee benefits recognizing value in fostering both a human and high-performing work environment.

I'll wrap up where I began. We remain confident in the strength of our culture, our strategy and our ability to execute to help us unlock value for our clients, our shareholders, and our people.

2023 was an important year in which we assembled more of the team that can deliver on what is needed and we got ourselves pointed in the right direction for what we need to achieve, but it was also a year where being humble and resilient mattered.

While we have a lot of work ahead of us, what started as a theory and a belief now has early proof points, and we can see the possibility of what we can achieve. We have an ambitious agenda as we move forward, but I continue to be optimistic about the opportunity ahead. With that, I'll turn it over to Dermot..

Thank you, Robin, and good afternoon, everyone. I'm picking up on Page 6 of the presentation with our consolidated financials for the fourth quarter, and as Robin noted, I'm also going to speak to our 2024 outlook and medium-term targets, including how we are going to execute on our goals.

For the fourth quarter, our reported results reflect several notable items. Approximately $750 million of non-interest expense is related to the FDIC special assessment severance and litigation reserves.

And we had $150 million reduction in investment and other revenue, primarily related to a fair-value adjustment of a contingent consideration receivable. Total revenue of $4.3 billion was up 10% year-over-year, or up 2% excluding notable items.

Total fee revenue was flat, reflecting 3% growth in investment services fees, which was offset by a 5% decline in investment management and performance fees, and 25% decline in foreign-exchange revenue. Investment and other revenue was a negative $4 million in the quarter, reflecting the fair-value adjustments as I mentioned before.

Net interest revenue was up 4% year-over-year, primarily reflecting higher interest rates, partially offset by changes in balance sheet size and mix. Expenses were up 20% year-over-year on a reported basis, primarily reflecting the FDIC special assessment.

Excluding notable items, expenses were up 4%, reflecting higher investments and the impact of a weaker dollar, as well as inflation, partially offset by efficiency savings. Provision for credit losses was $84 million, primarily driven by reserve builds for commercial real-estate exposure. Reported earnings per share for the fourth quarter were $0.33.

Pre-tax margin was 8% and return on tangible common equity was 6%. Excluding notable items, earnings per share were $1.28, pre-tax margin was 28%, and return on tangible common equity was 21%. Turning to capital and liquidity on Page 7.

Our Tier 1 leverage ratio of 6% remained largely unchanged, down 8 basis points to be precise compared to the prior quarter.

Tier 1 capital remained essentially flat at $23.1 billion as the impacts of capital distributions to common shareholders and our redemption of $500 million preferred stock were offset by an improvement in AOCI and capital generated through earnings.

Average assets increased by 1% sequentially, primarily reflecting deposit inflows in the fourth quarter. Our CET1 ratio was 11.6% which represents a 20 basis points improvement compared with the prior quarter.

CET1 capital was up 3% sequentially, primarily reflecting capital generated through earnings and the improvement in AOCI, partially offset by the impact of capital distributions to common shareholders. Risk-weighted assets increased by 1%.

Consistent with the prior quarter, we returned $450 million of capital to our common shareholders through share repurchases, and we paid approximately $330 million of common stock dividends in the fourth quarter.

The consolidated liquidity coverage ratio was 117%, a 4 percentage points sequential decrease, primarily reflecting deposit inflows in the quarter, which are considered non-operational until they are seasoned under our operational deposit model, and our consolidated net stable funding ratio remained roughly unchanged at 135%.

Next, on Page 8, net interest revenue and additional details on the underlying balance sheet trends. Net interest revenue was $1.1 billion. It was up 4% year-over-year and up 8% quarter-over-quarter. The sequential increase was primarily driven by balance sheet growth and changes in balance sheet mix.

Total deposits averaged $273 billion in the fourth quarter, up 4% sequentially, a strong finish to the year. Interest-bearing deposits were up 5%, and non-interest-bearing deposits remained flat. Interestingly, since August, we've seen four consecutive months of growth in average total deposit balances.

Our team is highly engaged with our clients and we're encouraged by the demand we've been seeing for our on-balance sheet liquidity solutions, and we are pleased with the stabilization. We remain vigilant, preparing for a variety of different outcomes and financial conditions in 2024.

On the asset side, average interest-earning assets increased by 2% quarter-over-quarter. This includes cash and reverse repo up 5%, and loan balances up 3%. The size of our investment securities portfolio decreased by 3% sequentially. Moving to our business segments starting with Securities Services on Page 9.

Securities Services reported a total revenue of $2.2 billion, flat year-over-year. Investment services fees were up 1% year-over-year. In asset servicing, investment services fees were flat as the positive impact of higher market levels, net new business, and a weaker dollar was offset by lower client activity.

We ended the year on a high note, with our strongest sales quarter of 2023, including wins in the Middle East, new mandates from several mid-sized investment managers, and expanded mandates from some of our largest existing clients.

And we saw continued strength in our ETF servicing business with another quarter of strong net inflows capped a year of above-market growth. Within Issuer Services, investment services fees were up 5%, reflecting healthy new business and higher client activity.

Foreign exchange revenue was down 21% year-over-year on the back of lower volatility and lower volumes. And net interest revenue was down 3% year-over-year. Expenses of $1.7 billion were up 5% year-over-year, reflecting higher investments and higher revenue-related expenses, as well as inflation, partially offset by efficiency savings.

Pre-tax income was approximately $460 million, representing a 21% pre-tax margin. Next, Market and Wealth Services on Page 10. This segment reported a total revenue of $1.5 billion, up 7% year-over-year. Total investment services fees were up 6% year-over-year.

In Pershing investment services fees were up 1%, reflecting higher equity market values and higher client activity, partially offset by the impact of expected lost business. Net-new assets were negative $4 billion for the quarter, also reflecting this expected loss business.

