10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended June 30, 2020

or

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File No. 001-35651

THE BANK OF NEW YORK MELLON CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	13-2614959
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

240 Greenwich Street

New York, New York 10286

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code – (212) 495-1784

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	BK	New York Stock Exchange
Depositary Shares, each representing 1/4,000th of a share of Series C Noncumulative Perpetual Preferred Stock	BK PrC	New York Stock Exchange
6.244% Fixed-to-Floating Rate Normal Preferred Capital Securities of Mellon Capital IV	BK/P	New York Stock Exchange
(fully and unconditionally guaranteed by The Bank of New York Mellon Corporation)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒    No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐    No ☒

As of June 30, 2020, 885,861,714 shares of the registrant’s common stock, $0.01 par value per share, were outstanding.

THE BANK OF NEW YORK MELLON CORPORATION

Second Quarter 2020 Form 10-Q

Table of Contents 

	Page
Consolidated Financial Highlights (unaudited)	2
Part I - Financial Information
Items 2. and 3. Management’s Discussion and Analysis of Financial Condition and Results of Operations; Quantitative and Qualitative Disclosures about Market Risk:
General	4
Overview	4
Key second quarter 2020 and subsequent events	4
Highlights of second quarter 2020 results	5
Impact of coronavirus pandemic on our business	6
Fee and other revenue	7
Net interest revenue	10
Noninterest expense	13
Income taxes	13
Review of businesses	14
Critical accounting estimates	21
Consolidated balance sheet review	21
Liquidity and dividends	32
Capital	37
Trading activities and risk management	41
Asset/liability management	44
Off-balance sheet arrangements	44
Supplemental information - Explanation of GAAP and Non-GAAP financial measures	45
Recent accounting and regulatory developments	47
Website information	48
Item 1. Financial Statements:
Consolidated Income Statement (unaudited)	49
Consolidated Comprehensive Income Statement (unaudited)	51
Consolidated Balance Sheet (unaudited)	52
Consolidated Statement of Cash Flows (unaudited)	53
Consolidated Statement of Changes in Equity (unaudited)	54

	Page
Notes to Consolidated Financial Statements:
Note 1—Basis of presentation	57
Note 2—Accounting changes and new accounting guidance	57
Note 3—Acquisitions and dispositions	62
Note 4—Securities	62
Note 5—Loans and asset quality	67
Note 6—Goodwill and intangible assets	73
Note 7—Other assets	74
Note 8—Contract revenue	76
Note 9—Net interest revenue	78
Note 10—Employee benefit plans	79
Note 11—Income taxes	79
Note 12—Variable interest entities and securitization	80
Note 13—Preferred stock	81
Note 14—Other comprehensive income (loss)	82
Note 15—Fair value measurement	83
Note 16—Fair value option	89
Note 17—Derivative instruments	90
Note 18—Commitments and contingent liabilities	96
Note 19—Lines of business	101
Note 20—Supplemental information to the Consolidated Statement of Cash Flows	104
Item 4. Controls and Procedures	105
Forward-looking Statements	106
Part II - Other Information
Item 1. Legal Proceedings.	108
Item 1A. Risk Factors.	108
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	109
Item 6. Exhibits.	110
Index to Exhibits	111
Signature	113

The Bank of New York Mellon Corporation (and its subsidiaries)

Consolidated Financial Highlights (unaudited)

	Quarter ended									Year-to-date
(dollars in millions, except per share amounts and unless   otherwise noted)	June 30, 2020			March 31, 2020			June 30, 2019			June 30, 2020			June 30, 2019
Results applicable to common shareholders of The Bank of New York Mellon Corporation:
Net income	$	901		$	944		$	969		$	1,845		$	1,879
Basic earnings per share	$	1.01		$	1.05		$	1.01		$	2.06		$	1.95
Diluted earnings per share	$	1.01		$	1.05		$	1.01		$	2.06		$	1.95
Fee and other revenue	$	3,176		$	3,332		$	3,112		$	6,508		$	6,144
Income (loss) from consolidated investment management funds	54			(38		)	10			16			36
Net interest revenue	780			814			802			1,594			1,643
Total revenue	$	4,010		$	4,108		$	3,924		$	8,118		$	7,823
Return on common equity (annualized)	9.4		%	10.1		%	10.4		%	9.7		%	10.2		%
Return on tangible common equity (annualized) – Non-GAAP (a)	18.5		%	20.4		%	21.2		%	19.4		%	20.9		%
Return on average assets (annualized)	0.87		%	0.99		%	1.13		%	0.93		%	1.12		%
Fee revenue as a percentage of total revenue	79		%	81		%	79		%	80		%	78		%
Non-U.S. revenue as a percentage of total revenue	36		%	36		%	36		%	36		%	36		%
Pre-tax operating margin	29		%	30		%	33		%	30		%	32		%
Net interest margin	0.88		%	1.01		%	1.12		%	0.94		%	1.16		%
Net interest margin on a fully taxable equivalent (“FTE”) basis – Non-GAAP (b)	0.88		%	1.01		%	1.12		%	0.94		%	1.16		%
Assets under custody and/or administration (“AUC/A”) at period end (in trillions) (c)	$	37.3		$	35.2		$	35.5		$	37.3		$	35.5
Assets under management (“AUM”) at period end (in billions) (d)	$	1,961		$	1,796		$	1,843		$	1,961		$	1,843
Market value of securities on loan at period end (in billions) (e)	$	384		$	389		$	369		$	384		$	369
Average common shares and equivalents outstanding (in thousands):
Basic	889,020			894,122			951,281			891,642			956,887
Diluted	890,561			896,689			953,928			893,603			959,957
Selected average balances:
Interest-earning assets	$	357,562		$	323,936		$	287,417		$	340,749		$	284,816
Total assets	$	415,359		$	385,278		$	342,384		$	400,318		$	339,292
Interest-bearing deposits	$	210,643		$	197,632		$	167,545		$	204,138		$	163,734
Noninterest-bearing deposits	$	72,411		$	60,577		$	52,956		$	66,494		$	53,765
Long-term debt	$	28,122		$	27,231		$	27,681		$	27,677		$	27,966
Preferred stock	$	4,010		$	3,542		$	3,542		$	3,776		$	3,542
Total The Bank of New York Mellon Corporation common shareholders’ equity	$	38,476		$	37,664		$	37,487		$	38,070		$	37,287
Other information at period end:
Cash dividends per common share	$	0.31		$	0.31		$	0.28		$	0.62		$	0.56
Common dividend payout ratio	31		%	30		%	28		%	30		%	29		%
Common dividend yield (annualized)	3.2		%	3.7		%	2.5		%	3.2		%	2.6		%
Closing stock price per common share	$	38.65		$	33.68		$	44.15		$	38.65		$	44.15
Market capitalization	$	34,239		$	29,822		$	41,619		$	34,239		$	41,619
Book value per common share	$	44.21		$	42.47		$	40.30		$	44.21		$	40.30
Tangible book value per common share – Non-GAAP (a)	$	23.31		$	21.53		$	20.45		$	23.31		$	20.45
Full-time employees	48,300			47,900			49,100			48,300			49,100
Common shares outstanding (in thousands)	885,862			885,443			942,662			885,862			942,662

2 BNY Mellon

Consolidated Financial Highlights (unaudited) (continued)

Regulatory capital and other ratios	June 30, 2020		March 31, 2020		Dec. 31, 2019
Average liquidity coverage ratio (“LCR”)	112	%	115	%	120	%
Regulatory capital ratios: (f)
Advanced:
Common Equity Tier 1 (“CET1”) ratio	12.6	%	11.4	%	11.5	%
Tier 1 capital ratio	15.4		13.5		13.7
Total capital ratio	16.3		14.3		14.4
Standardized:
CET1 ratio	12.7	%	11.3	%	12.5	%
Tier 1 capital ratio	15.6		13.5		14.8
Total capital ratio	16.6		14.4		15.8
Tier 1 leverage ratio	6.2	%	6.0	%	6.6	%
Supplementary leverage ratio (“SLR”) (g)	8.2		5.6		6.1
BNY Mellon shareholders’ equity to total assets ratio	9.9	%	8.8	%	10.9	%
BNY Mellon common shareholders’ equity to total assets ratio	8.9		8.0		9.9

(a) Return on tangible common equity and tangible book value per common share, Non-GAAP measures, exclude goodwill and intangible assets, net of deferred tax liabilities. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page 45 for the reconciliation of Non-GAAP measures.

(b) See “Net interest revenue” on page 10 for a reconciliation of this Non-GAAP measure.

(c) Includes the AUC/A of CIBC Mellon Global Securities Services Company (“CIBC Mellon”), a joint venture with the Canadian Imperial Bank of Commerce, of $1.3 trillion at June 30, 2020, $1.2 trillion at March 31, 2020 and $1.4 trillion at June 30, 2019.

(d) Excludes securities lending cash management assets and assets managed in the Investment Services business.

(e) Represents the total amount of securities on loan in our agency securities lending program managed by the Investment Services business. Excludes securities for which BNY Mellon acts as an agent on behalf of CIBC Mellon clients, which totaled $62 billion at June 30, 2020, $59 billion at March 31, 2020 and $64 billion at June 30, 2019.

(f) 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. For additional information on our capital ratios, see “Capital” beginning on page 37.

(g) The SLR at June 30, 2020 reflects the exclusion of certain central bank placements and the temporary exclusion of U.S. Treasury securities from the leverage exposure. This temporary exclusion increased our consolidated SLR by 40 basis points. See “Capital” beginning on page 37 for additional information.

BNY Mellon 3

Part I - Financial Information

Items 2. and 3. Management’s Discussion and Analysis of Financial Condition and Results of Operations; Quantitative and Qualitative Disclosures about Market Risk

General

In this Quarterly Report on Form 10-Q, references to “our,” “we,” “us,” “BNY Mellon,” the “Company” and similar terms refer to The Bank of New York Mellon Corporation and its consolidated subsidiaries. The term “Parent” refers to The Bank of New York Mellon Corporation but not its subsidiaries.

Certain business terms used in this report are defined in the Glossary included in our Annual Report on Form 10-K for the year ended Dec. 31, 2019 (“2019 Annual Report”).

The following should be read in conjunction with the Consolidated Financial Statements included in this report. Investors should also read the sections titled “Forward-looking Statements” and “Risk Factors.”

Overview

Established in 1784 by Alexander Hamilton, we were the first company listed on the New York Stock Exchange (NYSE: BK). With a history of more than 235 years, BNY Mellon is a global company that manages and services assets for financial institutions, corporations and individual investors in 35 countries.

BNY Mellon has two business segments, Investment Services and Investment and Wealth Management (formerly Investment Management), which offer a comprehensive set of capabilities and deep expertise across the investment lifecycle, enabling the Company to provide solutions to buy-side and sell-side market participants, as well as leading institutional and wealth management clients globally.

The diagram below presents our two business segments and lines of business, with the remaining operations in the Other segment.

Key second quarter 2020 and subsequent events

Emily Portney named Chief Financial Officer

In July 2020, Emily Portney was appointed Chief Financial Officer, succeeding Michael P. Santomassimo, and joined the Company’s Executive Committee. Ms. Portney previously led the client management, sales and services teams for the Asset Servicing business globally and oversaw the Americas region for the Asset Servicing business. She has also previously held senior financial roles.

CCAR and common stock repurchases

In March 2020, we and the other members of the Financial Services Forum announced the temporary suspension of share repurchases until the end of the second quarter of 2020 to preserve capital and liquidity in order to further the objective of using capital and liquidity to support clients and customers.

4 BNY Mellon

On June 25, 2020, the Federal Reserve released the results of its annual stress tests for 2020 and additional sensitivity analyses that the Federal Reserve conducted in light of the coronavirus pandemic. The Federal Reserve also notified BNY Mellon that its stress capital buffer (“SCB”) requirement will be 2.5%, which equals the regulatory floor. The SCB will be effective on Oct. 1, 2020.

The Federal Reserve also announced that it has required participating Comprehensive Capital Analysis and Review (“CCAR”) firms, including us, to update and resubmit their capital plans and that, as a result, unless otherwise approved by the Federal Reserve, participating firms would not be permitted, during the third quarter of 2020, to conduct open market common stock repurchases, to increase their common stock dividends or to pay common stock dividends that exceed average net income for the preceding four quarters. The Federal Reserve also stated that it may extend these limitations quarter-by-quarter.

Highlights of second quarter 2020 results

Net income applicable to common shareholders was $901 million, or $1.01 per diluted common share, in the second quarter of 2020. Net income applicable to common shareholders was $969 million, or $1.01 per diluted common share, in the second quarter of 2019. The highlights below are based on the second quarter of 2020 compared with the second quarter of 2019, unless otherwise noted.

• Total revenue of $4.0 billion increased 2% primarily reflecting:

• Fee revenue increased 2% primarily reflecting higher fees in Pershing and Asset Servicing, partially offset by money market fee waivers, lower investment management fees and the unfavorable impact of a stronger U.S. dollar. (See “Fee and other revenue” beginning on page 7.)

• Net interest revenue decreased 3% primarily reflecting lower interest rates on interest-earning assets, partially offset by the benefit of lower deposit and funding rates and higher deposits, securities portfolio and loans. (See “Net interest revenue” on page 10.)

