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ANNUAL

REPORT
2021
We made significant progress in 2021
executing on a compelling agenda for
transformation and growth, building on
an already exceptional foundation.
Having served BNY Mellon for over 36 years, I’m excited to see our company
enjoying a renaissance. Early into my tenure as CEO, with a new leadership
team in place and renewed clarity of purpose, we activated a compelling agenda
for transformation and growth on an already exceptional foundation. Doing so
required us to adopt a digital and data mindset and evolve our culture.
This agenda and the strength of our franchise were tested by unprecedented
global market volatility early in the pandemic. Our people stepped up and
delivered, as they always have, allowing us to make significant progress in our
journey to position BNY Mellon for the future.

Leading with innovation and earning trust every day — these principles guide
us and fuel our purpose of powering individuals and institutions to succeed
across the financial world. That’s why it’s rewarding to know that we have
continued to become more strategic and relevant to our clients over the
past year, and we now find ourselves uniquely positioned to deliver greater
value and play an even more substantial role in the global financial ecosystem.
BNY Mellon is a pioneer of modern-day capital markets, so this bold intention
should come as no surprise.

I’m proud to share that we are successfully executing against our


strategy — as our accomplishments and financial results will show.

ANNUAL REPORT 2021 III


The heart of our strategy is to be an
open platform on which clients can build
their businesses, offering best-in-class
services, technology and data.

A WINNING STRATEGY
BNY Mellon plays a critical role as a central orchestrator in the global
financial ecosystem, touching in excess of 20% of investable assets globally.
We are the world’s largest custodian, with nearly $47 trillion assets under
custody and/or administration (AUC/A); we clear about $10 trillion of securities
and process over $2 trillion of payments per day; and we manage $2.4 trillion of
assets on behalf of our Investment and Wealth Management clients. This unique
view across the financial industry, along with exceptional client relationships
that in many cases allow us to reach deep into their day-to-day operations, gives
us breadth and insights that other companies can’t replicate.

The heart of our strategy is to be an open platform on which clients can


build their businesses, offering best-in-class services, technology and data.
As global markets become increasingly complex and data-centric, clients are
looking to us to help them transform their operating models and orchestrate
broader, front-to-back solutions — using data to power their front offices, and
deliver efficiencies and reduce risks in their middle and back offices.

Our effectiveness in engaging clients more holistically about their needs


opens the door for discussions about the complete set of solutions that only
we can bring. Last year we introduced ONE BNY Mellon, an initiative that

II BNY MELLON
mobilizes cross-functional leadership teams in key markets to strengthen enterprise
collaboration and deliver a unified market presence. Our aim is to facilitate
information sharing and cross-company client referrals to help us deliver holistic
solutions and deepen relationships with our largest vendors. In a recent example
of ONE BNY Mellon in practice, our Data and Analytics Solutions, Pershing and
Wealth Management businesses came together to help clients optimize product
development and distribution.

Over the past year, we made a number of critical, strategic investments in


innovation, and I am incredibly proud of the industry-leading products and
services that we announced and launched to drive further growth.

ANNUAL REPORT 2021 III


Digital Assets
Early in 2021 we formed an enterprise Digital Assets unit to accelerate
the development of solutions and capabilities related to digital assets,
including cryptocurrencies. In our quest to build the industry’s first
multi-asset platform that bridges digital asset custody, execution and
administration seamlessly with traditional assets, we are leveraging our
digital expertise from across the firm and collaborating with leading tech
companies. Distributed ledger technology has the potential to transform
areas like custody, collateral management, equity and debt issuance, and
we are making progress across a number of potential use cases.

In the meantime, we have become a leader in servicing digital asset


funds. Currently, BNY Mellon is providing fund services for digital
asset-linked products, including those from Grayscale Investments,
the world’s largest digital asset manager, and we service most of the
cryptocurrency funds in Canada.

The Future of Collateral


As the world’s largest, truly global collateral manager, managing
$5 trillion in collateral worldwide, we are leading the industry towards
greater collateral mobility and optimization. Two years ago, we announced
The Future of Collateral, an initiative to deliver new capabilities, new
interoperability opportunities, and significant funding savings for clients.
By the end of last year, we had launched a distinct, unified collateral
management platform that enables clients to use their U.S.-based
assets to support trading objectives in Europe and implemented
“active/active” processing to help improve resiliency and recoverability.
With these enhancements, clients can capitalize on full substitution
capabilities between the U.S. and Europe, harmonized reference data
and one unified credit model, helping to improve efficiency in their
collateral activities.

We also see opportunities for tokenization to mobilize illiquid assets


and improve transparency and efficiency, so our Collateral Management
business is partnering closely with our Digital Assets unit to explore
leveraging blockchain technology to increase collateral availability.

IV BNY MELLON
Real-Time Payments
We continue to play a leading role in driving the proliferation of real-time
payments in the U.S. You may remember that in 2017 we were the first bank
to originate a payment on The Clearing House’s Real-Time Payments Network.
Late last year, we were the first to launch a real-time, electronic bill-pay
solution for billers and their customers. We are live with Verizon, our first
client, and the long list of prospects for this particular capability is growing.
Due to our unconflicted role as the bank of banks, we are also uniquely
positioned to white label real-time payments and ancillary services to regional
banks across the country. We are pleased with the initial uptake
and see a compelling revenue opportunity over the next few years, not only
with other large billers and regional banks, but also brokerage firms and
insurance companies.

