BNY Mellon Announces Intention to Increase Quarterly Common Stock Dividend by 10 Percent to $0.34 per Share and Authorization to Repurchase up to $6.0 Billion of Common Stock

Rhea-AI Summary

On June 24, 2021, the Federal Reserve confirmed BNY Mellon's resilience following the 2021 bank stress test, maintaining its Stress Capital Buffer requirement at 2.5%. The company plans to increase its quarterly cash dividend by 10%, from $0.31 to $0.34 per share, starting in Q3 2021, pending board approval. Additionally, BNY Mellon's board approved a stock repurchase up to $6.0 billion over six quarters. This flexibility is aimed at optimizing capital management while adhering to regulatory standards.

Positive

• 10% increase in quarterly dividend from $0.31 to $0.34 per share, enhancing shareholder value.
• Authorization for $6.0 billion stock repurchase plan, indicating confidence in capital strength.

Negative

• None.

NEW YORK, June 28, 2021 /PRNewswire/ -- On June 24, 2021, the Federal Reserve released the results of the 2021 bank stress test, which demonstrates the resilience and strength of BNY Mellon's business model and capital position. The Federal Reserve also notified the company that its Stress Capital Buffer (SCB) requirement, effective October 1, 2021, will remain 2.5%¹, equal to the regulatory minimum. The Federal Reserve's recent restrictions on common stock dividends and share repurchases applicable to the large banks that are subject to the supervisory stress test, including BNY Mellon, will end after June 30, 2021.

The company intends to increase its quarterly cash dividend on its common stock by approximately 10% from $0.31 to $0.34 per share, commencing as early as the third quarter of 2021, subject to board approval.

Additionally, BNY Mellon's board of directors has authorized the repurchase of up to $6.0 billion of the company's common stock over the six quarters beginning in the third quarter of 2021 and continuing through the fourth quarter of 2022. This new authorization replaces all previously authorized share repurchase plans and, in conjunction with the SCB framework, provides management flexibility to manage the extent and timing of the company's capital distributions. The timing, manner and amount of repurchases is subject to various factors, including the company's capital position and prevailing market conditions.

Todd Gibbons, Chief Executive Officer of BNY Mellon said: "We are pleased with the results of this year's stress test, which once again demonstrate the resilience of our business model and the strength of our balance sheet even under severe stress. We appreciate the flexibility of the SCB framework as it allows for more nimble capital management and a potential increase of share repurchases in the coming months contingent on board approval and market conditions."

¹ BNY Mellon expects that its final SCB will be confirmed by the Federal Reserve later in 2021.

About BNY Mellon
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 March 31, 2021, BNY Mellon had $41.7 trillion in assets under custody and/or administration, and $2.2 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.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, which may be expressed in a variety of ways, including the use of future or present tense language, relate to, among other things, BNY Mellon's repurchases of common stock, common stock dividends, capital base, performance and ability to meet regulatory requirements. These statements are based upon current beliefs and expectations and are subject to significant risks and uncertainties (some of which are beyond BNY Mellon's control). Actual outcomes may differ materially from those expressed or implied as a result of risks and uncertainties, including, but not limited to, the factors identified above and the risk factors and other uncertainties set forth in BNY Mellon's Annual Report on Form 10-K for the year ended December 31, 2020, the Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 and BNY Mellon's other filings with the Securities and Exchange Commission. All statements in this press release speak only as of the date on which such statements are made, and BNY Mellon undertakes no obligation to update any statement to reflect events or circumstances after the date on which such forward-looking statement is made or to reflect the occurrence of unanticipated events.

Analyst Contact:
Marius Merz
212-298-1480
marius.merz@bnymellon.com

Media Contact:
Erin Smith
212-815-7170
erin.smith@bnymellon.com

 

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SOURCE BNY Mellon

FAQ

What is the increase in BNY Mellon's dividend announced in June 2021?

BNY Mellon announced a 10% increase in its quarterly dividend from $0.31 to $0.34 per share.

What is the purpose of BNY Mellon's $6.0 billion stock repurchase plan?

The stock repurchase plan aims to manage capital distributions effectively and enhance shareholder value.

When will BNY Mellon's new dividend rate take effect?

The new dividend rate will take effect in the third quarter of 2021, subject to board approval.

What is BNY Mellon's Stress Capital Buffer requirement as of June 2021?

BNY Mellon's Stress Capital Buffer requirement remains at 2.5%, which is the regulatory minimum.