• Provision for credit losses was $143 million primarily reflecting increased downgrades and the continuation of the challenging

macroeconomic outlook. (See “Consolidated balance sheet review - Allowance for credit losses” beginning on page 29.)

• Noninterest expense increased 1% primarily reflecting the continued investments in technology and higher staff and pension expenses, partially offset by lower business development (travel and marketing) expense and the favorable impact of a stronger U.S. dollar. (See “Noninterest expense” on page 13.)

• Effective tax rate of 18.3%. (See “Income taxes” on page 13.)

Capital and liquidity

• CET1 ratio was 12.6% under the Advanced Approaches at June 30, 2020, compared with 11.3% under the Standardized Approach at March 31, 2020. The increase in the CET1 ratio primarily reflects capital generated through earnings and unrealized gains on assets available-for-sale, partially offset by capital deployed through dividend payments. (See “Capital” beginning on page 37.)

• Tier 1 capital increased $2.55 billion, including the issuance of $1 billion of preferred stock. (See “Capital” beginning on page 37.)

Highlights of our principal businesses

Investment Services

• Total revenue increased 3%.

• Fee revenue increased 5%.

• Income before income taxes decreased 8%.

• AUC/A of $37.3 trillion, increased 5%, primarily reflecting higher client inflows, market values and net new business, partially offset by the unfavorable impact of a stronger U.S. dollar.

Investment and Wealth Management

• Total revenue decreased 3%.

• Income before income taxes decreased 15%.

• AUM of $2.0 trillion, increased 6%, primarily reflecting higher market values and net inflows, partially offset by the unfavorable impact of a stronger U.S. dollar (principally versus the British pound).

See “Review of businesses” and Note 19 of the Notes to Consolidated Financial Statements for additional information on our businesses.

BNY Mellon 5

Impact of coronavirus pandemic on our business

The coronavirus pandemic has had a significant effect on the global macroeconomic environment. The following discusses the areas of our business that have been impacted and could continue to be impacted by the current environment.

At the end of June 2020, approximately 95% of our employees continued to work from home and be fully operational with minimal disruption to servicing our clients. However, our continued reliance on work-from-home arrangements may result in increased operational risks.

Market volatility associated with the performance of global equity and fixed income markets and lower interest rates has had, and may continue to have, a considerable impact on all of our businesses. Our lower-risk diversified fee-based business model benefits from heightened volatility and a flight-to-quality on a relative basis compared with other credit-focused financial institutions.

Our Investment Services businesses were favorably impacted by higher client volumes in the first and second quarters of 2020 compared with the prior year. The significant increases in market volatility also resulted in increased client activity in foreign exchange, and higher asset servicing, clearing services in Pershing, as well as clearance and collateral management fee revenue. However, the heightened volumes and volatility were lower in the second quarter compared with the first quarter of 2020.

This volatility coupled with the interest rate environment also led to an increase in deposit levels from the prior year as our clients increased the levels of cash placed with us. This favorably impacted net interest revenue. However, the low interest rate environment has begun to more than offset that benefit and is expected to continue to reduce our net interest revenue and margin.

Given the recent levels of short-term interest rates, money market mutual funds have begun to waive fees, which reduced fee revenue in the second quarter of 2020. See further discussion of money market fee waivers in “Fee and other revenue.”

As discussed above under “Key second quarter 2020 and subsequent events,” we and the other members of the Financial Services Forum announced in March 2020 that we would suspend share repurchases through the second quarter of 2020. Additionally, in connection with the Federal Reserve’s release of the CCAR results in June 2020, BNY Mellon announced that it will not conduct open market common stock repurchases in the third quarter of 2020, as required of all participating CCAR firms, and will continue the current quarterly common stock dividend of $0.31 per share. See “Recent regulatory developments” for additional information related to the 2020 CCAR results.

The significant changes in market values during 2020 have impacted revenue related to seed capital investments (net of hedges) in our Investment and Wealth Management business, which benefited the second quarter of 2020 and negatively impacted the first quarter of 2020. Also, in the second quarter, the Investment and Wealth Management business was negatively impacted by higher money market fee waivers.

During the first quarter of 2020, we purchased $2.2 billion of commercial paper and certificates of deposit (“CDs”) from affiliated money market mutual funds in order to provide liquidity support to the funds. We also purchased $650 million in the first quarter of 2020 and $1.1 billion in the second quarter of 2020 of commercial paper and CDs from third-party money market mutual funds and funded this purchase through the Federal Reserve Bank of Boston’s Money Market Mutual Fund Liquidity Facility (“MMLF”) program. See “Recent regulatory developments” in the First Quarter 2020 Form 10-Q for additional information on the MMLF.

The need to apply macroeconomic forecasting in the current environment in conjunction with the new expected credit loss accounting guidance has resulted in and may continue to result in heightened levels of credit loss provisioning. The continuing effects of the pandemic could also result in increased credit losses and charge offs.

In addition, a prolonged economic downturn may result in other asset write-downs and impairments, including, but not limited to, equity investments, goodwill and intangibles.

6 BNY Mellon

It is difficult to forecast the impact of the coronavirus, together with related public health measures, on our results with certainty because so much depends on how the health crisis evolves, its impact on the global economy as well as actions taken by central banks and governments to support the economy.

The current macroeconomic environment has also resulted in responses by governmental and regulatory bodies. See “Recent regulatory developments” for additional information on legislative and regulatory

developments in response to the coronavirus pandemic.

For further discussion of the current and potential impact of the coronavirus pandemic see Item 1A. Risk Factors “The coronavirus pandemic is adversely affecting us and creates significant risks and uncertainties for our business, and the ultimate impact of the pandemic on us will depend on future developments, which are highly uncertain and cannot be predicted.”

Fee and other revenue

Fee and other revenue																				YTD20
										2Q20 vs.										vs.
(dollars in millions, unless otherwise noted)	2Q20			1Q20			2Q19			1Q20		2Q19		YTD20			YTD19			YTD19
Investment services fees:
Asset servicing fees (a)	$	1,173		$	1,159		$	1,141		1	%	3	%	$	2,332		$	2,263		3	%
Clearing services fees (b)	431			470			410			(8	)	5		901			808			12
Issuer services fees	277			263			291			5		(5	)	540			542			—
Treasury services fees	144			149			140			(3	)	3		293			272			8
Total investment services fees	2,025			2,041			1,982			(1	)	2		4,066			3,885			5
Investment management and performance fees	786			862			833			(9	)	(6	)	1,648			1,674			(2	)
Foreign exchange and other trading revenue	166			319			166			(48	)	—		485			336			44
Financing-related fees	58			59			50			(2	)	16		117			101			16
Distribution and servicing	27			31			31			(13	)	(13	)	58			62			(6	)
Investment and other income	105			11			43			N/M		N/M		116			78			N/M
Total fee revenue	3,167			3,323			3,105			(5	)	2		6,490			6,136			6
Net securities gains	9			9			7			N/M		N/M		18			8			N/M
Total fee and other revenue	$	3,176		$	3,332		$	3,112		(5	)%	2	%	$	6,508		$	6,144		6	%
Fee revenue as a percentage of total revenue	79		%	81		%	79		%					80		%	78		%
AUC/A at period end (in trillions) (c)	$	37.3		$	35.2		$	35.5		6	%	5	%	$	37.3		$	35.5		5	%
AUM at period end (in billions) (d)	$	1,961		$	1,796		$	1,843		9	%	6	%	$	1,961		$	1,843		6	%

(a) Asset servicing fees include the fees from the Clearance and Collateral Management business and also include securities lending revenue of $56 million in the second quarter of 2020, $51 million in the first quarter of 2020, $44 million in the second quarter of 2019, $107 million in the first six months of 2020 and $92 million in the first six months of 2019.

(b) Clearing services fees are almost entirely earned by our Pershing business.

(c) 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 of $1.3 trillion at June 30, 2020, $1.2 trillion at March 31, 2020 and $1.4 trillion at June 30, 2019.

(d) Excludes securities lending cash management assets and assets managed in the Investment Services business.

N/M - Not meaningful.

Fee and other revenue increased 2% compared with the second quarter of 2019 and decreased 5% compared with the first quarter of 2020. The increase compared with the second quarter of 2019 primarily reflects higher investment and other income, asset servicing fees and clearing services fees, partially offset by lower investment management and performance fees. The decrease compared with the first quarter of 2020 primarily reflects lower foreign exchange and other trading revenue, investment management and performance fees and clearing

services fees, partially offset by higher investment and other income.

Money market fee waivers

Given the recent levels of short-term interest rates, money market mutual fund fees and other similar fees have begun to be waived to protect investors from negative returns. The fee waivers are initially primarily impacting clearing services fees in Pershing, and to a lesser extent revenue in our other

BNY Mellon 7

businesses including investment management fees and distribution and servicing revenue in Investment Management (formerly Asset Management) and fees in other Investment Services businesses, but also result in lower distribution and servicing expense. Money market fee waivers are highly sensitive to changes in short-term interest rates and are difficult to predict, but are expected to grow over the coming quarters.

The following table presents the impact of money market fee waivers on our consolidated fee revenue, net of distribution and servicing expense. A majority of the money market fee waivers were driven by low short-term interest rates. An increase in money market balances in the second quarter 2020 compared with the first quarter 2020 resulted in an approximate $50 million increase in total fee and other revenue which partially offset the increase in money market fee waivers.

Money market fee waivers
(in millions)	2Q20			1Q20
Investment services fees:
Clearing services fees	$	(50	)	$	(9	)
Issuer services fees	(1		)	—
Treasury services fees	(2		)	—
Total investment services fees	(53		)	(9		)
Investment management and performance fees	(30		)	(14		)
Distribution and servicing revenue	(3		)	—
Total fee and other revenue	(86		)	(23		)
Less: Distribution and servicing expense	7			—
Net impact of money market fee waivers	$	(79	)	$	(23	)
Impact to revenue by line of business:
Asset Servicing	$	(1	)	$	—
Pershing	(60		)	(9		)
Issuer Services	(1		)	—
Investment Management	(24		)	(14		)
Total impact to revenue by line of business	$	(86	)	$	(23	)

Note: The line of business revenue for management reporting purposes reflects the impact of revenue transferred between the businesses.

Assuming quarter-end money market balances, we expect the impact from fee waivers, net of lower distribution and servicing expense, to increase in the third quarter of 2020 by approximately $30 million to $45 million and to increase an incremental $25 million in the fourth quarter of 2020, for a full run rate of approximately $135 million to $150 million. This impact may be partially offset depending on the levels of money market balances.

Investment services fees

Investment services fees increased 2% compared with the second quarter of 2019 and decreased 1% compared with the first quarter of 2020 reflecting the following:

• Asset servicing fees increased 3% compared with the second quarter of 2019 and 1% compared with the first quarter of 2020. Both increases primarily reflect higher volumes from existing clients.

• Clearing services fees increased 5% compared with the second quarter of 2019 and decreased 8% compared with the first quarter of 2020. The increase compared with the second quarter of 2019 primarily reflects higher money market balances and clearing volumes, partially offset by the impact of rate-driven money market fee waivers. The decrease compared with the first quarter of 2020 primarily reflects the impact of rate-driven money market fee waivers and lower clearing volumes, partially offset by higher money market balances.

• Issuer services fees decreased 5% compared with the second quarter of 2019 and increased 5% compared with the first quarter of 2020. The decrease compared with the second quarter of 2019 primarily reflects lower Depositary Receipts and Corporate Trust fees. The increase compared with the first quarter of 2020 primarily reflects higher Depositary Receipts fees.

• Treasury services fees increased 3% compared with the second quarter of 2019 and decreased 3% compared with the first quarter of 2020. The increase compared with the second quarter of 2019 primarily reflects higher liquidity fees. The decrease compared with the first quarter of 2020 primarily reflects lower payment volumes and other fees.

See the “Investment Services business” in “Review of businesses” for additional details.

Investment management and performance fees

Investment management and performance fees decreased 6% compared with the second quarter of 2019 and 9% compared with the first quarter of 2020. The decrease compared with the second quarter of 2019 primarily reflects money market fee waivers, the unfavorable change in the mix of AUM since the second quarter of 2019 and the unfavorable impact of

8 BNY Mellon

a stronger U.S. dollar (principally versus the British pound). The decrease compared with the first quarter of 2020 primarily reflects the timing of performance fees and money market fee waivers. On a constant currency basis (Non-GAAP), investment management and performance fees decreased 5% compared with the second quarter of 2019. Performance fees were $5 million in the second quarter of 2020, $2 million in the second quarter of 2019 and $50 million in the first quarter of 2020.

AUM was $2.0 trillion at June 30, 2020, an increase of 6% compared with June 30, 2019, primarily reflecting higher market values and net inflows, partially offset by the unfavorable impact of a stronger U.S. dollar (principally versus the British pound).

See “Investment and Wealth Management business” in “Review of businesses” for additional details regarding the drivers of investment management and performance fees, AUM and AUM flows.

Foreign exchange and other trading revenue

Foreign exchange and other trading revenue
(in millions)	2Q20			1Q20		2Q19		YTD20		YTD19
Foreign exchange	$	174		$	253	$	150	$	427	$	310
Other trading (loss) revenue	(8		)	66		16		58		26
Total foreign exchange and other trading revenue	$	166		$	319	$	166	$	485	$	336

Foreign exchange and other trading revenue was unchanged compared with the second quarter of 2019 and decreased 48% compared with the first quarter of 2020.