In Treasury Services, investment services fees increased by 5%, primarily reflecting higher client activity, partially offset by higher earnings credits for non-interest-bearing deposit balances.

In Clearance and Collateral Management, investment services fees were up 16%, reflecting broad-based strength across Clearance and Collateral Management, both in the US and internationally. Net interest revenue increased by 10% year-over-year.

Expenses of approximately $840 million were up 7% year-over-year, reflecting higher investments and inflation, partially offset by efficiency savings. Pre-tax income was approximately $630 million, representing a 42% pre-tax margin. Turning to Investment and Wealth Management on Page 11.

Investment and Wealth Management reported total revenue of $676 million, down 18% year-over-year.

In investment management, revenue was down 26%, reflecting the fair-value adjustment of the receivable and the impact of the prior year divestiture, as well as the mix of AUM flows, partially offset by higher market values, seed capital gains and the weaker dollar.

In our wealth management business, revenue decreased by 3%, driven by changes in product mix, partially offset by higher market values.

Expenses of approximately $680 million were down 2% year-over-year, primarily reflecting efficiency savings and the impact of the divestiture in 2022, partially offset by higher investments, inflation and the unfavorable impact of the weaker dollar. Pre-tax income was a loss of $5 million.

Excluding the impact of notable items, pre-tax income of $151 million increased 1% year-over-year and represents an 18% pre-tax margin. Assets under management of $2 trillion increased by 8% year-over-year, reflecting higher market values and the weaker dollar, partially offset by cumulative net outflows.

In the quarter, we saw $7 billion of net inflows into short-term strategies and $4 billion of net inflows into long-term active strategies, while we saw $10 billion of net outflows from index strategies. Wealth management client assets of $312 billion increased by 16% year-over-year, reflecting higher equity market values and cumulative net inflows.

Page 12 shows the results of the other segments. Total revenue improved year-over-year, primarily reflecting the absence of a net loss from repositioning the securities portfolio recorded in the fourth quarter of 2022, and expenses of $693 million included $505 million related to the FDIC special assessment.

Having reviewed our results, I will now turn to Page 14, and our current outlook for 2024. We're entering the year on a strong footing and we set ourselves up determined to at least break even from an operating leverage perspective. Considering our healthy pipeline across the businesses, we expect fee revenue growth to turn positive in 2024.

With regards to net interest revenue, our expectation for an approximately 10% decrease year-over-year is based on the assumption of market-implied forward interest rates and we assume ongoing quantitative tightening puts further downward pressure on deposit balances. We intend to keep expenses excluding notable items, roughly flat in 2024.

And finally, with regard to capital management, we expect to return north of 100% of 2024 earnings to common shareholders through dividends and buybacks. As Robin discussed earlier, 2023 was a foundational year for us.

We took decisive actions to demonstrate some early evidence of our ability to deliver stronger financial performance, and importantly, we've developed a clear roadmap for our multi-year transformation.

Over the next couple of slides, we'll provide you our medium-term financial targets for the firm and some of the most impactful actions we're taking to keep delivering on our goals. Page 15 summarizes our consolidated targets.

It is our goal to improve the firm's pre-tax margin to 33% and our ROTCE to 23% over the medium-term, while maintaining a strong balance sheet. I'll double-click on our business segments in a moment, but along our three strategic pillars, there are a number of teams that transcend our lines of business and segments.

Robin mentioned several updates when he talks about our progress in 2023, so I'll highlight just a few with them. The first is our enhanced commercial model. We're driving a new culture of commerciality to deliver all of BNY Mellon in a unified front to facilitate deeper client relationships with solutions from across the firm.

With our clients at the center, our module is led by client coverage teams with clear accountability to retain business, expand revenue into new areas and drive client satisfaction.

Our new sales operations and enablement organization, the client coverage practice, will make it easier for our clients to do more business with BNY Mellon and create consistent commercial roles, tools and support internally for an enhanced and more efficient sales experience.

And what we call integrated solutions represents a new more focused approach to assembling components from multiple client platforms into a piece will go-to-market capabilities that span across our lines of business, driving better value for our clients and higher profitable growth.

The second one I'd like to highlight is our transition to a platform's operating model. By grouping similar activities together into logical platforms and uniting related capabilities, we are enabling the streamlining of internal processes to drive higher efficiency and further enhance resiliency and risk management.

Our model is based on two types of platforms. Client platforms will own the delivery of a commercial solution to our external clients, while enterprise platforms will own the delivery of internal services.

Over the past few months, we've developed a detailed implementation approach and our transition into this new model will be gradual and deliberate, starting with the first implementation wave this spring. And the third is our culture. People come to BNY Mellon to make an impact on global financial markets.

While we focus on driving growth and running our company better, none of it can happen without our people. That's why we're making meaningful investments, including in enhanced learning, development and feedback to foster exciting careers. Moving to our segments, starting with Securities Services on Page 16.

Here, we are reiterating our existing 30% pre-tax margin target. Over the past 24 months, we've improved the margin from 21% in 2021 to 25% in 2023. We are pleased with the performance of the business over the past two years, but we appreciate that the path from 25% to 30% will be the harder yards.

First of all, we are firmly focused on driving down the cost-to-serve. We have and we continue to make significant investments in uplifting several platforms that support core services, including fund accounting, tax services, corporate actions and loan administration. Additionally, we continue going after inefficient processes.

Over the past couple of years, we cataloged all of these processes and we've made some good progress in our digitization efforts, but there is more work to do. We're also taking a more strategic approach to deepening client relationships going forward.

Using enhanced tools to better understand client behavior, quality of service, economics and revenue opportunities, we are expanding wallet share and improving client profitability. Last but not least, we're pursuing several opportunities to drive an acceleration of underlying growth.