Pershing XSM
BNY Mellon’s Pershing is a leading technology and platform provider for our
wealth clients and a valuable platform for asset managers — many of which
are broader enterprise clients — to reach both advisors and investors making
investment decisions. At year’s end, Pershing investor accounts held over
$1 trillion of assets placed by asset managers. Last fall, we embarked on
one of our most ambitious, multiyear initiatives yet and launched Pershing X,
a new business unit that will design and build innovative solutions to
transform the growing advisory marketplace.

Pershing X is our answer to the challenges clients have in managing multiple


and disconnected technology tools and data sets for their advisors. Our
comprehensive set of advisory capabilities — from models to trading to
performance reporting — will be fully integrated with Pershing’s clearing
and custody services to create exceptional experiences for clients.
Over time, we believe that the Pershing X offering will be a meaningful
source of incremental growth for the firm.

ANNUAL REPORT 2021 V


We made significant progress across our enterprise in 2021, but we have a
lot more to do. You can expect to see ongoing innovation as we develop new
products and services, while collaborating with third parties and investing in
strategic alliances to complement our offerings.

At the same time, we must also continue to optimize our operating model.
In 2021, we made some progress here, for example, generating over
$300 million of efficiency savings across the company and driving higher
productivity in Operations. We also sold certain sub-scale, lower-growth
businesses in Pershing and Wealth Management. In Investment Management,
we streamlined our investment firms offering to enhance their respective
specialist capabilities and strengthened their research platforms and global
reach to deliver the outcome-focused solutions that our clients expect.
We remain laser focused on opportunities that will drive greater efficiency,
reduce bureaucracy and enable sustainable growth in 2022 and beyond.

VI BNY MELLON
SOLID AND IMPROVED
FINANCIAL PERFORMANCE

+8%
In 2021, we benefited from strong equity markets, a significantly improved
credit environment and, importantly, a meaningful step-up in organic
growth across our businesses, while we weathered the impact of a full year DILUTED EARNINGS
PER SHARE
of low interest rates. Overall, we delivered a solid and improved financial
performance. Diluted earnings per share increased by 8% to $4.14.

Revenue of $15.9 billion was up 1%, as the benefit of higher equity markets
and accelerated organic growth more than offset the negative impact of $15.9B
lower interest rates on net interest revenue and fee revenue in the form of REVENUE
higher money market fee waivers. Fee revenue was up 4%, or 9% excluding
the impact of fee waivers,1 highlighting the strong and broad-based

+9%
underlying growth across our businesses. We are also very pleased with the
performance of our strategic equity investments. Our solutions-oriented
investments and strategic alliances with Fintechs continued to drive FEE REVENUE
efficiency and offer more powerful solutions for our clients. They are yielding EXCLUDING FEE WAIVERS1

compelling financial returns, as well.

Expenses were up 5%. We made significant investments to drive further


growth, for example in areas such as digital assets, data and analytics, and
real-time payments, while we continued to optimize our operating model to
$5.7B
CAPITAL RETURNED
drive further efficiencies. TO SHAREHOLDERS

Our pre-tax operating margin of 29% and our return on common equity and
return on tangible common equity1 of 9% and 17%, respectively, were solid
and roughly in line with the prior year.

MEANINGFUL RETURN OF CAPITAL


Throughout the year we continued to generate significant capital, and
when the Federal Reserve ended restrictions on bank holding company
dividends and share repurchases at the end of June, we accelerated our
return of excess capital to shareholders. In July we increased our quarterly
dividend by 10% to $0.34 per share and, in the second half of the year, we
repurchased $3.2 billion of common stock. Overall, we returned $5.7 billion
of capital — 160% of earnings — to you through $1.1 billion of dividends
and $4.6 billion of share repurchases in 2021.

Note: All percentage changes are against full-year 2020 results, unless otherwise noted.
1
See Supplemental Information — Explanation of GAAP and Non-GAAP financial measures,
beginning on page 103 for the reconciliations. ANNUAL
ANNUALREPORT
REPORT2021
2021 VII
In the fourth quarter of 2021, we
began reporting our financial
performance along new business
segments that align closer to how
we manage the firm.
STRONG UNDERLYING GROWTH
ACROSS OUR BUSINESSES
In the fourth quarter of 2021, we began reporting our financial
performance along new business segments­— Securities
Services, Market and Wealth Services, and Investment and Wealth
Management­— that align closer to how we manage the firm.
Our new segmentation further highlights the breadth of our businesses,
which is a true competitive differentiator, and enables you to track
our performance against our strategic priorities at a more granular
level going forward.

2021 REVENUE 2021 PRE-TAX INCOME


FIRMWIDE $15.9B FIRMWIDE $4.6B

25% 26%
33%
45%

30% 46%

SECURITIES SERVICES
MARKET AND WEALTH SERVICES
INVESTMENT AND WEALTH MANAGEMENT

Note: Total revenue and pre-tax income attributable to the Other segment
were $(108)mm and $(252)mm, respectively.

ANNUAL REPORT 2021 IX


Securities Services

Our Securities Services segment includes our Asset Servicing business, which
provides global custody, fund accounting, integrated middle-office solutions,
transfer agency and data and analytics solutions. It also includes Issuer Services,
comprising Corporate Trust, one of the world’s largest trustees for corporate,
municipal and structured credit securities, and Depositary Receipts, one of the
leading administrators for sponsored depositary receipts programs globally.

Securities Services is our largest segment by total revenue, and we are


intensely focused on enhancing its profitability in the coming years.

Low interest rates continued to weigh on revenues in 2021, both net interest
revenue and fee revenue, as most of the fees related to the distribution of
money market funds were waived to protect the investors in these funds from
negative returns.