Foreign exchange revenue is primarily driven by the volume of client transactions and the spread realized on these transactions, both of which are impacted by market volatility, and the impact of foreign currency hedging activities. In the second quarter of 2020, foreign exchange revenue totaled $174 million, an increase of 16% compared with the second quarter of 2019 and a decrease of 31% compared with the first quarter of 2020. The increase compared with the second quarter of 2019 reflects higher volatility partially offset by the negative impact of foreign currency translation hedging (mostly offset in investment and other income). The decrease compared with the first quarter of 2020 reflects lower volumes and volatility and the negative impact of

foreign currency translation hedging. Foreign exchange revenue is primarily reported in the Investment Services business and, to a lesser extent, the Investment and Wealth Management business and the Other segment.

Other trading losses totaled $8 million in the second quarter of 2020 compared with other trading revenue of $16 million in the second quarter of 2019 and other trading revenue of $66 million in the first quarter of 2020. Both decreases primarily reflect the impact of Investment Management seed capital hedging activities. Other trading revenue is reported in all three business segments.

Investment and other income

The following table provides the components of investment and other income.

Investment and other income
(in millions)	2Q20		1Q20			2Q19			YTD20			YTD19
Corporate/bank-owned life insurance	$	36	$	36		$	32		$	72		$	62
Expense reimbursements from joint venture	19		21			19			40			38
Asset-related gains	3		4			1			7			2
Seed capital gains (losses) (a)	23		(31		)	8			(8		)	10
Other income (loss)	24		(19		)	(17		)	5			(34		)
Total investment and other income	$	105	$	11		$	43		$	116		$	78

(a) Excludes seed capital gains related to consolidated investment management funds, which are reflected in operations of consolidated investment management funds.

Investment and other income increased compared with both the second quarter of 2019 and first quarter of 2020. Both increases primarily reflect equity investment gains, including seed capital investments, foreign currency translation gains and a one-time fee in the Asset Servicing business. The increase compared with the first quarter of 2020 was partially offset by a one-time fee in the Pershing business recorded in the first quarter of 2020.

Year-to-date 2020 compared with year-to-date 2019

Fee and other revenue increased 6% compared with the first six months of 2019, primarily reflecting higher foreign exchange and other trading revenue, clearing services fees, asset servicing fees and investment and other income. The 44% increase in foreign exchange and other trading revenue primarily reflects higher volatility and volumes. The 12% increase in clearing services fees primarily reflects

BNY Mellon 9

higher transaction fees and money market balances, partially offset by money market fee waivers. The 3% increase in asset servicing fees primarily reflects higher volumes from existing clients. The increase in

investment and other income revenue primarily reflects one-time fees in the Pershing and Asset Servicing businesses.

Net interest revenue

Net interest revenue																				YTD20
										2Q20 vs.										vs.
(dollars in millions)	2Q20			1Q20			2Q19			1Q20		2Q19		YTD20			YTD19			YTD19
Net interest revenue – GAAP	$	780		$	814		$	802		(4	)%	(3	)%	$	1,594		$	1,643		(3	)%
Add: Tax equivalent adjustment	2			2			4			N/M		N/M		4			8			N/M
Net interest revenue (FTE) – Non-GAAP (a)	$	782		$	816		$	806		(4	)%	(3	)%	$	1,598		$	1,651		(3	)%
Average interest-earning assets	$	357,562		$	323,936		$	287,417		10	%	24	%	$	340,749		$	284,816		20	%
Net interest margin – GAAP	0.88		%	1.01		%	1.12		%	(13	) bps	(24	) bps	0.94		%	1.16		%	(22	) bps
Net interest margin (FTE) – Non-GAAP (a)	0.88		%	1.01		%	1.12		%	(13	) bps	(24	) bps	0.94		%	1.16		%	(22	) bps

(a) Net interest revenue (FTE) – Non-GAAP and net interest margin (FTE) – Non-GAAP include the tax equivalent adjustments on tax-exempt income which allows for comparisons of amounts arising from both taxable and tax-exempt sources and is consistent with industry practice. The adjustment to an FTE basis has no impact on net income.

N/M - Not meaningful.

bps - basis points.

Net interest revenue decreased 3% compared with the second quarter of 2019 and 4% compared with the first quarter of 2020. The decrease compared with the second quarter of 2019 primarily reflects lower interest rates on interest-earning assets, partially offset by the benefit of lower deposit and funding rates and higher deposits, securities portfolio and loans. The decrease compared with the first quarter of 2020 was primarily driven by lower interest rates on interest-earning assets. This was partially offset by the benefit of lower deposit and funding rates, higher securities portfolio and the impact of hedging activities (primarily offset in foreign exchange and other trading revenue).

Net interest margin decreased 24 basis points compared with the second quarter of 2019 and 13 basis points compared with the first quarter of 2020. Both decreases primarily reflect lower asset yields and higher interest-earning assets, partially offset by lower deposit rates.

Average interest-earning assets of $358 billion in the second quarter of 2020 increased 24% compared with the second quarter of 2019 and 10% compared with the first quarter of 2020. Both increases primarily reflect higher interest-bearing deposits with the Federal Reserve and other central banks and securities portfolio.

Average non-U.S. dollar deposits comprised approximately 25% of our average total deposits in the second quarter of 2020. Approximately 40% of the average non-U.S. dollar deposits in the second quarter of 2020 were euro denominated.

Net interest revenue in future quarters will depend on the level and mix of client deposits, deposit rates, as well as the level and shape of the yield curve, which may result in lower yields on interest-earning assets.

Year-to-date 2020 compared with year-to-date 2019

Net interest revenue decreased 3% compared with the first six months of 2019, primarily driven by lower interest rates on interest-earning assets, partially offset by the benefit of lower deposit and funding rates and higher deposits, securities portfolio and loans. The decrease in net interest margin primarily reflects lower asset yields and higher interest-earning assets, partially offset by lower deposit and funding rates and higher deposits and securities portfolio.

Average interest-earning assets of $341 billion in the first six months of 2020 increased 20% compared with the first six months of 2019. The increase primarily reflects higher interest-bearing deposits with the Federal Reserve and other central banks, securities portfolio and loans.

10 BNY Mellon

Average balances and interest rates	Quarter ended
	June 30, 2020							March 31, 2020						June 30, 2019
(dollars in millions; average rates annualized)	Average balance		Interest			Average rates		Average balance		Interest		Average rates		Average balance		Interest		Average rates
Assets
Interest-earning assets:
Interest-bearing deposits with the Federal Reserve and other central banks	$	94,229	$	(7	)	(0.03	)%	$	80,403	$	80	0.39	%	$	61,756	$	113	0.72	%
Interest-bearing deposits with banks (primarily foreign banks)	21,093		40			0.76		17,081		58		1.37		13,666		64		1.87
Federal funds sold and securities purchased under resale agreements (a)	30,265		61			0.82		34,109		396		4.67		38,038		568		5.99
Margin loans	12,791		40			1.28		12,984		87		2.69		10,920		119		4.36
Non-margin loans:
Domestic offices	31,185		172			2.21		31,720		238		3.02		29,492		284		3.86
Foreign offices	12,743		58			1.84		11,170		71		2.55		9,961		81		3.29
Total non-margin loans	43,928		230			2.10		42,890		309		2.89		39,453		365		3.71
Securities:
U.S. government obligations	27,901		105			1.52		23,175		108		1.87		18,870		103		2.19
U.S. government agency obligations	74,583		358			1.92		69,046		400		2.32		66,445		428		2.58
State and political subdivisions (b)	1,025		7			2.98		1,033		8		3.06		1,735		13		2.89
Other securities (b)	45,511		93			0.82		36,375		86		0.95		30,770		157		2.04
Trading securities (b)	6,236		18			1.13		6,840		40		2.36		5,764		39		2.72
Total securities (b)	155,256		581			1.50		136,469		642		1.88		123,584		740		2.40
Total interest-earning assets (b)	$	357,562	$	945		1.06	%	$	323,936	$	1,572	1.95	%	$	287,417	$	1,969	2.74	%
Noninterest-earning assets	57,797							61,342						54,967
Total assets	$	415,359						$	385,278					$	342,384
Liabilities
Interest-bearing liabilities:
Interest-bearing deposits:
Domestic offices	$	102,135	$	15		0.06	%	$	99,915	$	170	0.69	%	$	74,180	$	251	1.36	%
Foreign offices	108,508		(32		)	(0.12	)	97,717		70		0.29		93,365		181		0.78
Total interest-bearing deposits	210,643		(17		)	(0.03	)	197,632		240		0.49		167,545		432		1.04
Federal funds purchased and securities sold under repurchase agreements (a)	14,209		1			0.03		13,919		275		7.96		11,809		372		12.64
Trading liabilities	1,974		2			0.39		1,626		7		1.61		1,735		11		2.47
Other borrowed funds	2,272		7			1.30		719		4		2.27		2,455		20		3.36
Commercial paper	191		1			1.02		1,581		6		1.56		2,957		18		2.43
Payables to customers and broker-dealers	18,742		(1		)	(0.01	)	16,386		30		0.73		15,666		69		1.76
Long-term debt	28,122		170			2.42		27,231		194		2.83		27,681		241		3.45
Total interest-bearing liabilities	$	276,153	$	163		0.24	%	$	259,094	$	756	1.17	%	$	229,848	$	1,163	2.03	%
Total noninterest-bearing deposits	72,411							60,577						52,956
Other noninterest-bearing liabilities	24,121							24,229						18,362
Total liabilities	372,685							343,900						301,166
Temporary equity
Redeemable noncontrolling interests	74							66						53
Permanent equity
Total The Bank of New York Mellon Corporation shareholders’ equity	42,486							41,206						41,029
Noncontrolling interests	114							106						136
Total permanent equity	42,600							41,312						41,165
Total liabilities, temporary equity and permanent equity	$	415,359						$	385,278					$	342,384
Net interest revenue (FTE) – Non-GAAP (c)			$	782						$	816					$	806
Net interest margin (FTE) – Non-GAAP (b)(c)						0.88	%					1.01	%					1.12	%
Less: Tax equivalent adjustment (b)			2							2						4
Net interest revenue – GAAP			$	780						$	814					$	802
Net interest margin – GAAP						0.88	%					1.01	%					1.12	%

(a) Includes the average impact of offsetting under enforceable netting agreements of approximately $67 billion for the second quarter of 2020, $80 billion for the first quarter of 2020 and $51 billion for the second quarter of 2019. On a Non-GAAP basis, excluding the impact of offsetting, the yield on federal funds sold and securities purchased under resale agreements would have been 0.26% for the second quarter of 2020, 1.39% for the first quarter of 2020 and 2.57% for the second quarter of 2019.  On a Non-GAAP basis, excluding the impact of offsetting, the rate on federal funds purchased and securities sold under repurchase agreements would have been 0.00% for the second quarter of 2020, 1.18% for the first quarter of 2020 and 2.39% for the second quarter of 2019. We believe providing the rates excluding the impact of netting is useful to investors as it is more reflective of the actual rates earned and paid.

(b) Average rates were calculated on an FTE basis, at tax rates of approximately 21%.

(c) See “Net interest revenue” on page 10 for a reconciliation of this Non-GAAP measure.