On the back of our investments over the years, we have become a premier provider of ETF servicing globally, and we expect to maintain our strong momentum through continued innovation.

Similarly, in private markets, another one of the fastest-growing market segments, we've established a strong market position with more room to expand our capability set. Moving on to Market and Wealth Services on Page 17. As you can see on the left side of the page, this segment has a good track record of solid growth and attractive margins.

Our focus here is to accelerate growth through deliberate investments without compromising profitability. I'll start with Pershing, our company's second-largest line of business.

As the number-one clearing firm for broker-dealers and a top three RIA custodian, Pershing benefits from a strong position in one of the fastest-growing segments in financial services, i.e., the US wealth market.

Notwithstanding near-term headwinds from the events of 2023, we are confident that our investments in the core platforms and client experience will drive further market-share gains in the attractive market segments after growing $1 billion-plus RIAs and hybrid broker-dealers. And our Wove platform continues to gain momentum.

As we're capturing business from existing clients and new opportunities to deliver the platform, data and investment solutions, we're currently projecting $30 million to $40 million of incremental revenue from Wove in 2024.

In Treasury Services, we're benefiting from a strong position with financial institutions and we're one of the top-five US dollar payment clearers in the world. Leveraging the strong position, we are selectively expanding our reach by targeting new client geographic and product segments.

For example, we've been adding bankers to drive growth with e-commerce and NBFI clients and the completion of a multi-year uplift of our payments platform is expected to drive an increase to our swift market share through growth in several geographies.

Additionally, by joining forces with our markets business, which provides FX solutions in over 100 currencies, Treasury Services will enhance the FX capabilities that it can provide its clients. Rounding out the segment, Clearance and Collateral Management.

As the primary provider assessment for all US government securities trades and the largest global collateral manager in the world, we have a special role in financial markets and we're taking this role very seriously. No doubt, this business grows as markets grow, but we're not resting on our position.

Our Clearance and Collateral Management business is one of the most innovative in the company.

And so we're confident that this business can maintain its healthy growth trajectory by continuously launching new flexible collateral management solutions that position our clients to meet their growing liquidity needs and by continuing to increase collateral mobility and optimization across global client venues.

Next, Investment and Wealth Management on Page 18. Investment and Wealth Management reported a pre-tax margin of 12% for the full year 2023, or 17% excluding notable items. Our plan is to improve the segment margin to 25% or higher over the medium term on the back of a combination of growth and efficiency initiatives.

First, we're unlocking BNY Mellon's distribution power for the benefit of our investment firms and our clients. Most importantly, we're in the process of creating a firmwide distribution platform that combines enhanced products with offerings from select third-party managers to provide best-in-class solutions.

Additionally, we're making enhancements to how we're offering Dreyfus Cash products across our enterprise-wide open architecture liquidity ecosystem to improve visibility and enhance platform share.

Second, we're expanding our products and solutions with a focus on scaling our investment capabilities across Investment Management, Wealth Management and Pershing.

And heard, we're driving efficiency and scale by realizing the benefits as multi-year infrastructure investment programs are nearing completion, and by better leveraging the enterprise to transform fragmented and sub-scale support activities into scaled enterprise platforms. Moving onto our capital management philosophy on Page 19.

BNY Mellon benefits from a capital-light business model that allows us to drive organic growth while typically returning nearly 100% of earnings to our common shareholders over time.

Over the past 10 years, the firm grew dividends per share at an 11% CAGR and returned almost 100% of earnings to shareholders through a combination of dividends and buybacks. Our philosophy for capital deployment and capital distribution remains unchanged.

We've entered the year with strong capital ratios at or above our management target of approximately 5.5% to 6% Tier 1 leverage and approximately 11% CET1. And assuming interest rates follow marks implied forwards, we expect to generate additional excess capital from the unrealized loss related to AFS securities pulling to par over time.

Wrapping up on Page 20. Over the past year, we conducted thorough strategic reviews, we developed detailed business and financial plans, and we've taken the first steps on what would be a multi-year transformation of our company.

Our business plans drive as achieving what we laid out across our three strategic pillars, be more for our clients, run our company better and power our culture. And our financial plans aim to improve the firm's pre-tax margin to 33% and our ROTCE to 23% over the medium-term, while maintaining a strong balance sheet.

In publishing our medium-term financial targets together with our most important strategic priorities and the actions that will help us achieve them, we are providing transparency to allow you all to track our progress, and we are confident that we will deliver.

We are excited about the work ahead of us and today is an important milestone for our team. Now for those of you who are still with us, we promise to let you start your long weekend soon.

With that, operator, can you please open the line?.

[Operator Instructions] Our first question comes from the line of Brennan Hawken with UBS. Please go ahead..

Good afternoon. Thanks for taking my question, and thanks for all the detail that you provided in the deck on the targets really very, very helpful and very, very thoughtful. I'd love to start there. So it seems as though you guys see a really strong pre-tax margin enhancement opportunity.

Where do you expect that you're going to see the results of that opportunity come through first? And while I appreciate that the targets are over a three to five-year period, is the profile of the improvement that you expect likely to look straight-line? Or is there going to be sort of a more parabolic curve, resulting in more of a back-end weighting? Thanks..

Hi, Brennan. This is Dermot. I'll start off. So the way I kind of think about it, if you take the comments stock both Rob and I have prepared and we've just laid out over the last 30 to 35 minutes, you can see truly that 2023 was a foundational year. We did a lot of kind of exploratory work, detailed planning.

We've made a bunch of investments, both which will drive efficiency and which will drive growth. We've talked over the last few quarters about Wove, which we launched last June, and in my prepared remarks, I talked about $30 million to $40 million of revenue this year.