That being said, we saw a meaningful uptick in organic growth across our
Asset Servicing and Issuer Services lines of business.

In Asset Servicing our consistent investments in digitization, an open-architecture


platform and higher service quality are increasingly paying off and driving new
business with existing and new clients. Wins were up almost 50% compared
to 2020, producing a meaningful pipeline of AUC/A for 2022 and beyond. We
are winning larger and more complex business, which reflects the value of our
broader capabilities, including our differentiated data and analytics offering.

Issuer Services solidified its position as a global leader across Corporate Trust
and Depositary Receipts. Amid record collateralized loan obligation issuance
activity, we reaped the benefits of the actions we took over the last couple of
years to enhance our sales and service teams and to upgrade our technology
platforms. We also benefited from a normalization of depositary receipt issuance
activity and the resumption of dividend payments to above pre-pandemic levels.

All of the above translated into a pre-tax margin of 21% in 2021. We have developed an
ambitious but realistic plan to reach an over 30% pre-tax margin in the medium term.
We expect a more normal interest rate environment will get us about halfway there,
but we also plan to accelerate growth in higher-margin areas, such as alternatives
and ETFs, and we are doubling down on initiatives to drive further efficiencies.

X BNY MELLON
Market and Wealth Services -

Market and Wealth Services comprises industry leaders Pershing and


Clearance and Collateral Management, and our scaled Treasury Services
business. Our highest-margin segment, it produced roughly 30% of the
firm’s revenue but over 45% of the firm’s pre-tax income in 2021.

Pershing is an exceptional business that enables us to differentiate


ourselves in several ways. We have an open-architecture approach to
technology and products, and offer both bank and brokerage custody
through a single front end to accommodate sophisticated investor
requirements. Backed by BNY Mellon, Pershing can offer enterprise
solutions like lending. And we are the only business-to-business service
provider in the market — put differently, we do not compete with our clients
for business as other providers do. The strength of our capabilities and our
unconflicted role in the market continue to resonate with clients. In 2021,
we gathered record net new assets of $160 billion and active clearing accounts
continued to grow in the mid-single digit percentage range.

Our Clearance and Collateral Management business plays a central role in


the global financial ecosystem as the largest provider of both clearance and
collateral management in the world. Our position in clearance is truly unique:
we are the primary provider of settlement services for U.S. Treasury securities.
In 2021, we processed approximately $10 trillion of clearance value per day and
ended the year with a record $5 trillion of collateral on our platform. As noted
above, following investments in state-of-the-art technology, our collateral
platform enables the movement of assets across all BNY Mellon regions and
helps clients mobilize new asset classes all over the world. Our enhanced
capabilities, together with the complementary services we deliver through
alliances with leading Fintechs, will benefit our clients and fuel growth for
years to come.

Treasury Services provides global payments, liquidity and trade finance


solutions for banks, non-bank financial institutions, corporates and
public sector entities. Amid a growing, high-margin and still highly
fragmented global market, Treasury Services is increasingly recognized

ANNUAL REPORT 2021 XI


for its innovative solutions. Following a number of significant
investments over the last couple of years, we successfully reinvigorated
this business and positioned it for sustainable growth, most notably
by modernizing our U.S. dollar payments platform, enhancing liquidity
tools and embracing real-time payments early on. As payment
volumes recovered to above pre-pandemic levels last year, we
processed $2.3 trillion in payments on an average daily basis, up
20% compared to the prior year. We continued to help our clients
accelerate their digital journey, and we are shifting our product mix
towards higher value-added channels.

XII BNY MELLON


Investment and Wealth Management

Our Investment and Wealth Management segment comprises Investment


Management, one of the world’s largest asset managers, and Wealth
Management, which ranks among the top 10 private banks in the U.S.

On the back of strong equity markets and continued delivery against our
growth initiatives, the business delivered good results in 2021. Despite the
headwind from higher fee waivers, Investment and Wealth Management
revenue grew by 9%, or 15% excluding the impact of money market fee
waivers.2 We also delivered a meaningfully improved pre-tax margin of
30%, compared to 26% in the prior year.

AUM increased by 10% to $2.4 trillion, benefiting from higher equity


market levels and strong net inflows into fixed income, liability-driven
investments and cash strategies. Overall, net inflows into long-term
strategies were the highest since 2017, and our cash strategies saw the
highest net inflows in over a decade. Similarly, client assets in Wealth
Management increased by 12% to $321 billion, reflecting higher equity
market levels and strong net inflows, too.

Investment Management continued to deliver consistently strong investment


performance. Our commitment to offering clients more product choice is
resonating, and the investments we’ve made to optimize our investment firm
line-up and modernize our operating model leave us well positioned to drive
organic growth. Our initial suite of passive ETFs, launched in 2020, surpassed
$1.1 billion of AUM and assets in our responsible investment funds increased
by almost 60%.

Wealth Management continued to progress our strategy to accelerate


client acquisition, expand the investment and banking offering, and invest
in technology to drive efficiency. In 2021, we acquired significantly more
new-client relationships than in the prior year and gained further traction in
the larger, faster-growing client segments. Our expanded banking offering,
on both the lending and deposit sides, drove a meaningful uptick in the
percentage of Wealth Management clients who also bank with us, and our
excellence in innovation, advice, thought leadership and digitalization was
recognized by industry awards throughout the year.

2
See page XXII for reconciliation of Non-GAAP measures. ANNUAL REPORT 2021 XIII
COMMITMENT TO EXCELLENCE
Time and time again, clients have told me that our employees are
BNY Mellon’s greatest asset, and I couldn’t agree more.