BNY Mellon 11

Average balances and interest rates	Year-to-date
	June 30, 2020						June 30, 2019
(dollars in millions; average rates annualized)	Average balance		Interest		Average rates		Average balance		Interest		Average rates
Assets
Interest-earning assets:
Interest-bearing deposits with the Federal Reserve and other central banks	$	87,316	$	73	0.16	%	$	62,665	$	252	0.80	%
Interest-bearing deposits with banks (primarily foreign banks)	19,087		98		1.03		13,761		127		1.86
Federal funds sold and securities purchased under resale agreements (a)	32,187		457		2.86		33,528		1,042		6.26
Margin loans	12,887		127		1.99		11,790		254		4.35
Non-margin loans:
Domestic offices	31,453		410		2.62		28,838		553		3.85
Foreign offices	11,956		129		2.17		10,235		167		3.30
Total non-margin loans	43,409		539		2.49		39,073		720		3.71
Securities:
U.S. government obligations	25,538		213		1.68		21,220		232		2.21
U.S. government agency obligations	71,815		758		2.11		65,660		855		2.60
State and political subdivisions (b)	1,029		15		3.02		1,969		28		2.80
Other securities (b)	40,943		179		0.88		29,715		308		2.08
Trading securities (b)	6,538		58		1.77		5,435		75		2.81
Total securities (b)	145,863		1,223		1.68		123,999		1,498		2.42
Total interest-earning assets (b)	$	340,749	$	2,517	1.48	%	$	284,816	$	3,893	2.75	%
Noninterest-earning assets	59,569						54,476
Total assets	$	400,318					$	339,292
Liabilities
Interest-bearing liabilities:
Interest-bearing deposits:
Domestic offices	$	101,025	$	185	0.37	%	$	72,381	$	475	1.32	%
Foreign offices	103,113		38		0.07		91,353		348		0.77
Total interest-bearing deposits	204,138		223		0.22		163,734		823		1.01
Federal funds purchased and securities sold under repurchase agreements (a)	14,064		276		3.95		11,865		703		11.95
Trading liabilities	1,800		9		0.94		1,521		18		2.37
Other borrowed funds	1,495		11		1.53		2,878		44		3.08
Commercial paper	886		7		1.50		2,171		26		2.43
Payables to customers and broker-dealers	17,564		29		0.33		15,887		139		1.76
Long-term debt	27,677		364		2.62		27,966		489		3.48
Total interest-bearing liabilities	$	267,624	$	919	0.69	%	$	226,022	$	2,242	2.00	%
Total noninterest-bearing deposits	66,494						53,765
Other noninterest-bearing liabilities	24,174						18,494
Total liabilities	358,292						298,281
Temporary equity
Redeemable noncontrolling interests	70						65
Permanent equity
Total The Bank of New York Mellon Corporation shareholders’ equity	41,846						40,829
Noncontrolling interests	110						117
Total permanent equity	41,956						40,946
Total liabilities, temporary equity and permanent equity	$	400,318					$	339,292
Net interest revenue (FTE) – Non-GAAP (c)			$	1,598					$	1,651
Net interest margin (FTE) – Non-GAAP (b)(c)					0.94	%					1.16	%
Less: Tax equivalent adjustment (b)			4						8
Net interest revenue – GAAP			$	1,594					$	1,643
Net interest margin – GAAP					0.94	%					1.16	%

(a) Includes the average impact of offsetting under enforceable netting agreements of approximately $73 billion for the first six months of 2020 and $47 billion for the first six months of 2019. On a Non-GAAP basis, excluding the impact of offsetting, the yield on federal funds sold and securities purchased under resale agreements would have been 0.87% for the first six months of 2020 and 2.59% for the first six months of 2019.  On a Non-GAAP basis, excluding the impact of offsetting, the rate on federal funds purchased and securities sold under repurchase agreements would have been 0.64% for the first six months of 2020 and 2.39% for the first six months of 2019. We believe providing the rates excluding the impact of netting is useful to investors as it is more reflective of the actual rates earned and paid.

(b) Average rates were calculated on an FTE basis, at tax rates of approximately 21%.

(c) See “Net interest revenue” on page 10 for a reconciliation of this Non-GAAP measure.

12 BNY Mellon

Noninterest expense

Noninterest expense															YTD20
							2Q20 vs.								vs.
(dollars in millions)	2Q20		1Q20		2Q19		1Q20		2Q19		YTD20		YTD19		YTD19
Staff	$	1,464	$	1,482	$	1,421	(1	)%	3	%	$	2,946	$	2,945	—	%
Software and equipment	345		326		304		6		13		671		587		14
Professional, legal and other purchased services	337		330		337		2		—		667		662		1
Net occupancy	137		135		138		1		(1	)	272		275		(1	)
Sub-custodian and clearing	120		105		115		14		4		225		220		2
Distribution and servicing	85		91		94		(7	)	(10	)	176		185		(5	)
Bank assessment charges	35		35		31		—		13		70		62		13
Business development	20		42		56		(52	)	(64	)	62		101		(39	)
Amortization of intangible assets	26		26		30		—		(13	)	52		59		(12	)
Other	117		140		121		(16	)	(3	)	257		250		3
Total noninterest expense	$	2,686	$	2,712	$	2,647	(1	)%	1	%	$	5,398	$	5,346	1	%
Full-time employees at period end	48,300		47,900		49,100		1	%	(2	)%

Total noninterest expense increased 1% compared with the second quarter of 2019 and decreased 1% compared with the first quarter of 2020. The increase compared with the second quarter of 2019 primarily reflects the continued investments in technology and higher staff and pension expenses, partially offset by lower business development (travel and marketing) expense and the favorable impact of a stronger U.S. dollar. The investments in technology are included in staff, software and equipment, and professional, legal and other purchased services expenses. The decrease compared with the first quarter of 2020 primarily reflects lower other and business development (travel and marketing) expenses and the favorable impact of a stronger U.S. dollar, partially offset by higher software and equipment and sub-custodian and clearing expenses.

Our investments in technology infrastructure and platforms are expected to continue. As a result, we expect to incur higher technology-related expenses in 2020 than in 2019 and higher pension expense as a result of a lower expected rate of return on plan assets. These increases are expected to be offset by decreases in other expenses as we continue to manage overall expenses.

Year-to-date 2020 compared with year-to-date 2019

Noninterest expense increased 1% compared with the first six months of 2019, primarily reflecting the continued investments in technology and higher software and equipment, staff and pension expenses, partially offset by the favorable impact of a stronger U.S. dollar and lower business development (travel and marketing) expense.

Income taxes

BNY Mellon recorded an income tax provision of $216 million (18.3% effective tax rate) in the second quarter of 2020, $264 million (20.5% effective tax rate) in the second quarter of 2019 and $265 million (21.6% effective tax rate) in the first quarter of 2020. For additional information, see Note 11 of the Notes to Consolidated Financial Statements.

BNY Mellon 13

Review of businesses

We have an internal information system that produces performance data along product and service lines for our two principal businesses, Investment Services and Investment and Wealth Management (formerly Investment Management), and the Other segment.

Business accounting principles

Our business data has been determined on an internal management basis of accounting, rather than the generally accepted accounting principles used for consolidated financial reporting. These measurement principles are designed so that reported results of the businesses will track their economic performance.

For information on the accounting principles of our businesses, see Note 19 of the Notes to Consolidated Financial Statements. For information on the primary products and services in each line of business, the primary types of revenue by business and how our businesses are presented and analyzed, see Note 24 of the Notes to Consolidated Financial Statements in our 2019 Annual Report.

Business results are subject to reclassification when organizational changes are made. There were no significant organizational changes in the second quarter of 2020. The results are also subject to refinements in revenue and expense allocation methodologies, which are typically reflected on a prospective basis.

In the first quarter of 2020, we reclassified the results of certain services provided between the segments from noninterest expense to fee and other revenue. This activity is offset in the Other segment and relates to services that are also provided to third parties and provides consistency with the reporting of the revenues. This adjustment had no impact on income before taxes of the businesses. Also in the first quarter of 2020, we reclassified the results related to certain lending activities from the Wealth Management business to the Pershing business. These loans were originated by the Wealth Management business as a service to Pershing clients. This resulted in an increase in total revenue, noninterest expense and income before taxes in the Pershing business and corresponding decrease in the Wealth Management business. Prior periods were restated in the first quarter of 2020 for both reclassifications.

The results of our businesses may be influenced by client and other activities that vary by quarter. In the first quarter, staff expense typically increases reflecting the vesting of long-term stock awards for retirement-eligible employees. In the third quarter, volume-related fees may decline due to reduced client activity. In the third quarter, staff expense typically increases reflecting the annual employee merit increase. In the fourth quarter, we typically incur higher business development and marketing expenses; however, 2020 is expected to be different given the impact of the coronavirus pandemic. In our Investment and Wealth Management business, performance fees are typically higher in the fourth and first quarters, as those quarters represent the end of the measurement period for many of the performance fee-eligible relationships.

The results of our businesses may also be impacted by the translation of financial results denominated in foreign currencies to the U.S. dollar. We are primarily impacted by activities denominated in the British pound and the euro. On a consolidated basis and in our Investment Services business, we typically have more foreign currency-denominated expenses than revenues. However, our Investment and Wealth Management business typically has more foreign currency-denominated revenues than expenses. Overall, currency fluctuations impact the year-over-year growth rate in the Investment and Wealth Management business more than the Investment Services business. However, currency fluctuations, in isolation, are not expected to significantly impact net income on a consolidated basis.

Fee revenue in Investment and Wealth Management, and to a lesser extent in Investment Services, is impacted by the value of market indices. At June 30, 2020, we estimate that a 5% change in global equity markets, spread evenly throughout the year, would impact fee revenue by less than 1% and diluted earnings per common share by $0.03 to $0.06.

See Note 19 of the Notes to Consolidated Financial Statements for the consolidating schedules which show the contribution of our businesses to our overall profitability.

14 BNY Mellon

Investment Services business

																										YTD20
(dollars in millions)																2Q20 vs.										vs.
	2Q20			1Q20			4Q19			3Q19			2Q19			1Q20		2Q19		YTD20			YTD19			YTD19
Revenue:
Investment services fees:
Asset servicing fees (a)	$	1,164		$	1,147		$	1,138		$	1,138		$	1,126		1	%	3	%	$	2,311		$	2,237		3	%
Clearing services fees (b)	431			470			421			419			411			(8	)	5		901			809			11
Issuer services fees	277			263			264			324			291			5		(5	)	540			542			—
Treasury services fees	144			149			147			139			140			(3	)	3		293			272			8
Total investment services fees	2,016			2,029			1,970			2,020			1,968			(1	)	2		4,045			3,860			5
Foreign exchange and other trading revenue	178			261			151			160			153			(32	)	16		439			310			42
Other (c)	145			146			115			116			112			(1	)	29		291			224			30
Total fee and other revenue	2,339			2,436			2,236			2,296			2,233			(4	)	5		4,775			4,394			9
Net interest revenue	768			806			778			761			783			(5	)	(2	)	1,574			1,587			(1	)
Total revenue	3,107			3,242			3,014			3,057			3,016			(4	)	3		6,349			5,981			6
Provision for credit losses	145			149			(5		)	(15		)	(4		)	N/M		N/M		294			4			N/M
Noninterest expense (excluding amortization of intangible assets)	1,971			1,969			2,160			1,952			1,943			—		1		3,940			3,904			1
Amortization of intangible assets	18			18			19			21			20			—		(10	)	36			40			(10	)
Total noninterest expense	1,989			1,987			2,179			1,973			1,963			—		1		3,976			3,944			1
Income before income taxes	$	973		$	1,106		$	840		$	1,099		$	1,057		(12	)%	(8	)%	$	2,079		$	2,033		2	%
Pre-tax operating margin	31		%	34		%	28		%	36		%	35		%					33		%	34		%
Securities lending revenue	$	51		$	46		$	40		$	39		$	40		11	%	28	%	$	97		$	84		15	%
Total revenue by line of business:
Asset Servicing	$	1,463		$	1,531		$	1,411		$	1,411		$	1,397		(4	)%	5	%	$	2,994		$	2,812		6	%
Pershing	578			653			579			575			572			(11	)	1		1,231			1,133			9
Issuer Services	431			419			415			466			446			3		(3	)	850			842			1
Treasury Services	340			339			329			312			317			—		7		679			634			7
Clearance and Collateral Management	295			300			280			293			284			(2	)	4		595			560			6
Total revenue by line of business	$	3,107		$	3,242		$	3,014		$	3,057		$	3,016		(4	)%	3	%	$	6,349		$	5,981		6	%
Average balances:
Average loans	$	43,113		$	41,789		$	38,721		$	37,005		$	36,404		3	%	18	%	$	42,451		$	36,818		15	%
Average deposits	$	268,467		$	242,187		$	215,388		$	208,044		$	201,146		11	%	33	%	$	255,327		$	198,131		29	%

(a) Asset servicing fees include the fees from the Clearance and Collateral Management business.

(b) Clearing services fees are almost entirely earned by our Pershing business.

(c) Other revenue includes investment management and performance fees, financing-related fees, distribution and servicing revenue, securities gains and losses and investment and other income.

N/M - Not meaningful.

BNY Mellon 15

Investment Services business metrics
(dollars in millions, unless otherwise noted)											2Q20 vs.
	2Q20		1Q20		4Q19		3Q19		2Q19		1Q20		2Q19
AUC/A at period end (in trillions) (a)	$	37.3	$	35.2	$	37.1	$	35.8	$	35.5	6	%	5	%
Market value of securities on loan at period end (in billions) (b)	$	384	$	389	$	378	$	362	$	369	(1	)%	4	%
Pershing:
Net new assets (U.S. platform) (in billions) (c)	$	11	$	31	$	33	$	19	$	21	N/M		N/M
Average active clearing accounts (U.S. platform) (in thousands)	6,507		6,437		6,340		6,283		6,254		1	%	4	%
Average long-term mutual fund assets (U.S. platform)	$	547,579	$	549,206	$	573,475	$	547,522	$	532,384	—	%	3	%
Average investor margin loans (U.S. platform)	$	9,235	$	9,419	$	9,420	$	9,222	$	9,440	(2	)%	(2	)%
Clearance and Collateral Management:
Average tri-party collateral management balances (in billions)	$	3,573	$	3,724	$	3,562	$	3,550	$	3,400	(4	)%	5	%

(a) Consists of AUC/A primarily from the Asset Servicing business and, to a lesser extent, the Clearance and Collateral Management, Issuer Services and Pershing businesses. Includes the AUC/A of CIBC Mellon of $1.3 trillion at June 30, 2020, $1.2 trillion at March 31, 2020, $1.5 trillion at Dec. 31, 2019 and $1.4 trillion at Sept. 30, 2019 and June 30, 2019.

(b) Represents the total amount of securities on loan in our agency securities lending program managed by the Investment Services business. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled $62 billion at June 30, 2020, $59 billion at March 31, 2020, $60 billion at Dec. 31, 2019, $66 billion at Sept. 30, 2019 and $64 billion at June 30, 2019.