So I would say we are making investments in all of our segments, and you can also see is in investments in wealth management, where we are beginning to see green shoots, and you can see, we're making a lot of investments in our security and services business, modernizing our platforms.

So I would say you're going to see us quarter-by-quarter and I think over time as you get to know Robin and myself, you'll see us do is and then talk about us rather than pre-announce it and then do it. So we're in execution mode and we will deliver, but you're going to see this happen quarter-by-quarter..

Okay. Thank you very much for that color. I appreciate it. The environment rather different from the last time we spoke. We've seen an indication of the Fed pivot. Everyone is now expecting a far more short-order rate -- policy rates to be declining.

And so we saw an uplift, even though there was only a little bit of averaging in of policy rate a little higher this quarter, we did see an uptick in -- on the deposit cost side.

So what drove that? And then how should we be thinking about the mechanics of the lower policy rate and how that might flow through on the deposit side? And what's captured in your NII outlook for 2024? A few questions in there. Sorry, Dermot..

Yeah. Look, I'm going to say for a follow-on question that was special, yes..

[Multiple Speakers].

Yeah. Hopefully, others won't have to ask the same question again. So, look, if you go back 12 months when we gave our 20% guidance for 2023, there was a disconnect between what the market thought was going to happen in 2023 and what the Fed thought was going to happen in 2023. The market was calling for rate cuts in June of 2023 and the Fed wasn't.

We guided 20%. The year played out very, very differently to what everybody thought was going to happen, and we ended up with a 24% year.

To one of your questions where why did deposit costs go up, I think our NIM for Q4 was in the 1.26% range, and that really is -- balances rolling off and new balances coming on at market rates, and we ran strong to the tape at the year-end.

And look, I have to say how we did on deposits in Q4 was a little bit of one BNY Mellon effort between lines of business, our deposit team, our treasurer and our CIO book. So we feel very good about how we finished the year and we outperformed $1.1 billion of revenue. So all in all, we feel very good about that.

This year again, I think the Fed and the markets are a little bit at odds. We had a Fed commentator talked a couple of days ago about March being too early. Notwithstanding that, the market think there's an 80% probability of a rate cut happening in March.

So we're neutrally positioned in the outlook for 2024 on balance if rates -- if the rates happen -- happen this year, we might expect balances to go up. If it's higher for longer, we expect people to optimize and we say continued outflow of deposits. Well, we started the year strong with $273 billion of average deposits in Q4.

We feel good about our NIM for 2024. So we feel we're set up nicely but the balance of outcomes we think down 10% for 2024..

Okay. Thanks for taking my questions and thanks for the patience with multiparter..

Our next question comes from the line of Mike Mayo with Wells Fargo Securities. Please go ahead. Mr. Mayo, your line is unmuted. Please go ahead. Check your mute button..

Mike, we can't hear you. So we'll come back to you. Maybe we have an issue connecting..

Actually, I'm here.

Hey, can you hear me now?.

Yeah. Just in the nick of time.

Okay. Okay, just made it. So let me see if I did okay in my math class in school. So in 2024, you're guiding for flat expenses, flat or higher operating leverage. NII down 10% that implies fees up 3%.

So did I do my math correctly? And if I did it correctly, why only up 3%?.

So, Mike, it's Robin. And we're not going to quibble with your math or with your English comprehension either from our commentary. You've gotten right what we said. We've intentionally not guided on fees because of the nature of the year and we recognize that there were a lot of different inputs to that.

So we recognize that a year can in fact turn out in various different ways. We feel committed to the flat to plus on the operating leverage that we've committed to, and we've guided to how we think the other things are going to play out. And so that was quite deliberate and we're focusing you on the things that we've talked about.

But obviously, from a math point-of-view, we understand how the math works..

The more important question would just be your medium-term target to take your returns to 23% up from 21% last year, I guess, 21.5% or so this past year.

How do you define the medium-term? And for that 150 basis point increase from here, how would you segment that like it efficiency, revenues, buybacks or some other way just to give us like a simple waterfall chart inwards?.

So the way I would think about it, Mike, is, you know not to give you a kind of a weak answer really is all-of-the-above.

And if you think about fee revenue, we're very focused on higher organic growth, and we said about that and we've made a lot of mention about the Chief Commercial Officer, one BNY Mellon and kind of just generally de-siloing the organization. And we really feel optimistic about being able to deliver over time higher organic growth.

Also in 2023, you know FX volumes around the world and volatility was lower and so we expect FX revenue that to normalize, which give us a boost. And look, we kind of -- we're optimistic about where equity markets are going to go. And so in our plans, we have mid-single-digit equity market appreciation to support that fee revenue growth.

On expenses, look, I think 2023 was a year where we got 50 plus thousand employees on the same page as how Robin and I think about and the management team think about running our company better. We don't talk about cost-cutting or you know headcount layoffs. We talk about what are the things that we need to do to run this company better.

And I think we have 50,000 people aligned with us now and I feel very optimistic through all the projects that we have underway to digitize the firm, automate processes, deliver more for our clients so everything we'll feel together and will do a lot at the same time.

And with all of that, be able to buy back more stock, which will drive us to that higher ROTCE and pre-tax margin that you talked about..

And Mike, I would just add one thing to that, which is we talked at the beginning of 2023, and you pressed us on this and rightly so in 2023, about the fact that we hadn't before managed to tell the improved expense story that we think we actually ended up tailing on in 2023, and that was an important focus.

We also recognize that we were likely to have a good NII year and we took the opportunity of those two things to be able to invest for future fee growth.

We never thought 2023 was likely to be a very strong fee year because the fees take time to be able to generate the return from the investment that we're putting into it through the various different things that Dermot just detailed.

And so we've set ourselves up, we think to now be able to really leverage those investments and that's a 2024, 2025, 2026 story. Now, of course, we will stay focused on NII. We'll absolutely stay focused on efficiencies and expenses.