Our people play a critical role in advancing BNY Mellon’s growth


agenda. It’s up to us to realize our vision to be the trusted
financial institution for clients and employees. Trust shapes
OUR VALUES our value proposition, deepens relationships, and grants us
AND BEHAVIORS opportunities to grow the business. Few are in a position to
define trust. But we are.
Passion for Excellence
We get it done. We’re creating more opportunities for career development and

We strive to be extraordinary. mobility — in fact, this is a ONE BNY Mellon value proposition
for employees — and we’re improving experiences by investing
Integrity in new technology capabilities that drive performance. We also

We do what is right, always. introduced the Meeting You in Your Life Moments initiative,
which encompasses programs that enable life balance, resilience
We challenge each other — even
when it is uncomfortable. and productivity.

We refreshed and codified our values, and the behaviors expected


Strength in Diversity
of each of us, so that no matter our role, we know how to deliver
We seek out who is missing and exceptional outcomes.
help everyone feel included.
We invest in each other’s success. Perhaps our biggest priority is to foster a diverse, inclusive
environment that reflects our vibrant society, inspires a sense
Courage to Lead of belonging and gives everyone a fair opportunity to achieve

We take risks necessary to lead. their potential.

We grow and move on from failures. We have tangible metrics to attract, advance and retain diverse
talent. We set concrete, short-term goals to accelerate progress
in our most underrepresented ethnic/racial talent populations in
the U.S. and position our firm as a competitive choice with Black
and Hispanic/Latino graduates and experienced professionals. As
I stated in our 2020 report, our goals are to increase the following
in the U.S. by year end 2023:

• Black representation by 15% to 12%


• Black representation of senior leaders by 30% to over 4%
• Hispanic/Latino representation by 15% to almost 8%
• Hispanic/Latino representation of senior leaders
by 30% to over 5.5%

XIV BNY MELLON


We’ve also pledged to increase women's representation in the EMEA
region to 33% by 2025, from 28%, with an emphasis on improving senior
and mid-level leader pipelines.

Our gender equity efforts have led to some bright spots, with year-over-year
growth in women among new hires and senior leaders globally, and an increase
in women representation on our Board. In fact, our slate of independent
directors is one of the most diverse in the industry and among large public
companies, with 31% women and 39% of underrepresented ethnic/racial
backgrounds. Among the members of my leadership team, 39% are women
and 28% are from underrepresented ethnic/racial backgrounds. I’m proud of
the diversity in our leadership, and aware we have much work to do to make
similar progress throughout our workforce.

Since increased diversity alone won’t improve an organization, we have


been equipping our people with the skills to recognize when others are
missing or excluded and to bring them into the conversation. For example,
we offered additional training for managers to strengthen inclusive hiring and
performance management capability, and delivered continuous learning at
scale through Diversity, Equity & Inclusion Academy courses, best practice
guides and team-building resources. This year, we will be initiating inclusion
efforts to better engage with and create career paths for neurodiverse talent,
including those on the autism spectrum.

Employees themselves are leading the way for better inclusion and visibility.
One in four employees is a member of a BNY Mellon employee or business
resource group (E/BRG), which are formed around shared characteristics
and open to all. E/BRGs collaborated with our Office of Diversity, Equity and
Inclusion to host meaningful conversations and workshops about implicit
bias, intersectionality, allyship and belonging. The groups also engaged with
professional organizations, nonprofits and institutions such as historically
Black universities and colleges to widen our recruiting, develop top talent
and make an impact in our communities.

In an increasingly diverse world, the future belongs to the inclusive enterprise.


That’s the challenge we’re rising to, and why we are ensuring that diversity,
equity and inclusion are woven into the fabric of our organizational culture.

ANNUAL REPORT 2021 XV


BNY Mellon has a significant
opportunity to make a positive impact
on the environment and our society,
which in turn supports our
business objectives.

XVIII BNY MELLON


OUR POSITIVE BUSINESS IMPACT
As a major global financial institution, BNY Mellon by planting over 100,000 trees. Our Corporate Trust
has a significant opportunity to make a positive business continues to be the leading trustee for
impact on the environment and our society, which in green bonds by deal volume, administering more
turn supports our business objectives. Through our than 100 new green bond issuances totaling close
culture and purpose, and responsible business and to $65 billion in 2021.
global citizenship initiatives, we strive to be agents
Last year, BNY Mellon was once again included on
of change and a catalyst for the betterment of our
the CDP Climate Change “A-list”, a prestigious list
company and our communities.
recognizing exceptional leadership in corporate
We are using our reach, market influence and sustainability, having reduced our greenhouse
resources to address pressing global environmental, gas emissions by an incremental 16% in 2020
social and governance (ESG) concerns. Last year, we compared to a 2018 baseline. We were one of only
launched our holistic Future First SM
ESG framework, 200 companies of 13,000 respondents to make the
which guides our own enterprise practices and list, and the only U.S.-based financial institution to
conduct, underpins the strength of our client earn the “A” grade for nine consecutive years.
solutions and establishes a platform for thought
In addition, we were included in the S&P Dow Jones
leadership. We also announced a collaboration with
SustainabilityTM Index for the eighth consecutive
the Yale Initiative on Sustainable Finance to address
year; the FTSE4GOOD Global Benchmark Index for
the need for quality, relevant and transparent
the 10th consecutive year; the Bloomberg Gender-
ESG information — which ultimately benefits the
Equality Index for the seventh consecutive year; the
investing interests of asset owners, institutional
Disability:IN Disability Equality Index for the third
investors, corporates and issuers in depositary
consecutive year; and the Human Rights Campaign
receipts, many of which are clients.
Corporate Equality Index for the 15th consecutive year.
BNY Mellon is committed to addressing the data
We continued delivering pay equity for both women
challenges that can hinder the acceleration of the
and U.S. employees from underrepresented ethnic/
global transition to net zero emissions. Last year,
racial backgrounds, and, as noted previously, made
we joined OS-Climate’s community of Fortune 500
progress against our expanded representation goals
businesses and financial services firms building
and accountability framework for underrepresented
a public platform of open data and open-source
ethnic/racial populations.
decision-making tools that will help users to align
financial and investment portfolios to climate goals. We embrace our responsibilities and strive to
contribute to sustainable economic growth that
We take pride in addressing our global challenges
protects healthy markets, enhances our own
proactively. We achieved carbon neutrality in our
business resiliency and longevity, and delivers
operations for the seventh consecutive year and
positive impact for you, our clients, employees
paper neutrality in India and the U.S. for the fifth
and communities.
consecutive year via a certified offset program and