(c) Net new assets represent net flows of assets (e.g., net cash deposits and net securities transfers) in customer accounts in Pershing LLC, a U.S. broker-dealer.

N/M - Not meaningful.

Business description

BNY Mellon Investment Services provides business services and technology solutions to entities including financial institutions, corporations, foundations and endowments, public funds and government agencies. Our lines of business include: Asset Servicing, Pershing, Issuer Services, Treasury Services and Clearance and Collateral Management. For information on the drivers of the Investment Services fee revenue, see Note 10 of the Notes to Consolidated Financial Statements in our 2019 Annual Report.

We are one of the leading global investment services providers with $37.3 trillion of AUC/A at June 30, 2020.

The Asset Servicing business provides a comprehensive suite of solutions. As one of the largest global custody and fund accounting providers and a trusted partner, we offer services for the safekeeping of assets in capital markets globally as well as alternative investment and structured product strategies. We provide custody and foreign exchange services, support exchange-traded funds and unit investment trusts and provide our clients outsourcing capabilities. Our robust digital and data offerings enable us to provide fully integrated technology solutions for our clients. We deliver securities lending and financing solutions on both an agency and principal basis. Our agency securities lending program is one of the largest lenders of U.S. and non-U.S. securities, servicing a lendable asset pool of

approximately $4.0 trillion in 34 separate markets. Our market-leading liquidity services portal enables cash investments for institutional clients and includes fund research and analytics.

Pershing provides execution, clearing, custody, business and technology solutions, delivering dependable operational support to broker-dealers, wealth managers and registered investment advisors (RIAs) globally.

The Issuer Services business includes Corporate Trust and Depositary Receipts. Our Corporate Trust business delivers a full range of issuer and related investor services, including trustee, paying agency, fiduciary, escrow and other financial services. We are a leading provider to the debt capital markets, providing customized and market-driven solutions to investors, bondholders and lenders. Our Depositary Receipts business drives global investing by providing servicing and value-added solutions that enable, facilitate and enhance cross-border trading, clearing, settlement and ownership. We are one of the largest providers of depositary receipts services in the world, partnering with leading companies from more than 50 countries.

Our Treasury Services business provides global payments, liquidity management and trade finance services for financial institutions, corporations and the public sector.

16 BNY Mellon

Our Clearance and Collateral Management business clears and settles equity and fixed-income transactions globally and serves as custodian for tri-party repo collateral worldwide. We are the primary provider of U.S. government securities clearance and a provider of non-U.S. government securities clearance. Our collateral services include collateral management, administration and segregation. We offer innovative solutions and industry expertise which help financial institutions and institutional investors with their liquidity, financing, risk and balance sheet challenges. We are a leading provider of tri-party collateral management services with an average of $3.6 trillion serviced globally including approximately $2.6 trillion of the U.S. tri-party repo market.

Review of financial results

AUC/A of $37.3 trillion increased 5% compared with June 30, 2019, primarily reflecting higher client inflows, market values and net new business, partially offset by the unfavorable impact of a stronger U.S. dollar. AUC/A consisted of 33% equity securities and 67% fixed-income securities at June 30, 2020 and 35% equity securities and 65% fixed-income securities at June 30, 2019.

Total revenue of $3.1 billion increased 3% compared with the second quarter of 2019 and decreased 4% compared with the first quarter of 2020. The drivers of total revenue by line of business are indicated below.

Asset Servicing revenue of $1.5 billion increased 5% compared with the second quarter of 2019 and decreased 4% compared with the first quarter of 2020. The increase compared with the second quarter of 2019 reflects higher foreign exchange and other trading revenue, partially offset by lower net interest revenue. The decrease compared with the first quarter of 2020 reflects lower foreign exchange and other trading revenue and net interest revenue. Total revenue in the second quarter of 2020 also benefited from higher volumes from existing clients and a one-time fee.

Pershing revenue of $578 million increased 1% compared with the second quarter of 2019 and decreased 11% compared with the first quarter of 2020. The increase compared with the second quarter of 2019 primarily reflects higher money market balances and clearing volumes, partially offset by the impact of rate-driven money market fee waivers. The

decrease compared with the first quarter of 2020 primarily reflects the impact of rate-driven money market fee waivers, a one-time fee recorded in the first quarter of 2020 and lower clearing volumes, partially offset by higher money market balances.

Issuer Services revenue of $431 million decreased 3% compared with the second quarter of 2019 and increased 3% compared with the first quarter of 2020. The decrease compared with the second quarter of 2019 reflects lower Depositary Receipts and Corporate Trust fees. The increase compared with the first quarter of 2020 primarily reflects higher Depositary Receipts fees.

Treasury Services revenue of $340 million increased 7% compared with the second quarter of 2019 and increased slightly compared with the first quarter of 2020. The increase compared with the second quarter of 2019 primarily reflects higher net interest revenue driven by deposit growth and higher fees.

Clearance and Collateral Management revenue of $295 million increased 4% compared with the second quarter of 2019 and decreased 2% compared with the first quarter of 2020. The increase compared with the second quarter of 2019 primarily reflects higher net interest revenue and growth in collateral management and clearance volumes, mostly from non-U.S. clients. The decrease compared with the first quarter of 2020 primarily reflects lower collateral management fees.

Market and regulatory trends are driving investable assets toward lower fee asset management products at reduced margins for our clients. These dynamics are also negatively impacting our investment services fees. However, at the same time, these trends are providing additional outsourcing opportunities as clients and other market participants seek to comply with regulations and reduce their operating costs.

The provision for credit losses of $145 million in the second quarter of 2020 primarily reflects increased downgrades and the continuation of the challenging macroeconomic outlook.

Noninterest expense of $2.0 billion increased 1% compared with the second quarter of 2019 and slightly compared with the first quarter of 2020. The increase compared with the second quarter of 2019 was primarily driven by continued investments in technology, partially offset by lower business development and staff expenses. The slight increase compared with the first quarter of 2020 reflects

BNY Mellon 17

continued investments in technology, offset by lower staff expense.

Year-to-date 2020 compared with year-to-date 2019

Total revenue of $6.3 billion increased 6% compared with the first six months of 2019. Asset Servicing revenue of $3.0 billion increased 6%, primarily reflecting higher foreign exchange and other trading revenue and higher volumes from existing clients, partially offset by lower net interest revenue. Pershing revenue of $1.2 billion increased 9%, primarily reflecting higher clearing volumes and money market balances, partially offset by the impact of rate-driven money market fee waivers.

Issuer Services revenue of $850 million increased 1%, primarily reflecting higher Depositary Receipts and Corporate Trust fees. Treasury Services revenue of $679 million increased 7%, primarily reflecting higher fees and net interest revenue. Clearance and Collateral Management revenue of $595 million increased 6%, primarily reflecting growth in collateral management and clearance volumes and higher net interest revenue.

Noninterest expense of $4.0 billion increased 1% compared with the first six months of 2019 primarily reflecting continued investments in technology, partially offset by lower business development (travel and marketing) and staff expenses.

Investment and Wealth Management business (formerly Investment Management business)

																										YTD20
																2Q20 vs.										vs.
(dollars in millions)	2Q20			1Q20			4Q19			3Q19			2Q19			1Q20		2Q19		YTD20			YTD19			YTD19
Revenue:
Investment management fees (a)	$	782		$	812		$	836		$	830		$	831		(4	)%	(6	)%	$	1,594		$	1,641		(3	)%
Performance fees	5			50			48			2			2			N/M		150		55			33			67
Investment management and performance fees (b)	787			862			884			832			833			(9	)	(6	)	1,649			1,674			(1	)
Distribution and servicing	34			43			44			45			44			(21	)	(23	)	77			89			(13	)
Other (a)	17			(59		)	(4		)	(39		)	(23		)	N/M		N/M		(42		)	(40		)	N/M
Total fee and other revenue (a)	838			846			924			838			854			(1	)	(2	)	1,684			1,723			(2	)
Net interest revenue	48			52			47			49			59			(8	)	(19	)	100			126			(21	)
Total revenue	886			898			971			887			913			(1	)	(3	)	1,784			1,849			(4	)
Provision for credit losses	7			9			—			—			(2		)	N/M		N/M		16			(1		)	N/M
Noninterest expense (excluding amortization of intangible assets)	650			687			722			582			646			(5	)	1		1,337			1,306			2
Amortization of intangible assets	8			8			9			10			9			—		(11	)	16			18			(11	)
Total noninterest expense	658			695			731			592			655			(5	)	—		1,353			1,324			2
Income before income taxes	$	221		$	194		$	240		$	295		$	260		14	%	(15	)%	$	415		$	526		(21	)%
Pre-tax operating margin	25		%	22		%	25		%	33		%	29		%					23		%	28		%
Adjusted pre-tax operating margin – Non-GAAP (c)	28		%	24		%	27		%	37		%	32		%					26		%	32		%
Total revenue by line of business:
Investment Management (formerly Asset Management)	$	621		$	620		$	692		$	608		$	622		—	%	—	%	$	1,241		$	1,262		(2	)%
Wealth Management	265			278			279			279			291			(5	)	(9	)	543			587			(7	)
Total revenue by line of business	$	886		$	898		$	971		$	887		$	913		(1	)%	(3	)%	$	1,784		$	1,849		(4	)%
Average balances:
Average loans	$	11,791		$	12,124		$	12,022		$	12,013		$	12,205		(3	)%	(3	)%	$	11,958		$	12,271		(3	)%
Average deposits	$	17,491		$	16,144		$	15,195		$	14,083		$	14,615		8	%	20	%	$	16,817		$	15,211		11	%

(a) Total fee and other revenue includes the impact of the consolidated investment management funds, net of noncontrolling interests. Additionally, other revenue includes asset servicing fees, treasury services fees, foreign exchange and other trading revenue and investment and other income.

(b) On a constant currency basis, investment management and performance fees decreased 4% (Non-GAAP) compared with the second quarter of 2019. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page 45 for the reconciliation of this Non-GAAP measure.

(c) Net of distribution and servicing expense. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page 45 for the reconciliation of this Non-GAAP measure.

N/M - Not meaningful.

18 BNY Mellon

AUM trends																2Q20 vs.
(dollars in billions)	2Q20			1Q20			4Q19			3Q19			2Q19			1Q20		2Q19
AUM at period end, by product type: (a)
Equity	$	141		$	120		$	154		$	147		$	152		18	%	(7	)%
Fixed income	224			211			224			211			209			6		7
Index	333			274			339			321			322			22		3
Liability-driven investments	752			705			728			742			709			7		6
Multi-asset and alternative investments	185			171			192			182			184			8		1
Cash	326			315			273			278			267			3		22
Total AUM by product type	$	1,961		$	1,796		$	1,910		$	1,881		$	1,843		9	%	6	%
Changes in AUM: (a)
Beginning balance of AUM	$	1,796		$	1,910		$	1,881		$	1,843		$	1,841
Net inflows (outflows):
Long-term strategies:
Equity	(2		)	(2		)	(6		)	(4		)	(2		)
Fixed income	4			—			5			2			(4		)
Liability-driven investments	(2		)	(5		)	(3		)	(4		)	1
Multi-asset and alternative investments	—			(1		)	3			(1		)	1
Total long-term active strategies (outflows)	—			(8		)	(1		)	(7		)	(4		)
Index	9			3			(5		)	(3		)	(22		)
Total long-term strategies inflows (outflows)	9			(5		)	(6		)	(10		)	(26		)
Short-term strategies:
Cash	11			43			(7		)	11			2
Total net inflows (outflows)	20			38			(13		)	1			(24		)
Net market impact	143			(91		)	(20		)	66			42
Net currency impact	2			(61		)	62			(29		)	(16		)
Ending balance of AUM	$	1,961		$	1,796		$	1,910		$	1,881		$	1,843		9	%	6	%
Wealth Management client assets (b)	$	254		$	236		$	266		$	259		$	257		8	%	(1	)%

(a)    Excludes securities lending cash management assets and assets managed in the Investment Services business.

(b)    Includes AUM and AUC/A in the Wealth Management business.

Business description

Our Investment and Wealth Management business consists of two lines of business, Investment Management and Wealth Management. Our investment firms deliver a highly diversified portfolio of investment strategies independently, and through our global distribution network, to institutional and retail clients globally. BNY Mellon Wealth Management provides investment management, custody, wealth and estate planning and private banking services. See pages 16 and 17 of our 2019 Annual Report for additional information on our Investment and Wealth Management business.

Review of financial results

AUM increased 6% compared with June 30, 2019 primarily reflecting higher market values and net inflows, partially offset by the unfavorable impact of a stronger U.S. dollar (principally versus the British pound).

Net long-term strategy inflows were $9 billion in the second quarter of 2020, primarily resulting from inflows of index funds. Short-term strategy inflows were $11 billion in the second quarter of 2020. Market and regulatory trends have resulted in increased demand for lower fee asset management products and for performance-based fees.

Total revenue of $886 million decreased 3% compared with the second quarter of 2019 and 1% compared with the first quarter of 2020.