We think AI will play a story in that over time, probably not a short-term story, but more of a medium-term story, and that's how the whole thing comes together from an operating leverage point of view. So the way we got there in 2023 is probably going to be different than the way we'll get there in 2024.

We're trying to point you to that through the disclosures..

Thank you..

Thank you..

Our next question comes from the line of Brian Bedell with Deutsche Bank. Please go ahead..

Great. Thanks. Good afternoon, folks. Thanks for taking my questions. Again, also, thanks for all the detail around the businesses and long-term outlook as well. If I can focus on Slide 16 in the securities servicing goals there.

How do you think about you know in terms of automating the processes, the first two boxes that drive the cost-to-serve down and then the second one on deepening client relationships? How do you think about the effect of digitizing and automating these processes? And whether sort of matching that against -- you know to what extent you can actually enhance the revenue profile as well? Or are you favoring lowering the cost and not so much enhancing the revenue profile by digitizing the services? Or is there two parts of that where you can also improve the servicing quality?.

Okay. So here's how I would answer that, Brian. So we've -- and I said in my prepared remarks, we've made a loss of through last year and this year in the budget process. We have made a lot of investments in our foundational infrastructure that supports the asset servicing business.

And so that's going to result in greater automation and a better client experience.

We hired a new Head of Operations last year, and he's made a tremendous impact and we're spending a lot of time with our clients through understanding client behaviors where they're able to explain to us what they need and we can then figure out how to change our processes to be more to be automated to deliver their solutions.

So we've made a lot of good progress there. So through driving down the cost-to-serve, we're going to give better client experience, which will then ultimately lead to enhanced revenue and enhanced client experience because the clients will be happy with us. The other thing I would say is for asset serving specifically.

We had our strongest sales quarter in 2023. We come into 2024 with a very healthy uninstalled book of business and we feel very good about the mandates we won in Q4, and we feel very good about the pipeline coming into 2024.

So I feel very, very good about all the leadership changes that we've made in asset servicing over the last 12 months, the hires we've made and the impact that they've made since they've joined. And then within the other part of Securities Services, corporate trust and depositary receipts.

We're making significant investments in corporate trust this year to do a lot more digitization and a lot more automation so we can scale the business and drive that margin higher..

That's a great color. And then just a follow-on on the balance sheet deposit beta and the Fed cuts and maybe if you can also comment on international cuts from the Bank of England and ECB.

How are you viewing your deposit beta on the downside? Do you think within your guidance are you able to move that down commensurately? Or is there a significant lag and does that differ between the US and Europe?.

So just to kind of give you a general framework. Nothing really has much changed quarter-over-quarter. The dollar bulk, which is roughly 75% of the overall portfolio has an 80% beta. As I've said many times, we have sophisticated clients.

They're with us for not just deposits but for a variety of goods and services which feeds the stickiness of our overall deposits being two-thirds operational. So that's a good story. We passed on the prices. As I've said, we -- it will grind a little bit higher from here, but I think I feel pretty good about the dollar book on where that's at.

And then euros and sterling, which make up the balance into 55 to 65 base range. And so as the Fed kind of ultimately will pivot and rates will come down, we do expect that to follow symmetrically and so go downward the same way it came up. So that's how I would view that..

Great. Great. Thank you..

Thanks, Brian..

Our next question comes from the line of Ebrahim Poonawala with Bank of America. Please go ahead..

Hey, good afternoon..

Hey, Ebrahim..

I had a favorable question just around looking at your medium-term targets, and I heard what you said in response to Mike's question on the fee revenue guide for this year. But when I looked at the strategic targets, I guess it's deliberate that we don't have a revenue growth number in there or a revenue growth target.

And I'm just wondering, is that due to the macro or your view on the business where you don't have the line-of-sight around being able to sustain a certain level of revenue growth? And I ask this because I think that's probably the toughest part of the BK investment story is what's the sustainable level of revenue growth.

You gave a lot of details around products and businesses, but would love to hear in terms of how you think one should think about baseline revenue growth in a more or less normal macro-environment over the coming years..

Okay. Thanks for the question, Ebrahim. So I've been here 14 months now, so I'll give you my perspective, right, in terms of my history and I've studied the firm and what we've accomplished over the last 12 months, and how I see the future.

So over the past years, BMI Mellon has delivered organic growth north of 2%, but hasn't done it in a consistent fashion. And so we want to be able to talk to you in a consistent manner and we give you guidance we want to -- know that when we give guidance, you believe that we're going to do it.

So for 2024, we think we're going to turn positive on fee growth. We feel we've set the firm up, but we don't want to kind of give out guidance that has not got a track record of success. And so I've kind of said this in answer to some other questions, asset servicing we feel like we have strong momentum.

We feel we're making the right investments to power that business forward, and that will -- it's our biggest business and so we feel like pre-tax margin is going to go up as a result of efficiency and fee growth.

And then if you take Market and Wealth Services, our most profitable segment Clearance and Collateral Management, Treasury Services, and Pershing, all have mid-40s pre-tax margin and all have good opportunities for growth. But then again, fee growth is a little bit dependent on the market and a big part of it is what happens to the market.

And that guides us to be a little bit more cautious giving you guidance overall on fee growth. But each of our business in terms of the underlying fundamentals, we feel very, very good about..

Ebrahim, I'll just add to that. And we debated this a lot about the fact that you don't have the dollar output guidance on fees. And so as a result, what we've been trying to do is really make sure that we're communicating to you on all of the inputs to that. But as Dermot said, there is both a market impact potential.

We'll have to see how the markets evolve, and there's a bit of a portfolio effect, which is we've really invested in a lot of different places. We have good confidence around the fact that several of those are going to yield something in 2024 and then hopefully continue to yield more in 2025.