ANNUAL
ANNUALREPORT
REPORT2021
2021 XVII
XIX
We work together every day
to deliver the best possible
outcomes to our stakeholders
and realize the full potential
of our great company.
THE NEXT CHAPTER
Looking ahead to 2022, our business is strong, and our focus
is clear. We’re building on an already great franchise, one with a unique
and differentiated business model, an enviable client roster and a
talented and diverse global workforce. We remain deeply committed
to our purpose of being a trusted steward of our clients’ businesses and
to supporting the efficient functioning of global markets.

We have an amazing journey ahead of us, and I am confident in our ability


to continue to deliver sustainable growth for our shareholders.

I’d like to thank our highly engaged Board of Directors for their support
and counsel — their diverse perspectives have proven invaluable to our
team. And I am incredibly grateful to and proud of my talented colleagues
around the world, including my partners on the Executive Committee, all
of whom work together every day to deliver the best possible outcomes to
our stakeholders and realize the full potential of our great company.

Sincerely,

Thomas P. (Todd) Gibbons

ANNUAL REPORT 2021 XIX


-

XX BNY MELLON
FINANCIAL HIGHLIGHTS
The Bank of New York Mellon Corporation (and its subsidiaries)
(dollar amounts in millions, except per common share amounts and unless otherwise noted) 2021 2020

SELECTED INCOME STATEMENT INFORMATION


Fee and other revenue $ 13,313 $ 12,831
Net interest revenue 2,618 2,977
Total revenue 15,931 15,808
Provision for credit losses (231) 336
Total expenses 11,514 11,004
Income before income taxes 4,648 4,468
Net income applicable to common shareholders of
The Bank of New York Mellon Corporation $ 3,552 $ 3,423

Earnings per common share – diluted $ 4.14 $ 3.83


Cash dividends per share $ 1.30 $ 1.24

FINANCIAL RATIOS
Pre-tax operating margin 29% 28%
Return on common equity 8.9% 8.7%
Return on tangible common equity – Non-GAAP (a) 17.1% 17.0%

KEY METRICS AT DECEMBER 31


Year-end assets under custody and/or administration (“AUC/A”) (in trillions) (b) $ 46.7 $ 41.1
Year-end assets under management (in billions) (c) $ 2,434 $ 2,211

BALANCE SHEET AT DECEMBER 31


Total assets $ 444,438 $ 469,633
Total deposits 319,694 341,545
Total The Bank of New York Mellon Corporation common shareholders’ equity 38,196 41,260

CAPITAL RATIOS AT DECEMBER 31


Consolidated regulatory capital ratios:
Common equity Tier 1 (“CET1”) ratio (d) 11.2% 13.1%
Tier 1 capital ratio (d) 14.0 15.8
Total capital ratio (d) 14.9 16.7
Tier 1 leverage ratio 5.5 6.3
Supplementary leverage ratio (“SLR”) 6.6 8.6 (e)

MARKET INFORMATION AT DECEMBER 31


Closing stock price per common share $ 58.08 $ 42.44
Market capitalization $ 46,705 $ 37,634
Common shares outstanding (in thousands) 804,145 886,764

(a) Return on tangible common equity, a Non-GAAP measure, excludes goodwill and intangible assets, net of deferred tax liabilities. See “Supplemental Information – Explanation
of GAAP and Non-GAAP financial measures” beginning on page 103 for a reconciliation.
(b) Consists of AUC/A primarily from the Asset Servicing business and, to a lesser extent, the Clearance and Collateral Management, Issuer Services, Pershing and Wealth
Management businesses. Includes the AUC/A of CIBC Mellon Global Securities Services Company, a joint venture.
(c) Excludes assets managed outside of the Investment and Wealth Management business segment.
(d) For our CET1, Tier 1 capital and total capital ratios, our effective capital ratios under U.S. capital rules are the lower of the ratios as calculated under the Standardized and
Advanced Approaches, which for Dec. 31, 2021 was the Standardized Approach, and for Dec. 31, 2020, was the Advanced Approaches.
(e) Reflects the temporary exclusion of U.S. Treasury securities from the leverage exposure used in the SLR calculation which increased our consolidated SLR by 72 basis points
at Dec. 31, 2020. The temporary exclusion ceased to apply beginning April 1, 2021.