Investment Management revenue of $621 million decreased slightly compared with the second quarter of 2019 and increased slightly compared with the first quarter of 2020. The decrease compared with the second quarter of 2019 primarily reflects the unfavorable change in the mix of AUM since the second quarter of 2019 and the impact of money market fee waivers, partially offset by equity investment gains (net of hedges), including seed capital. The increase compared with the first quarter of 2020 primarily reflects equity investment gains (net of hedges), including seed capital, partially offset

BNY Mellon 19

by the timing of performance fees and the impact of money market fee waivers.

Wealth Management revenue of $265 million decreased 9% compared with the second quarter of 2019 and 5% compared with the first quarter of 2020. Both decreases primarily reflect lower net interest revenue and a shift within portfolios to lower fee asset classes.

Revenue generated in the Investment and Wealth Management business included 40% from non-U.S. sources in the second quarter of 2020, compared with 38% in the second quarter of 2019 and 42% in the first quarter of 2020.

Noninterest expense of $658 million increased slightly compared with the second quarter of 2019 and decreased 5% compared with the first quarter of 2020. The increase compared with the second quarter of 2019 primarily reflects higher continued investments in technology. The decrease compared with the first quarter of 2020 primarily reflects lower staff and other expenses.

Year-to-date 2020 compared with year-to-date 2019

Total revenue of $1.8 billion decreased 4% compared with the first six months of 2019. Investment Management revenue of $1.2 billion decreased 2% primarily reflecting an unfavorable change in the mix of AUM, equity investment losses (net of hedges), including seed capital, and the impact of fee waivers, partially offset by higher performance fees and market values. Wealth Management revenue of $543 million decreased 7% reflecting lower net interest revenue.

Noninterest expense of $1.4 billion increased 2% compared with the first six months of 2019, primarily reflecting higher professional, legal and other purchased services expense and higher investments in technology, partially offset by the favorable impact of a stronger U.S. dollar (principally versus the British pound).

Other segment

(in millions)	2Q20			1Q20			4Q19			3Q19			2Q19			YTD20			YTD19
Fee revenue (loss)	$	29		$	21		$	817		$	(5	)	$	24		$	50		$	41
Net securities gains (losses)	9			9			(23		)	(1		)	7			18			8
Total fee and other revenue (loss)	38			30			794			(6		)	31			68			49
Net interest (expense)	(36		)	(44		)	(10		)	(80		)	(40		)	(80		)	(70		)
Total revenue (loss)	2			(14		)	784			(86		)	(9		)	(12		)	(21		)
Provision for credit losses	(9		)	11			(3		)	(1		)	(2		)	2			(4		)
Noninterest expense	39			30			54			25			29			69			78
(Loss) income before income taxes	$	(28	)	$	(55	)	$	733		$	(110	)	$	(36	)	$	(83	)	$	(95	)
Average loans and leases	$	1,815		$	1,961		$	1,974		$	1,817		$	1,764		$	1,887		$	1,774

See page 18 of our 2019 Annual Report for additional information on the Other segment.

Review of financial results

Fee revenue, net securities gains (losses) and net interest expense include corporate treasury and other investment activity, including hedging activity which offsets between fee revenue and net interest expense.

Fee revenue increased $5 million compared with the second quarter of 2019 and $8 million compared with the first quarter of 2020, primarily reflecting higher

equity investment income, partially offset by sequentially lower foreign currency translation gains.

Net interest expense decreased $4 million compared with the second quarter of 2019 and $8 million compared with the first quarter of 2020, primarily reflecting corporate treasury activity.

Noninterest expense increased $10 million compared with the second quarter of 2019 and $9 million compared to the first quarter of 2020, primarily reflecting higher staff expense.

20 BNY Mellon

Year-to-date 2020 compared with year-to-date 2019

Losses before taxes decreased $12 million compared with the first six months of 2019. Total loss decreased $9 million, primarily reflecting higher foreign currency translation gains and net securities gains, partially offset by corporate treasury activity.

Critical accounting estimates

Our significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements in our 2019 Annual Report and in Note 2 of the Notes to Consolidated Financial Statements in this Form 10-Q. Our critical accounting estimates are those related to the allowance for credit losses, fair value of financial instruments and derivatives, goodwill and other intangibles and litigation and regulatory contingencies, as referenced below.

Critical accounting estimates	Reference
Allowance for credit losses	First quarter 2020 Form 10-Q, pages 19-20.
Fair value of financial instruments and derivatives	2019 Annual Report, pages 23-24.
Goodwill and other intangibles	2019 Annual Report, pages 24-25 and First quarter 2020 Form 10-Q, pages 20-21. Also, see below.
Litigation and regulatory contingencies	“Legal proceedings” in Note 18 of the Notes to Consolidated Financial Statements.

Goodwill and other intangible assets

BNY Mellon’s business segments include six reporting units for which goodwill impairment testing is performed on an annual basis. The Investment Services segment is comprised of four reporting units and the Investment and Wealth Management segment is comprised of two reporting units.

In the second quarter of 2020, we performed our annual goodwill impairment test on all six reporting units using an income approach to estimate fair values of each reporting unit. Estimated cash flows used in the income approach were based on management’s projections as of March 31, 2020. The discount rate applied to these cash flows was 10% and incorporated a 7% market equity risk premium. Estimated cash flows extend far into the future, and, by their nature, are difficult to estimate over such an extended time frame.

As a result of the annual goodwill impairment test of the six reporting units, no goodwill impairment was recognized. The fair values of five of the Company’s reporting units were substantially in excess of the respective reporting units’ carrying value. The Investment Management (formerly Asset Management) reporting unit, with $7.2 billion of allocated goodwill, which is one of the two reporting units in the Investment and Wealth Management segment, exceeded its carrying value by approximately 5%. For the Investment Management reporting unit, in the future, small changes in the assumptions, such as changes in the level of AUM and operating margin, could produce a non-cash goodwill impairment. See “Critical accounting estimates” in our 2019 Annual Report for additional information on the annual goodwill impairment test.

As of June 30, 2020, if the discount rate applied to the estimated cash flows was increased or decreased by 25 basis points, the fair value of the Investment Management reporting unit would decrease or increase by 4%, respectively. Similarly, if the long-term growth rate was increased or decreased by 10 basis points, the fair value of the Investment Management reporting unit would increase or decrease by approximately 1%, respectively.

Consolidated balance sheet review

One of our key risk management objectives is to maintain a balance sheet that remains strong throughout market cycles to meet the expectations of our major stakeholders, including our shareholders, clients, creditors and regulators.

We also seek to undertake overall liquidity risk, including intraday liquidity risk, that stays within our risk appetite. The objective of our balance sheet management strategy is to maintain a balance sheet that is characterized by strong liquidity and asset quality, ready access to external funding sources at competitive rates and a strong capital structure that supports our risk-taking activities and is adequate to absorb potential losses. In managing the balance sheet, appropriate consideration is given to balancing the competing needs of maintaining sufficient levels of liquidity and complying with applicable regulations and supervisory expectations while optimizing profitability.

At June 30, 2020, total assets were $442 billion, compared with $382 billion at Dec. 31, 2019. The increase in total assets was primarily driven by higher

BNY Mellon 21

securities and interest-bearing deposits with the Federal Reserve and other central banks, resulting from significant deposit inflows. Deposits totaled $305 billion at June 30, 2020, compared with $259 billion at Dec. 31, 2019. The increase reflects the current macroeconomic environment. Total interest-bearing deposits as a percentage of total interest-earning assets were 59% at June 30, 2020 and 62% at Dec. 31, 2019. The higher level of client deposits received in the first six months of 2020 was primarily placed in the securities portfolio or with the Federal Reserve and other central banks.

At June 30, 2020, available funds totaled $172 billion which include cash and due from banks, interest-bearing deposits with the Federal Reserve and other central banks, interest-bearing deposits with banks and federal funds sold and securities purchased under resale agreements. This compares with available funds of $145 billion at Dec. 31, 2019. Total available funds as a percentage of total assets were 39% at June 30, 2020 and 38% at Dec. 31, 2019. For additional information on our available funds, see “Liquidity and dividends.”

Securities were $155 billion, or 35% of total assets, at June 30, 2020, compared with $123 billion, or 32% of total assets, at Dec. 31, 2019. The increase in securities primarily reflects investments in U.S. Treasury securities, agency residential mortgage-backed securities (“RMBS”), sovereign debt/sovereign guaranteed securities, commercial paper/CDs and an increase in unrealized pre-tax gain. For additional information on our securities portfolio, see “Securities” and Note 4 of the Notes to Consolidated Financial Statements.

Loans were $55.4 billion, or 13% of total assets, at June 30, 2020, compared with $55.0 billion, or 14% of total assets, at Dec. 31, 2019. The increase was

primarily driven by higher overdrafts and higher loans in the commercial portfolio, partially offset by lower loans in the financial institutions portfolio. For additional information on our loan portfolio, see “Loans” and Note 5 of the Notes to Consolidated Financial Statements.

Long-term debt totaled $27.6 billion at June 30, 2020 and $27.5 billion at Dec. 31, 2019. Issuances of $2.25 billion and an increase in the fair value of hedged long-term debt were partially offset by maturities and a redemption. For additional information on long-term debt, see “Liquidity and dividends.”

The Bank of New York Mellon Corporation total shareholders’ equity increased to $43.7 billion at June 30, 2020 from $41.5 billion at Dec. 31, 2019. For additional information, see “Capital.”

Country risk exposure

The following table presents BNY Mellon’s top 10 exposures by country (excluding the U.S.) as of June 30, 2020, as well as certain countries with higher-risk profiles, and is presented on an internal risk management basis. We monitor our exposure to these and other countries as part of our internal country risk management process.

The country risk exposure below reflects the Company’s risk to an immediate default of the counterparty or obligor based on the country of residence of the entity which incurs the liability. If there is credit risk mitigation, the country of residence of the entity providing the risk mitigation is the country of risk. The country of risk for securities is generally based on the domicile of the issuer of the security.

22 BNY Mellon

Country risk exposure at June 30, 2020	Interest-bearing deposits										Total exposure
(in billions)	Central banks		Banks		Lending (a)		Securities (b)		Other (c)
Top 10 country exposure:
United Kingdom (“UK”)	$	15.0	$	0.5	$	1.4	$	5.6	$	2.3	$	24.8
Germany	16.7		0.7		0.7		4.3		0.3		22.7
Japan	19.2		0.9		0.2		0.7		0.1		21.1
Canada	—		2.3		0.2		4.4		0.9		7.8
Belgium	5.9		0.5		0.2		0.5		—		7.1
China	—		2.9		1.5		—		0.1		4.5
France	—		0.1		—		3.1		0.3		3.5
Ireland	0.7		0.1		0.3		0.7		1.5		3.3
Luxembourg	0.8		—		0.1		0.1		1.8		2.8
Spain	—		0.2		—		2.4		0.1		2.7
Total Top 10 country exposure	$	58.3	$	8.2	$	4.6	$	21.8	$	7.4	$	100.3	(d)
Select country exposure:
Italy	$	0.1	$	0.4	$	—	$	1.1	$	—	$	1.6
Brazil	—		—		1.2		0.1		0.1		1.4
Total select country exposure	$	0.1	$	0.4	$	1.2	$	1.2	$	0.1	$	3.0

(a) Lending includes loans, acceptances, issued letters of credit, net of participations, and lending-related commitments.

(b) Securities include both the available-for-sale and held-to-maturity portfolios.

(c) Other exposures include over-the-counter (“OTC”) derivative and securities financing transactions, net of collateral.

(d) The top 10 country exposures comprise approximately 80% of our total non-U.S. exposure.

Based on our internal country risk management process at June 30, 2020, our largest country risk exposure was to the UK, which withdrew from the European Union (“EU”) on Jan. 31, 2020. For additional information, see “Other Matters - UK’s Withdrawal from the EU (“Brexit”)” and “Risk Factors - The UK’s withdrawal from the EU may have negative effects on global economic conditions, global financial markets, and our business and results of operations” both included in our 2019 Annual Report.

Events in recent years have resulted in increased focus on Italy and Brazil. The country risk exposure to Italy primarily consists of investment grade sovereign debt. The country risk exposure to Brazil

is primarily short-term trade finance loans extended to large financial institutions. We also have operations in Brazil providing investment services and investment management services.

Securities

In the discussion of our securities portfolio, we have included certain credit ratings information because the information can indicate the degree of credit risk to which we are exposed. Significant changes in ratings classifications for our securities portfolio could indicate increased credit risk for us and could be accompanied by a reduction in the fair value of our securities portfolio.

BNY Mellon 23

The following table shows the distribution of our total securities portfolio.