But it's hard for us to be able to know exactly what's going to hit and exactly when it's going to hit. So we've got a confidence on a portfolio basis around those investments, but we don't have the absolute line of sight that makes us comfortable to tell you the exact number in the exact quarter that it's actually going to hit.

And so all we can do is show you the inputs and now point to a year of track record in 2023 around the fact that we have, in fact, made progress on the things that we said we were committed to make progress on..

That's helpful. Good color. Thank you. And just a separate question. I mean, I'm sure most investors like the fact that you're going to be buying back stock.

But when you think about, given the sort of run in the stock valuation wise, is there any sensitivity to where you probably don't want to be leaning into buybacks? And secondly, are there other good users of capital, one of them being inorganic M&A driven growth? Or is that just off the table right now?.

So you're right that we have an implied waterfall of how we think about our capital.

And the first is to be able to invest it profitably well in the business, and then towards the bottom of that waterfall is if we have surplus capital after we've taken those things into account, we want to return it to our shareholders, and that's what we've been doing. And so that waterfall hasn't changed in how we think about it.

Now in terms of M&A, right now, we're focused on what we have and how we think that we can improve it. That's really been the story.

Dermot really made the point around running our company better and we think that there's so much opportunity in the franchise to be able to run ourselves better and have the growth that we haven't wanted to distract ourselves with M&A. Now we have a high bar. We've had a high bar. We continue to have a high bar, but we are keeping our eyes open.

And I think that's the right thing to do, particularly for things that would help us to accelerate our delivery. We're not looking at transformation. We're not looking at big pivots, but we are always interested in things that can, in their own way, speed us on the journey that we've laid out to you..

Got it. Thank you for taking my questions..

Our next question comes from the line of Ken Usdin with Jefferies. Please go ahead..

Thanks. Good afternoon. So last year, you guys did a really good job setting a hittable bar on that NII point that you made earlier, and we ended up seeing a nice increase to NII to the end of the year, up to $1.1 billion.

So just wondering, given that you're still setting a new bar to down 10%, which implies definitely like a settling down from the $1.1 billion.

I'm wondering to the prior conversation on rates, just can you help us understand like the cadence of that, the direction of travel, and then with regards to the rates forecast you're building in like when that settles back down and starts to bottom? Thanks..

New yearly guidance, I'm not too sure I really want to commit to quarterly guidance and deposit levels. We finished the year strong. That was a variety of factors. As I said in my prepared remarks, we had four months of consecutive growth. I talked at Barclays in September. I talked at Goldman in December. We feel very good about the deposit franchise.

We feel very good about what clients are doing with us. And so, you know, we bank it as it comes. But when I sit back and I look out at the macro and this is what we said this time last year, we expected deposits to go down by mid to high single digits, and ultimately it was down 4% for us. That's the trajectory I expect to happen this year.

And so I don't have a particular magic ball on what's going to happen quarter-by-quarter. So I would just take the down 10% and divide it by 4 for your model and just see where that gets you..

Okay, got it. And then as a corollary to that, your comments on the movement to a flattish expense base from a successful plus three last year is a meaningful move, and I know it foots to that point we just ended on, which it still incorporates a down 10% NII.

Presuming we get past this point and NII does get stable and/or and the fee income starts to grow.

I presume you're not trying to point us to a flattish expense trajectory for the longer term future, but maybe you can talk us to how you will manage that positive operating leverage gap relative to needed investments and then the margin targets you just gave us to in terms of how you kind of deal with volatility of the macro environment while getting to that point of seeing those margin target improvements..

So, Ken, it's Robin. I'll start off. Dermot might want to add something. Look, I think about this at a fairly high level of us being focused on positive operating leverage, at least until the point that we get to the sort of margin targets that we're talking about, and there's a little bit of work between here and there.

And we also recognize that each year is going to have unique factors. And so the year in which we have a fairly significant NII jump of the 24% is going to create different conditions.

That allowed us to have a fee year, which was fine but not growing in a meaningful way, and that allowed for some headroom on expenses, which is something that we've used in order to be able to make investments. Now, 2024 is a different year. It's got a different composition, but every one of the years that we faced has each of these inputs.

It has fees, it has NII and it has expenses. And we're trying to be very purposeful around solving for operating leverage in the context of the year that we actually are faced with. And we think that that's the right thing to do, recognizing that markets move around and each year brings -- serves us something different.

We manage what's in our control..

So, Ken, I go a little bit off-script here. It's a bit of a cultural moment for us on just expense management, financial discipline, running our company better. I talked with one of the executive committee yesterday, and he said, Dermot, you have a very high bar for yourself on flat expenses for 2024.

And I said, no, we have a high bar, we as a firm, and that's down to all of us. And we talked to our Managing Director Population earlier today, and we're all in it together about running our company better. And I think that's an important cultural pivot that we've managed to achieve over the last 12 months..

Yeah, got it. Thank you guys. Appreciate it..

Our next question comes from the line of Glenn Schorr with Evercore ISI. Please go ahead..

Thanks very much. So just one big question, if I could. So I think you've been talking about getting clients to do more business with The Bank of New York Mellon, which -- and you're executing on getting them better and you invested a lot. I did hear you today talk about improve the service and then clients will consolidate business.

So my question is high level, it feels -- it's natural and it feels like it's working, but you're putting a lot of effort and expense at improving and modernizing and digitizing your businesses that actually haven't been growing as much and/or need to modernize more and have lower margins to improve them.

But is there any thought towards maybe you're supposed to put capital towards actually your highest profitable business and ones that grow? It's a question on do you need the whole portfolio, basically?.