ANNUAL REPORT 2021 XXI


SUPPLEMENTAL INFORMATION
Explanation of GAAP and Non-GAAP financial measures
We have included in this letter to shareholders certain Non-GAAP measures of fee revenue and total reveue,
which exclude money market fee waivers. We believe that these measures provide useful information to
investors for evaluating the impact of current interest rates and market conditions on fee revenue growth rates
and the performance of our business. We also presented the return on tangible common equity — Non-GAAP,
which excludes goodwill and intangible assets, net of deferred tax liabilities. We believe that this measure
provides useful information for investors because it presents a measure of those assets that can generate
income. See below and Supplemental Information — Explanation of GAAP and Non-GAAP financial measures,
beginning on page 103 for the reconciliations.

INVESTMENT AND WEALTH MANAGEMENT BUSINESS SEGMENT


TOTAL REVENUE RECONCILIATION 2021
(dollars in millions) 2021 2020 vs. 2020

Total revenue $ 4,042 $ 3,692 9%


Less: Money market fee waivers (315) (104)
Total revenue, excluding money market
fee waivers – Non-GAAP $ 4,357 $ 3,796 15%

XXII BNY Mellon


FINANCIAL SECTION

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KPMG LLP
345 Park Avenue
New York, NY 10154-0102

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors


The Bank of New York Mellon Corporation:

Opinion on Internal Control Over Financial Reporting


We have audited The Bank of New York Mellon Corporation and subsidiaries’ (BNY Mellon) internal control
over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our
opinion, BNY Mellon maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by
the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the consolidated balance sheets of BNY Mellon as of December 31, 2021 and 2020,
the related consolidated statements of income, comprehensive income, cash flows, and changes in equity for
each of the years in the three-year period ended December 31, 2021, and the related notes (collectively, the
consolidated financial statements), and our report dated February 25, 2022 expressed an unqualified opinion
on those consolidated financial statements.

Basis for Opinion


BNY Mellon’s management is responsible for maintaining effective internal control over financial reporting and
for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Report of Management on Internal Control Over Financial Reporting. Our responsibility is to express an opinion
on BNY Mellon’s internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to BNY Mellon in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective internal control over financial
reporting was maintained in all material respects. Our audit of internal control over financial reporting included
obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk. Our audit also included performing such other procedures as we considered necessary in
the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting


A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements
in accordance with generally accepted accounting principles, and that receipts and expenditures of the

KPMG LLP, a Delaware limited liability partnership and a member firm of


the KPMG global organization of independent member firms affiliated with
KPMG International Limited, a private English company limited by guarantee.
company are being made only in accordance with authorizations of management and directors of the company;
and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use,
or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

New York, New York


February 25, 2022

2
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KPMG LLP
345 Park Avenue
New York, NY 10154-0102

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors


The Bank of New York Mellon Corporation:

Opinion on the Consolidated Financial Statements


We have audited the accompanying consolidated balance sheets of The Bank of New York Mellon Corporation
and subsidiaries (BNY Mellon) as of December 31, 2021 and 2020, the related consolidated statements of
income, comprehensive income, cash flows, and changes in equity for each of the years in the three-year
period ended December 31, 2021, and the related notes (collectively, the consolidated financial statements). In
our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of
BNY Mellon as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of
the years in the three-year period ended December 31, 2021, in conformity with U.S. generally accepted
accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), BNY Mellon’s internal control over financial reporting as of December 31, 2021,
based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission, and our report dated February 25, 2022 expressed an
unqualified opinion on the effectiveness of BNY Mellon’s internal control over financial reporting.

Basis for Opinion


These consolidated financial statements are the responsibility of BNY Mellon’s management. Our responsibility
is to express an opinion on these consolidated financial statements based on our audits. We are a public
accounting firm registered with the PCAOB and are required to be independent with respect to BNY Mellon in
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to
assess the risks of material misstatement of the consolidated financial statements, whether due to error or
fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits
provide a reasonable basis for our opinion.

KPMG LLP, a Delaware limited liability partnership and a member firm of


the KPMG global organization of independent member firms affiliated with
KPMG International Limited, a private English company limited by guarantee.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the
consolidated financial statements that were communicated or required to be communicated to the audit
committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication
of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as
a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the
critical audit matters or on the accounts or disclosures to which they relate.

Quantitative component of BNY Mellon’s pooled allowance for credit losses for loans and lending-related
commitments related to higher risk-rated and pass-rated commercial and institutional credits and loans
secured by commercial real estate
As discussed in Notes 1 and 5 to the consolidated financial statements, BNY Mellon’s allowance for credit
losses for loans and lending-related commitments (ACL), is presented as a valuation allowance to loans
and is recorded in other liabilities for lending-related commitments. At December 31, 2021, BNY Mellon had
an allowance for loan losses of $196 million and an allowance for lending-related commitments of
$45 million. BNY Mellon utilizes a quantitative methodology and qualitative framework for determining the
ACL for loans and lending-related commitments that share similar risk characteristics (pooled allowance).
In estimating the quantitative component, BNY Mellon uses models and methodologies that categorize
financial assets based on product type, collateral type, and other credit trends and risk characteristics,
including relevant information about past events, current conditions and reasonable and supportable
forecasts of future economic conditions that affect the collectability of the recorded amounts. The
quantitative component of the ACL for loans and lending-related commitments consists of the following
three elements: (1) a pooled allowance for higher risk-rated and pass-rated commercial and institutional
credits and loans secured by commercial real estate; (2) a pooled allowance for residential mortgage loans;
and (3) an asset-specific allowance involving individually evaluated credits of $1 million or greater. In
estimating the quantitative component of the pooled allowance for higher risk-rated and pass-rated
commercial and institutional credits and loans secured by commercial real estate, BNY Mellon uses a
methodology that applies the probability of default (PD) and loss given default (LGD) to the estimated
facility amount at default. For each commercial and institutional credit, the expected loss considers the
credit’s risk rating. For each loan secured by commercial real estate, the expected loss considers collateral
specific data and loan maturity, as well as commercial real estate market factors by geographical region
and property type. The methodology incorporates a multi-scenario macroeconomic forecast of economic
input variables over a reasonable and supportable forecast period spanning the life of the asset. The
reasonable and supportable forecast period includes both an initial estimated economic outlook component
as well as a reversion component for each economic input variable. In order to capture the unique risks of
the portfolios within the PD and LGD models, and the model used to estimate the facility amount at default,
BNY Mellon segments the portfolio into major components based on risk characteristics of the loans and
how risk is monitored. A portion of the ACL is comprised of qualitative adjustments, based on various
internal and external factors, intended to capture expected losses not reflected in the quantitative models
but are likely to impact the measurement of estimated credit losses.