Securities portfolio	March 31, 2020			2Q20 change in unrealized gain (loss)			June 30, 2020					Fair value as a % of amortized cost (a)		Unrealized gain (loss)				Ratings (b)
																						BBB+/ BBB-		BB+ and lower		A1+/A2 & SP-1+
(dollars in millions)	Fair value						Amortized cost		Fair value									AAA/ AA-		A+/ A-								Not rated
Agency RMBS	$	57,074		$	455		$	58,874	$	60,401		103	%	$	1,527			100	%	—	%	—	%	—	%	—	%	—	%
U.S. Treasury	24,825			(31		)	28,224		28,651			102		427				100		—		—		—		—		—
Sovereign debt/sovereign guaranteed (c)	13,833			47			16,698		16,868			101		170				75		6		18		1		—		—
Agency commercial mortgage-backed securities (“MBS”)	11,416			159			11,339		11,731			103		392				100		—		—		—		—		—
Foreign covered bonds (d)	5,349			62			5,548		5,598			101		50				100		—		—		—		—		—
Supranational	4,339			27			5,434		5,484			101		50				100		—		—		—		—		—
U.S. government agencies	3,346			29			4,984		5,056			101		72				100		—		—		—		—		—
Collateralized loan obligations (“CLOs”)	4,098			149			4,526		4,432			98		(94		)		99		—		—		—		—		1
Foreign government agencies (e)	2,761			14			3,536		3,575			101		39				95		5		—		—		—		—
Commercial paper/CDs	3,465			5			3,386		3,392			100		6				—		—		—		—		100		—
Other asset-backed securities (“ABS”)	2,220			56			2,724		2,743			101		19				99		—		1		—		—		—
Non-agency commercial MBS	2,446			140			2,517		2,602			103		85				100		—		—		—		—		—
Non-agency RMBS (f)	1,548			66			1,537		1,672			109		135				50		8		2		24		—		16
State and political subdivisions	1,001			12			1,166		1,196			103		30				76		22		—		—		1		1
Corporate bonds	818			28			789		831			105		42				19		68		13		—		—		—
Other	1			—			1		1			100		—				—		—		—		—		—		100
Total securities	$	138,540	(g)	$	1,218		$	151,283	$	154,233	(g)	102	%	$	2,950		(g)(h)	94	%	2	%	2	%	—	%	2	%	—	%

(a) Amortized cost reflects historical impairments.

(b) Represents ratings by Standard & Poor’s (“S&P”) or the equivalent.

(c) Primarily consists of exposure to UK, France, Germany, Spain, Italy and Singapore.

(d) Primarily consists of exposure to Canada, UK, Australia and Norway.

(e) Primarily consists of exposure to Germany, the Netherlands and Sweden.

(f) Includes RMBS that were included in the former Grantor Trust of $535 million at March 31, 2020 and $538 million at June 30, 2020.

(g) Includes net unrealized losses on derivatives hedging securities available-for-sale (including terminated hedges) of $1,846 million at March 31, 2020 and $1,817 million at June 30, 2020.

(h) Includes unrealized gains of $1,582 million at June 30, 2020 related to available-for-sale securities, net of hedges.

The fair value of our securities portfolio, including related hedges, was $154.2 billion at June 30, 2020, compared with $122.7 billion at Dec. 31, 2019. The increase primarily reflects investments in U.S. Treasury securities, agency RMBS, sovereign debt/ sovereign guaranteed securities, commercial paper/CDs and an increase in unrealized pre-tax gain. At June 30, 2020, the securities portfolio, including the impact of interest rate swap hedges, is 74% fixed rate and 26% floating rate.

Included in the securities portfolio at June 30, 2020 were $1.2 billion of commercial paper and $697 million of CDs purchased from affiliated money market mutual funds in order to provide liquidity support to the funds. Additionally, at June 30, 2020, the securities portfolio included $1.5 billion of commercial paper and CDs purchased from money market mutual funds managed by third parties and funded through the MMLF program.

At June 30, 2020, the securities portfolio had a net unrealized gain, including the impact of related hedges, of $3.0 billion, compared with $796 million at Dec. 31, 2019. The increase in the net unrealized pre-tax gain was primarily driven by lower market interest rates.

The unrealized gain (after-tax) on our available-for-sale securities portfolio, net of hedges, included in accumulated other comprehensive income (“OCI”) was $1.2 billion at June 30, 2020, compared with $361 million at Dec. 31, 2019. The increase in the unrealized gain, net of tax, was primarily driven by lower market interest rates.

At June 30, 2020, 94% of the securities in our portfolio were rated AAA/AA-, compared with 95% at Dec. 31, 2019.

24 BNY Mellon

See Note 4 of the Notes to Consolidated Financial Statements for the pre-tax net securities gains (losses) by security type. See Note 15 of the Notes to

Consolidated Financial Statements for details of securities by level in the fair value hierarchy.

The following table presents the amortizable purchase premium (net of discount) related to the securities portfolio and accretable discount related to the 2009 restructuring of the securities portfolio.

Net premium amortization and discount accretion of securities (a)
(dollars in millions)	2Q20		1Q20		4Q19		3Q19		2Q19
Amortizable purchase premium (net of discount) relating to securities:
Balance at period end	$	1,693	$	1,555	$	1,319	$	1,308	$	1,315
Estimated average life remaining at period end (in years)	3.7		3.8		4.3		4.2		4.5
Amortization	$	125	$	101	$	100	$	95	$	91
Accretable discount related to the prior restructuring of the securities portfolio:
Balance at period end	$	145	$	159	$	163	$	171	$	181
Estimated average life remaining at period end (in years)	5.8		6.1		6.3		6.3		6.3
Accretion	$	10	$	11	$	12	$	13	$	13

(a) Amortization of purchase premium decreases net interest revenue while accretion of discount increases net interest revenue. Both were recorded on a level yield basis.

Loans 

Total exposure – consolidated	June 30, 2020						Dec. 31, 2019
(in billions)	Loans		Unfunded commitments		Total exposure		Loans		Unfunded commitments		Total exposure
Non-margin loans:
Financial institutions	$	10.8	$	35.5	$	46.3	$	12.5	$	34.4	$	46.9
Commercial	2.4		11.8		14.2		1.8		12.6		14.4
Subtotal institutional	13.2		47.3		60.5		14.3		47.0		61.3
Wealth management loans and mortgages	15.9		0.9		16.8		16.2		0.8		17.0
Commercial real estate	6.2		3.2		9.4		5.6		3.6		9.2
Lease financings	1.0		—		1.0		1.1		—		1.1
Other residential mortgages	0.5		—		0.5		0.5		—		0.5
Overdrafts	4.2		—		4.2		2.7		—		2.7
Other	1.5		—		1.5		1.2		—		1.2
Subtotal non-margin loans	42.5		51.4		93.9		41.6		51.4		93.0
Margin loans	12.9		0.1		13.0		13.4		0.1		13.5
Total	$	55.4	$	51.5	$	106.9	$	55.0	$	51.5	$	106.5

 

At June 30, 2020, total exposures of $106.9 billion increased slightly compared with Dec. 31, 2019, primarily reflecting higher overdrafts, partially offset by lower financial institutions exposure and margin loans.

Our financial institutions and commercial portfolios comprise our largest concentrated risk. These portfolios comprised 57% of our total exposure at June 30, 2020 and 58% at Dec. 31, 2019. Additionally, most of our overdrafts relate to financial institutions.

BNY Mellon 25

Financial institutions

The financial institutions portfolio is shown below.

Financial institutions portfolio exposure (dollars in billions)	June 30, 2020										Dec. 31, 2019
	Loans		Unfunded commitments		Total exposure		% Inv. grade		% due <1 yr.		Loans		Unfunded commitments		Total exposure
Securities industry	$	1.6	$	24.5	$	26.1	98	%	99	%	$	2.9	$	23.4	$	26.3
Banks	7.0		1.1		8.1		82		98		7.4		1.1		8.5
Asset managers	1.3		6.3		7.6		99		84		1.3		6.4		7.7
Insurance	0.1		2.7		2.8		100		16		—		2.7		2.7
Government	0.1		0.2		0.3		100		64		0.1		0.3		0.4
Other	0.7		0.7		1.4		96		55		0.8		0.5		1.3
Total	$	10.8	$	35.5	$	46.3	95	%	90	%	$	12.5	$	34.4	$	46.9

 

The financial institutions portfolio exposure was $46.3 billion at June 30, 2020, a decrease of 1% compared with Dec. 31, 2019, primarily reflecting lower exposure to banks and the securities industry.

Financial institution exposures are high quality, with 95% of the exposures meeting the investment grade equivalent criteria of our internal credit rating classification at June 30, 2020. Each customer is assigned an internal credit rating, which is mapped to an equivalent external rating agency grade based upon a number of dimensions, which are continually evaluated and may change over time. For ratings of non-U.S. counterparties, our internal credit rating is generally capped at a rating equivalent to the sovereign rating of the country where the counterparty resides, regardless of the internal credit rating assigned to the counterparty or the underlying collateral.

In addition, 75% of the financial institutions exposure is secured. For example, securities industry clients and asset managers often borrow against marketable securities held in custody.

The exposure to financial institutions is generally short-term with 90% of the exposures expiring within one year. At June 30, 2020, 14% of the exposure to

financial institutions had an expiration within 90 days, compared with 18% at Dec. 31, 2019.

At June 30, 2020, the secured intraday credit provided to dealers in connection with their tri-party repo activity totaled $20.6 billion and was included in the securities industry portfolio. Dealers secure the outstanding intraday credit with high-quality liquid collateral having a market value in excess of the amount of the outstanding credit. Secured intraday credit facilities represent nearly half of the exposure in the financial institutions portfolio and are reviewed and reapproved annually.

Our banks exposure primarily relates to our global trade finance. These exposures are short-term in nature, with 98% due in less than one year. The investment grade percentage of our bank exposure was 82% at June 30, 2020, compared with 77% at Dec. 31, 2019. Our non-investment grade exposures are primarily trade finance loans in Brazil.

The asset managers portfolio exposure is high-quality, with 99% of the exposures meeting our investment grade equivalent ratings criteria as of June 30, 2020. These exposures are generally short-term liquidity facilities, with the majority to regulated mutual funds.

26 BNY Mellon

Commercial

The commercial portfolio is presented below.

Commercial portfolio exposure	June 30, 2020										Dec. 31, 2019
(dollars in billions)	Loans		Unfunded commitments		Total exposure		% Inv. grade		% due <1 yr.		Loans		Unfunded commitments		Total exposure
Manufacturing	$	1.1	$	3.5	$	4.6	94	%	15	%	$	0.9	$	4.2	$	5.1
Services and other	1.1		3.3		4.4		94		33		0.6		3.7		4.3
Energy and utilities	0.1		4.1		4.2		89		4		0.3		3.7		4.0
Media and telecom	0.1		0.9		1.0		93		—		—		1.0		1.0
Total	$	2.4	$	11.8	$	14.2	92	%	16	%	$	1.8	$	12.6	$	14.4

 

The commercial portfolio exposure was $14.2 billion at June 30, 2020, a decrease of 1% from Dec. 31, 2019, primarily driven by lower manufacturing exposure, partially offset by increased exposure in energy and utilities.

We have $741 million of total direct exposure to the oil and gas industry, most of which is reflected in the energy and utilities portfolio in the table above. This exposure is to exploration and production, refining and integrated companies and was 65% investment grade at June 30, 2020 and 91% at Dec. 31, 2019.

Our credit strategy is to focus on investment grade clients that are active users of our non-credit services. The following table summarizes the percentage of the financial institutions and commercial portfolio exposures that are investment grade.

Percentage of the portfolios that are investment grade
	Quarter ended
	June 30, 2020		March 31, 2020		Dec. 31, 2019		Sept. 30, 2019		June 30, 2019
Financial institutions	95	%	96	%	95	%	95	%	95	%
Commercial	92	%	94	%	96	%	95	%	95	%

Wealth management loans and mortgages

Our wealth management exposure was $16.8 billion at June 30, 2020, compared with $17.0 billion at Dec. 31, 2019. Wealth management loans and mortgages primarily consist of loans to high-net-worth individuals, which are secured by marketable securities and/or residential property. Wealth management mortgages are primarily interest-only, adjustable-rate mortgages with a weighted-average loan-to-value ratio of 62% at origination. Less than 1% of the mortgages were past due at June 30, 2020.

At June 30, 2020, the wealth management mortgage portfolio consisted of the following geographic concentrations: California - 23%; New York - 17%; Massachusetts - 10%; Florida - 8%; and other - 42%.

BNY Mellon 27

Commercial real estate

The composition of the commercial real estate portfolio by asset class, including percentage secured, is presented below.

Composition of commercial real estate portfolio by asset class	June 30, 2020				Dec. 31, 2019
	Total exposure		Percentage secured		Total exposure		Percentage secured
(in billions)
Office	$	3.2	40	%	$	3.1	40	%
Residential	3.1		44		3.1		44
Retail	1.0		9		1.0		8
Hotels	0.6		2		0.6		2
Mixed-use	0.6		2		0.6		2
Healthcare	0.3		1		0.3		—
Other	0.6		2		0.5		4
Total commercial real estate	$	9.4	65	%	$	9.2	65	%

Our commercial real estate exposure totaled $9.4 billion at June 30, 2020, compared with $9.2 billion at Dec. 31, 2019. Our income-producing commercial real estate facilities are focused on experienced owners and are structured with moderate leverage based on existing cash flows. Our commercial real estate lending activities also include construction and renovation facilities. Our client base consists of experienced developers and long-term holders of real estate assets. Loans are approved on the basis of existing or projected cash flows and supported by appraisals and knowledge of local market conditions. Development loans are structured with moderate leverage, and in many instances, involve some level of recourse to the developer.

At June 30, 2020, the unsecured portfolio consists of real estate investment trusts (“REITs”) and real estate operating companies, which are both primarily investment grade.

At June 30, 2020, our commercial real estate portfolio consisted of the following concentrations: New York metro - 41%; REITs and real estate operating companies - 35%; and other - 24%.