Yeah. So the short answer to your question, Glenn, is, yes, we do. And as Dermot has laid out, and we've laid out in the materials particularly, there is a subtly different flavor to the investments that we are making in each of our segments. And so in the Securities Services segment, our focus is on the efficiency and cost to serve as well as growth.

We haven't ignored growth, but we recognize that making sure that our margin in that business continues to improve will allow us to be even more competitive because we're the world's largest custodian. We want the benefits of our scale to fully translate into our pricing with customers and the service that we can provide.

So it's got a tilt towards efficiency in that business, and there's a lot of digitization that can be brought to bear there. We are excited about the medium-term potential of AI. We're excited about the shorter-term benefits of our new leadership team in operations. And the things that Emily and her team are working on are really targeted to that.

But we haven't forgotten about growth in the space, and that's why Dermot mentioned we actually had our best sales quarter at the end of last year in that business. Now, you're right. In our Market and Wealth Services business, which has a margin that, frankly, we're quite happy with and you haven't heard us talk about growing that margin.

We really want to grow that business at that margin, and that's our focus there. So that's really where our drive, drive, drive around more revenues, a lot of our investments around our new business. That's where we built Wove is in that business.

And Dermot talked about the Clearance and Collateral Management business, where we've had very significant growth over the course of this year. He talked about the investments that we're making in our Treasury Services business as well, where we've got new. So that's where we are really wanting to try to grow the overall revenue.

And then in our Investment and Wealth Management business, where we've had higher margin before, and now we've been subject, of course, to the more difficult market environments that's driven it down. But that's a place where we'd like to return to our prior margins.

A little bit of market would help on that, but also some of the structural changes that we've been making, the new product launches that we've been doing, the opportunity to make investment management part of BNY Mellon as opposed to just a separate piece, not availing itself of the $2.5 trillion-plus of distribution we have, which at the end of the day, was completely orphaned previously from the $2 trillion worth of manufacturing.

So the way in which we're solving the problem varies according to the segment..

And what I would add there, Glenn, is it's in my remarks, but we invested $0.5 billion last year in things that we wanted to do that was going to grow the company while keeping our expense growth rate at 2.7%. So we're very disciplined about what we want to do, getting value for money, while at the same time manage the expense base of the firm..

Thanks so much for all that..

Our next question comes from the line of Manan Gosalia with Morgan Stanley. Please go ahead..

Hey, good afternoon.

Can you talk about your assumptions around QT in your NII guide? And are you assuming it continues at the current rate? So if the Fed does slow and doesn't QT early, would that be a big benefit to your deposit growth and to NII?.

So our NII guidance is based on market-implied forward rates at the end of the year with QT continuing. And so with QT continuing, we expect deposits to roll off. If QT were to change, then obviously, we would revisit and see what the benefit of that would be and run our models again, and then we will come and talk to you.

But that is not our base case, QT ending anytime soon..

But on a net basis, that should help the non-interest-bearing deposit balances..

It should help, yeah, but I couldn't give you a sensitivity to it here today, and it's not our base case..

Got it. Okay, great.

And then if you could help us with how we should think about the securities book with six rate cuts? Is there still a large chunk of the securities book that still reprices higher even if we get six cuts?.

So Q4 -- I'll start with Q4. As you will see in the financial supplement, the securities book rolled down by about $4 billion, largely deployed into cash and some mortgages, et cetera. And we had a yield pickup there of about 300 basis points in 2024. We expect the yield pickup from the roll-down to be about 150 basis points to 200 basis points.

So rolling off at about 3% into current market rates. It's very liquid, quite like short in duration. So overall, we feel good about the outlook for the book in 2024..

Great. Thank you..

Thanks, Manan..

Our next question comes from the line of Gerard Cassidy with RBC. Please go ahead..

Goof afternoon, Robin and Dermott..

Hey, Gerard..

Dermot, I know you touched on this with the net interest revenue already in terms of your expectations for 2024 being down 10% following, I think, the forward curve, correct me if I'm wrong there.

If the forward curve is incorrect, currently six rate cuts and it comes in closer to two or three for the year, how does that affect that 10% guidance?.

So I would say the theoretical answer to that is you're higher for longer, and so therefore people will continue to optimize their deposits into higher-yielding assets. So you could see the base case, you know, you could see balances run off more.

But we've kind of analyzed this top down, bottom up, left to right, and so the best guidance we give you is 10%. But if it transpired to be a different number, obviously, the NII number would be different..

Sure. No, understood. Okay. Thank you. And maybe Robin, and I apologize if you guys already talked about this or it's in the deck.

Your new business wins this quarter, what was the dollar amount of that, and what's the installed base that you have for next year?.

So we don't give specific guidance on the installed base or backlogs, but I would say -- look, I said it in answer to an earlier question and it's in my prepared remarks. We had Q4 sales was our strongest of 2023. We won mandates in the Middle East, asset managers, largest clients given us more business.

So, look, we feel very good about what we accomplished in asset servicing in 23, and the team feel very kind of bulled up about 2024 and what the opportunities are in front of them..

Good. Okay, I appreciate it. Thank you..

Our next question comes from the line of Rob Wildhack with Autonomous Research. Please go ahead..

Hi, guys. A couple more on deposits. Dermot, you mentioned a couple of times that you've had four straight months of deposit growth to close 2023. It seems that a lot of the things that would weigh on deposits in 2024 were or already are headwinds in 2023, and yet despite that, you've been able to grow deposits.

So I'm curious if there's anything else that you think might change or become more of a headwind from the last third of 2023 and into 2024? And if there's a possibility or an environment where deposits actually do come in better than what's in the guide?.

So, look, overall, a big part of the deposit base -- our deposit base, too, is NIBs and where that goes. So, look, the reality is Q4 was clients and hard work by our team, and it worked out, and we outperformed by $100 million. And we take it, but hindsight is everything, and it's behind us, so we bank it and we move on.