We identified the assessment of the quantitative component of the pooled allowance for higher risk-rated
and pass-rated commercial and institutional credits and loans secured by commercial real estate as a
critical audit matter. A high degree of audit effort, including specialized skills and knowledge, and subjective
and complex auditor judgment was involved in the assessment of the pooled allowance for higher risk-rated
and pass-rated commercial and institutional credits and loans secured by commercial real estate due to
significant measurement uncertainty. Specifically, the assessment encompassed the evaluation of the
methodology, including the methods and models used to estimate the PD and LGD, the macroeconomic
forecast scenarios and related economic input variables and weighting of each scenario, the reasonable

2
and supportable forecast period, and credit risk ratings for commercial and institutional credits. The
assessment also included an evaluation of the conceptual soundness and performance of the PD, LGD,
and macroeconomic forecast models. In addition, auditor judgment was required to evaluate the sufficiency
of audit evidence obtained.

The following are the primary procedures we performed to address this critical audit matter. We evaluated
the design and tested the operating effectiveness of certain internal controls related to BNY Mellon’s
measurement of the quantitative component of the pooled allowance for higher risk-rated and pass-rated
commercial and institutional credits and loans secured by commercial real estate, including controls related
to the:

x development and approval of the ACL methodology


x development of certain PD and LGD models
x continued use and appropriateness of certain PD, LGD, and macroeconomic forecast models
x performance monitoring of the PD, LGD, and macroeconomic forecast models
x determination and measurement of the significant factors and assumptions used in the PD, LGD, and
macroeconomic forecast models
x determination of the multi-scenario macroeconomic forecasts and their respective weights
x assessment of credit risk ratings
x computation, analysis, and approval of the ACL results, trends, and ratios.

We evaluated BNY Mellon’s process to develop the quantitative component of the pooled allowance for
higher risk-rated and pass-rated commercial and institutional credits and loans secured by commercial real
estate by testing certain sources of data, factors, and assumptions that BNY Mellon used, and considered
the relevance and reliability of such data, factors, and assumptions. In addition, we involved credit risk
professionals with specialized skills and knowledge, who assisted in:

x evaluating quantitative component of the BNY Mellon’s pooled allowance for higher risk-rated and
pass-rated commercial and institutional credits and loans secured by commercial real estate for
compliance with U.S. generally accepted accounting principles
x evaluating judgments made by BNY Mellon relative to the development and performance monitoring of
the PD, LGD, and macroeconomic forecast models by comparing them to relevant company-specific
metrics and trends and the applicable industry and regulatory practices
x assessing the conceptual soundness and performance testing of the PD, LGD, and macroeconomic
forecast models by inspecting the model documentation to determine whether the models are suitable
for their intended use
x testing the reasonable and supportable forecast period to evaluate the length of the period by
comparing to specific portfolio risk characteristics and trends
x testing individual loan risk ratings for a selection of higher risk-rated and pass-rated commercial and
institutional credits by evaluating the financial performance of the borrower, sources of repayment, and
any relevant guarantees or underlying collateral.


We also assessed the sufficiency of the audit evidence obtained related to the quantitative component of
the pooled allowance for higher risk-rated and pass-rated commercial and institutional credits and loans
secured by commercial real estate by evaluating the:

x Cumulative results of the audit procedures


x Qualitative aspects of BNY Mellon’s accounting practices
x Potential bias in the accounting estimate.

Identification and measurement of accruals for litigation and regulatory contingencies


As discussed in Note 22 to the consolidated financial statements, BNY Mellon establishes accruals for
litigation and regulatory matters when those matters present loss contingencies that are both probable and
reasonably estimable. BNY Mellon has disclosed that for those matters described where BNY Mellon is
able to estimate reasonably possible losses, the aggregate range of such reasonably possible losses at
December 31, 2021 is up to $600 million in excess of the accrued liability (if any) related to those matters.

We identified the assessment of the identification and measurement of BNY Mellon’s accruals for litigation
and regulatory contingencies as a critical audit matter. Due to the measurement uncertainty, subjective and
complex auditor judgment was required to evaluate the sufficiency of audit evidence obtained. Specifically,
this assessment included the evaluation of the subjective estimates used to determine the range of
possible exposure and the probability of the predicted outcome based on the particular facts and
circumstances at issue in each of the matters.