When I sit here today, and I sat here last January, 2023 didn't turn out the way everybody thought it was going to turn out. And so who knows what's going to happen in 2024, and so there is a lot of uncertainty out there. So I feel very comfortable with the down 10%.

And if that changes to the upside, we're going to be the first people to tell you because we would like it to be not that number. We'd like to be a better number. But that's the number we give you today..

And, Rob, I'll just add. It's easy to forget. We've still got a lot of complexity in the world. As Dermot said earlier on, if QT continues, that's one thing. If QT ends, maybe that's to the plus. You've also had a massive run-up in liquidity over the course of the -- in money market funds and other places.

We have to see how that gets put to work, or not, as the case may be. Stock market therefore becomes a little bit of a wild card as we see the flow of funds. So we've still got the complexity of we talk about the fact that the Fed might cut in March. The Fed talks about the fact that they might not cut in March.

And so there's enough variation in the exact way that this is going to play out. And that's why Dermot answered one of the earlier questions in the way that he did, around our 10% and the path of it because we just don't have that type of visibility, but we do have the sense that we can kind of work the problem to our current guidance..

Okay, thanks. And then I think earlier you mentioned something about deposits that were not yet seasoned or not yet operational, and I was just wondering if you could expand on that.

What's the criteria for a deposit to be considered operational? And then how long does it take for something like that to play out?.

So that's -- there is a very long answer to that, which we can take you through offline. But the general sense of, to be operational, you have to be doing stuff with us in another line of business, and you have to be making payments and you have to be sticky to us as the firm.

And over time, then we classify you as operational in nature, and that helps us on the liquidity ratio standpoint. So if you're a relatively new client and you haven't established that track record, then you're considered nonoperational until such time as you meet those criteria.

But as I said earlier, two-thirds of our deposits overall are sticky, and that's a good fact..

Got it. Thank you, guys..

Thanks, Rob..

Our next question comes from the line of Rajiv Bhatia with Morningstar. Please go ahead..

Great. Can you comment on the pricing environment within your Securities Services segment? I guess [ACA] (ph) was up 9% against flat fee revenue. So is pricing pressure would you say it's stable, or would you say it's intensifying? Thanks..

So, I would say it's overall stable, and it's something that we gave particular focus to last year. And we've gone through it client by client, analyzed client profitability, which clients are profitable, which clients aren't, what we can do in terms of cost to serve, and how do we price on a marginal basis versus a fully loaded basis.

So, over the last twelve months, we've done a lot of foundational work on how we've become more sophisticated in terms of how we price our business and how we talk to clients vis-a-vis pricing. So I would say stable with a positive momentum to it..

Great. Thanks..

And our final question comes from the line of Mike Mayo with Wells Fargo Securities. Please go ahead..

Hi. Thanks for the follow-up. At the Boston bank conference in November, Emily Portney, the Head of your asset servicing business seemed very excited about AI and the implications and the implementation of that in the asset servicing business.

And I'm just wondering if that excitement is shared throughout BNY Mellon, and what you see as potential use cases and the ability to go from pilots to production.

Is it beyond the hype, where is the reality of AI and any specific numbers of what it might be able to do?.

Yeah, Mike. And look, the short answer is, yes, we are excited about AI. We're excited about it. Over the medium term, we stood up in 2023, what we call the AI hub, where we gathered up a bunch of engineers under sort of top talent leadership to really focus on building out a set of capabilities.

They worked with every business and every function in the firm to canvas for use cases. We had hundreds of those. We developed a series of different themes for investment because there's a lot of duplication actually, across the different use cases when you think about them on a fundamental functional basis.

And then these themes for investment are things that we've actually been investing in. And so we do have things in production. We actually have a piece of software today that is creating predictions for clients in our treasuries business, actually, that looks at fails. We've talked about that before.

That's a good example, and that was a very early AI implementation that we made. And it's actually a piece of software that we currently earn some revenue on as part of our CCM business. It also contributes more broadly to market stability, and it's a great client service.

On the flip side of that, the question is going to be, well, for an organization which has as many processes as we have and people performing processes, there's going to be an opportunity there to create more efficiency. And so we've invested in and are investing in that space as well.

We're also investing in the employee experience, the opportunity to have AI do tasks which are mundane or repetitive.

In one particular case, it's helping our research team get a march on the day, so rather than getting up at 04:00 o'clock in the morning to write research, they get up at 06:00 o'clock in the morning to write research because the AI has given them a rough draft to start with and served up a bunch of data for them.

So there are all sorts of different things. Now, we haven't put it into numbers and so it's not directly in our outlooks in terms of the way that we're thinking about it. But it would not surprise me if this is something that over the course of the next decade is going to be able to provide benefit on the top line and the bottom line.

And so we're doing exactly what Dermot said before. We're not talking too much about things that we're still working on, that we can't give you a line of sight into the exact input, but I'm answering the question because you asked it. But we are excited about this under the hood, for sure..

All right. Thank you..

You're welcome..

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

Thank you, operator. I'd like to close by reiterating that 2023 was an important foundational year for us and that the multiyear transformation of our company is off to a good start. As we begin our company's 240th anniversary year, we're excited about the opportunity ahead of us.

I'm immensely proud of everything that our people here at BNY Mellon got done over the past twelve months. I'm grateful to our clients who are leaning into their relationships with BNY Mellon and allowing us the opportunity to serve them in even greater ways.

And I appreciate the faith and support that our investors, old and new, have placed in BNY Mellon. Marius and the IR team stand ready to assist you should you have any questions. Be well and enjoy the long weekend..

Thank you. This does conclude today's conference and webcast. A replay of this conference call and webcast will be available on the BNY Mellon Investor Relations website at 5:00 PM Eastern Standard Time today. Have a great day..