The following are the primary procedures we performed to address this critical audit matter. We evaluated
the design and tested the operating effectiveness of certain internal controls related to BNY Mellon’s
process to identify, evaluate and measure accruals for litigation and regulatory contingencies and the
reasonably possible losses. We performed inquiries of BNY Mellon to gain an understanding of any
asserted or unasserted litigation, claims and assessments, and significant changes in individual accruals
for litigation and regulatory contingencies. We performed inquiries of BNY Mellon’s regulators and
examined regulatory reports to gain an understanding of developments of regulatory activity and related
matters that may result in the assessment of regulatory fines or penalties. We obtained and read letters
received directly from BNY Mellon’s internal legal counsel and a selection of external legal counsel that
identified and described BNY Mellon’s potential exposure to certain legal or regulatory proceedings. For
cases that have settled, we performed back-testing analyses of BNY Mellon’s litigation and regulatory
contingency accruals recorded compared to amounts paid. We assessed the accrual for litigation and
regulatory contingencies and evaluated the cumulative results of the procedures performed to assess the
sufficiency of audit evidence obtained. We also evaluated the information included within the disclosures.

We have served as BNY Mellon’s auditor since 2007.

New York, New York


February 25, 2022

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CORPORATE INFORMATION
BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout
the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon
delivers informed investment and wealth management and investment services in 35 countries. As of Dec. 31, 2021, BNY Mellon had
$46.7 trillion in assets under custody and/or administration, and $2.4 trillion in assets under management. BNY Mellon can act as a
single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is
the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.
com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.

CORPORATE HEADQUARTERS TRANSFER AGENT AND REGISTRAR


240 Greenwich Street, New York, NY 10286 EQ Shareowner Services
+ 1 212 495 1784 P.O. Box 64874
www.bnymellon.com St. Paul, MN 55164-0874
www.shareowneronline.com
ANNUAL MEETING
The Annual Meeting of Shareholders will be held on SHAREHOLDER SERVICES
Tuesday April 12, 2022, at 9:00 a.m. Eastern Time, at EQ Shareowner Services maintains the records for our
240 Greenwich Street, New York, NY 10286. registered shareholders and can provide a variety of services
such as those involving:
EXCHANGE LISTING
• Change of name or address
BNY Mellon’s common stock is traded on the New York Stock
• Consolidation of accounts
Exchange under the trading symbol BK. Mellon Capital IV’s 6.244%
• Duplicate mailings
Fixed-to-Floating Rate Normal Preferred Capital Securities (symbol
• Dividend reinvestment enrollment
BK/P), fully and unconditionally guaranteed by BNY Mellon, is also
• Direct deposit of dividends
listed on the New York Stock Exchange.
• Transfer of stock to another person

STOCK PRICES For assistance from EQ Shareowner Services, visit


Prices for BNY Mellon’s common stock can be viewed at www.shareowneronline.com or call +1 800 205 7699.
www.bnymellon.com/investorrelations.
DIRECT STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN
CORPORATE GOVERNANCE The Direct Stock Purchase and Dividend Reinvestment Plan provides
Corporate governance information is available at a way to purchase shares of common stock directly from BNY Mellon
www.bnymellon.com/corporategovernance. at the current market value. Nonshareholders may purchase their
first shares of BNY Mellon’s common stock through the Plan, and
ENTERPRISE ESG shareholders may increase their shareholding by reinvesting cash
Information about BNY Mellon’s commitment to Environmental, dividends and through optional cash investments. Plan details are in a
Social and Governance (ESG) management is available at prospectus, which may be viewed online at www.shareowneronline.com,
www.bnymellon.com/globalimpact. This includes a listing of or obtained in printed form by calling +1 800 205 7699.
our statements and policies, such as our Equal Employment
Opportunity/Affirmative Action policies. ELECTRONIC DEPOSIT OF DIVIDENDS
Registered shareholders may have quarterly dividends paid on
INVESTOR RELATIONS BNY Mellon’s common stock deposited electronically to their checking
Visit www.bnymellon.com/investorrelations. or savings accounts. To have dividends deposited electronically,
go to www.shareowneronline.com to set up your account(s) for
COMMON STOCK DIVIDEND PAYMENTS direct deposit. If you prefer, you may also send a request by mail
Subject to approval of the board of directors, dividends are to EQ Shareowner Services, Shareholder Relations, P.O. Box 64874,
paid on BNY Mellon’s common stock quarterly in February, St. Paul, MN 55164-0874. For more information, call +1 800 205 7699.
May, August and November.
SHAREHOLDER ACCOUNT ACCESS
FORM 10-K AND SHAREHOLDER PUBLICATIONS BY INTERNET
For a free copy of BNY Mellon’s Annual Report on Form 10-K, www.shareowneronline.com
including the financial statements and the financial statement Shareholders can register to receive shareholder information
schedules, or quarterly reports on Form 10-Q as filed with the electronically. To enroll, visit www.shareowneronline.com.
Securities and Exchange Commission, send a request by email BY PHONE
to investorrelations@bnymellon.com, or by mail to Investor Toll-free in the U.S. +1 800 205 7699
Relations at The Bank of New York Mellon Corporation, Outside the U.S. +1 651 450 4064
240 Greenwich Street, New York, NY 10286. The 2021 Annual BY MAIL
Report, as well as Forms 10-K, 10-Q and 8-K and quarterly EQ Shareowner Services
earnings and other news releases can be viewed and printed P.O. Box 64874
at www.bnymellon.com/investorrelations. St. Paul, MN 55164-0874

The contents of the listed Internet sites are not incorporated in this Annual Report.
THE BANK OF NEW YORK MELLON CORPORATION
240 GREENWICH STREET
NEW YORK, NY 10286
UNITED STATES
+1 212 495 1784

BNYMELLON.COM

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