Lease financings

The lease financings portfolio exposure totaled $1.0 billion at June 30, 2020 and $1.1 billion at Dec. 31, 2019. At June 30, 2020, approximately 98% of leasing exposure was investment grade, or investment grade equivalent and consisted of exposures backed by well-diversified assets, primarily large-ticket transportation equipment and real estate. The largest component of our lease residual value exposure is freight-related rail cars. Assets are both domestic and

foreign-based, with primary concentrations in the U.S. and Germany.

Other residential mortgages

The other residential mortgages portfolio primarily consists of 1-4 family residential mortgage loans and totaled $450 million at June 30, 2020 and $494 million at Dec. 31, 2019. Included in this portfolio at June 30, 2020 were $81 million of mortgage loans purchased in 2005, 2006 and the first quarter of 2007, of which 25% of the serviced loan balance was at least 60 days delinquent.

Overdrafts

Overdrafts primarily relate to custody and securities clearance clients and are generally repaid within two business days.

Other loans

Other loans primarily include loans to consumers that are fully collateralized with equities, mutual funds and fixed-income securities.

Margin loans

Margin loan exposure of $13.0 billion at June 30, 2020 and $13.5 billion at Dec. 31, 2019 was collateralized with marketable securities. Borrowers are required to maintain a daily collateral margin in excess of 100% of the value of the loan. Margin loans included $3.6 billion at June 30, 2020 and Dec. 31, 2019 related to a term loan program that offers fully collateralized loans to broker-dealers.

28 BNY Mellon

Allowance for credit losses

Our credit strategy is to focus on investment grade clients who are active users of our non-credit services. Our primary exposure to the credit risk of a

customer consists of funded loans, unfunded contractual commitments to lend, standby letters of credit (“SBLC”) and overdrafts associated with our custody and securities clearance businesses.

The following table details changes in our allowance for credit losses.

Allowance for credit losses activity	June 30, 2020				March 31, 2020				Dec. 31, 2019			June 30, 2019
(dollars in millions)
Beginning balance of allowance for credit losses	$	329			$	216			$	224		$	248
Impact of adopting ASU 2016-13	N/A				(55		)	(a)	N/A			N/A
Provision for credit losses	143				169			(a)	(8		)	(8		)
Net recoveries (charge-offs):
Loans:
Other residential mortgages	3				—				—			2
Wealth management loans and mortgages	—				—				—			(1		)
Other financial instruments	—				(1		)		N/A			N/A
Net recoveries (charge-offs)	3				(1		)		—			1
Ending balance of allowance for credit losses	$	475			$	329			$	216		$	241
Allowance for loan losses	$	302			$	140			$	122		$	146
Allowance for lending-related commitments	152				148				94			95
Allowance for financial instruments	21			(b)	41			(b)	N/A			N/A
Total allowance for credit losses	$	475			$	329			$	216		$	241
Non-margin loans	$	42,488			$	49,253			$	41,567		$	41,794
Margin loans	12,909				13,115				13,386			10,602
Total loans	$	55,397			$	62,368			$	54,953		$	52,396
Allowance for loan losses as a percentage of total loans	0.55		%		0.22		%		0.22		%	0.28		%
Allowance for loan losses as a percentage of non-margin loans	0.71				0.28				0.29			0.35
Allowance for loan losses and lending-related commitments as a percentage of total loans	0.82				0.46				0.39			0.46
Allowance for loan losses and lending-related commitments as a percentage of non-margin loans	1.07				0.58				0.52			0.58

(a) In the first quarter of 2020, we adopted new accounting guidance included in ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses On Financial Instruments, on a prospective basis. See Note 2 of the Notes to Consolidated Financial Statement for additional information. Includes the reclassification of credit-related reserves on accounts receivable of $4 million.

(b) Includes allowance for credit losses on federal funds sold and securities purchased under resale agreements, available-for-sale securities, held-to-maturity securities, accounts receivable, cash and due from banks and interest-bearing deposits with banks.

N/A - Not applicable.

The provision for credit losses was $143 million in the second quarter of 2020, primarily driven by our commercial real estate portfolio and reflecting increased downgrades and the continuation of the challenging macroeconomic outlook.

We had $12.9 billion of secured margin loans on our balance sheet at June 30, 2020 compared with $13.4 billion at Dec. 31, 2019. We have rarely suffered a loss on these types of loans. As a result, we believe that the ratio of allowance for loan losses and lending-related commitments as a percentage of non-margin loans is a more appropriate metric to measure the adequacy of the reserve.

Reverse repurchase agreements at June 30, 2020 were fully secured with high quality collateral. As a result, there was no allowance for credit losses related to these assets at June 30, 2020. This compares to an $18 million allowance at March 31, 2020. The decrease is driven by a reduction in exposure and improvement in collateral liquidity and values related to reverse repurchase agreements collateralized by non-agency debt securities.

The allowance for loan losses and allowance for lending-related commitments represent management’s estimate of lifetime expected losses in our credit portfolio. This evaluation process is subject to numerous estimates and judgments. To the extent actual results differ from forecasts or

BNY Mellon 29

management’s judgment, the allowance for credit losses may be greater or less than future charge-offs.

Based on an evaluation of the allowance for credit losses as discussed in “Critical accounting estimates” and Note 2 of the Notes to Consolidated Financial Statements, we have allocated our allowance for loans and lending-related commitments as presented below.

Allocation of allowance for loan losses and lending-related commitments
	June 30, 2020		March 31, 2020		(a)	Dec. 31, 2019		June 30, 2019
Commercial real estate	81	%	72	%		35	%	30	%
Commercial	9		9			28		32
Foreign	—		—		(b)	11		13
Financial institutions	4		6			9		9
Wealth management (c)	2		3			9		8
Other residential mortgages	3		5			6		6
Lease financings	1		5			2		2
Total	100	%	100	%		100	%	100	%

(a) In the first quarter of 2020, we adopted new accounting guidance included in ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, on a prospective basis. See Note 2 of the Notes to Consolidated Financial Statement for additional information.

(b) The allowance related to foreign exposure has been reclassified to the respective classes of financing receivables.

(c) Includes the allowance for credit losses on wealth management mortgages.

The allocation of the allowance for credit losses is inherently judgmental, and the entire allowance for credit losses is available to absorb credit losses regardless of the nature of the losses.

Our allowance for credit losses is sensitive to a number of inputs, most notably the credit ratings assigned to each borrower as well as macroeconomic forecast assumptions that are incorporated in our estimate of credit losses through the expected life of the loan portfolio. Thus, as the macroeconomic environment and related forecasts change, the allowance for credit losses may change materially. The following sensitivity analyses do not represent management’s expectations of the deterioration of our portfolios or the economic environment, but are provided as hypothetical scenarios to assess the sensitivity of the allowance for credit losses to changes in key inputs. If each credit were rated one grade better, the allowance would have decreased by $125 million, and if each credit were rated one grade worse, the allowance would have increased by $202 million. Our multi-scenario based macroeconomic forecast used in determining the June 30, 2020

allowance for credit losses consisted of three recessionary scenarios, each of varying severity and duration. The baseline scenario reflects moderate recovery across most key variables, whereas the upside scenario is principally a V-shaped recovery, and the downside scenario is reflective of W-shaped recovery in GDP and unemployment and deeper reductions in asset prices compared to the baseline. We placed the most weight on our baseline scenario, with the remaining weighting resulting in slightly more weight placed on the downside scenario than the upside scenario. From a sensitivity perspective, at June 30, 2020, if we had applied 100% weighting to the downside scenario, the allowance for credit losses would have been approximately $245 million higher.

Nonperforming assets

The table below presents our nonperforming assets.

Nonperforming assets	June 30, 2020			Dec. 31, 2019
(dollars in millions)
Nonperforming loans:
Other residential mortgages	$	58		$	62
Wealth management loans and mortgages	28			24
Total nonperforming loans	86			86
Other assets owned	2			3
Total nonperforming assets	$	88		$	89
Nonperforming assets ratio	0.16		%	0.16		%
Nonperforming assets ratio, excluding margin loans	0.21			0.21
Allowance for loan losses/nonperforming loans (a)	351.2			141.9
Allowance for loan losses/nonperforming assets (a)	343.2			137.1
Allowance for loan losses and lending-related commitments/nonperforming loans (a)(b)	527.9			251.2
Allowance for loan losses and lending-related commitments/nonperforming assets (a)(b)	515.9			242.7

(a) In the first quarter of 2020, we adopted new accounting guidance included in ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, on a prospective basis. See Note 2 of the Notes to Consolidated Financial Statement for additional information.

(b) Total allowance for credit losses includes both the allowance for credit losses on loans and lending-related commitments.

Lost interest

Interest revenue would have increased by $1 million in the second quarter of 2020 and first quarter of 2020, $4 million in the second quarter of 2019, $3 million in the first six months of 2020 and $7 million in the first six months of 2019, if nonperforming

30 BNY Mellon

loans at period-end had been performing for the entire respective periods.

Loan modifications

Due to the coronavirus pandemic, there have been two forms of relief provided for classifying loans as troubled debt restructurings (“TDRs”): The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and the Interagency Guidance. See Note 2 of the Notes to Consolidated Financial Statements for additional details on this guidance. Financial institutions may account for eligible loan modifications either under the CARES Act or the Interagency Guidance and we have elected to apply both, as applicable, in providing borrowers with loan modification relief in response to the coronavirus pandemic. We modified loans totaling $282 million in the second quarter of 2020 by providing short-term loan payment forbearances or modified principal and/or interest payments. We did not identify these modifications as TDRs. These loans were primarily residential mortgage and commercial real estate loans. During the loan modification period, these loans are not reported as nonperforming or past due. We modified other residential mortgage loans totaling less than $1 million in both the second quarter of 2019 and first quarter of 2020.

Deposits

Increased volatility coupled with the interest rate environment led to an increase in deposit levels as our clients increased the levels of cash placed with us. Total deposits were $305.5 billion at June 30, 2020, an increase of 18%, compared with $259.5 billion at Dec. 31, 2019.

Noninterest-bearing deposits were $78.1 billion at June 30, 2020 compared with $57.6 billion at Dec. 31, 2019. Interest-bearing deposits were $227.4 billion at June 30, 2020 compared with $201.9 billion at Dec. 31, 2019. See “Impact of coronavirus pandemic on our business” for additional information.

Short-term borrowings

We fund ourselves primarily through deposits and, to a lesser extent, other short-term borrowings and long-term debt. Short-term borrowings consist of federal funds purchased and securities sold under repurchase agreements, payables to customers and broker-

dealers, commercial paper and other borrowed funds. Certain short-term borrowings, for example, securities sold under repurchase agreements, require the delivery of securities as collateral.

Information related to federal funds purchased and securities sold under repurchase agreements is presented below.

Federal funds purchased and securities sold under repurchase agreements
	Quarter ended
(dollars in millions)	June 30, 2020			March 31, 2020			June 30, 2019
Maximum month-end balance during the quarter	$	14,512		$	16,644		$	12,127
Average daily balance (a)	$	14,209		$	13,919		$	11,809
Weighted-average rate during the quarter (a)	0.03		%	7.96		%	12.64		%
Ending balance (b)	$	14,512		$	13,128		$	11,757
Weighted-average rate at period end (b)	0.00		%	3.93		%	14.43		%

(a) Includes the average impact of offsetting under enforceable netting agreements of $66,606 million in the second quarter of 2020, $80,216 million in the first quarter of 2020 and $50,710 million in the second quarter of 2019. On a Non-GAAP basis, excluding the impact of offsetting, the weighted-average rates would have been 0.00% for the second quarter of 2020, 1.18% for the first quarter of 2020 and 2.39% for the second quarter of 2019. We believe providing the rates excluding the impact of netting is useful to investors as it is more reflective of the actual rates paid.

(b) Includes the impact of offsetting under enforceable netting agreements of $48,615 million at June 30, 2020, $80,203 million at March 31, 2020 and $78,433 million at June 30, 2019.

Fluctuations of federal funds purchased and securities sold under repurchase agreements reflect changes in overnight borrowing opportunities. The decreases in the weighted-average rates compared with June 30, 2019 and March 31, 2020 primarily reflect lower interest rates and repurchase agreement activity with the Fixed Income Clearing Corporation (“FICC”), where we record interest expense gross, but the ending and average balances reflect the impact of offsetting under enforceable netting agreements. This activity primarily relates to government securities collateralized resale and repurchase agreements executed with clients that are novated to and settle with the FICC.

BNY Mellon 31

Information related to payables to customers and broker-dealers is presented below.

Payables to customers and broker-dealers
	Quarter ended
(dollars in millions)	June 30, 2020			March 31, 2020			June 30, 2019
Maximum month-end balance during the quarter	$	25,012		$	24,016		$	19,149
Average daily balance (a)	$	23,944		$	20,629		$	18,679
Weighted-average rate during the quarter (a)	(0.01		)%	0.73		%	1.76		%
Ending balance	$	25,012		$	24,016		$	18,946
Weighted-average rate at period end	(0.01		)%	0.28		%	1.73		%

(a) The weighted-average rate is calculated based on, and is applied to, the average interest-bearing payables to customers and broker-dealers, which were $18,742 million in the second quarter of 2020, $16,386 million in the first quarter of 2020 and $15,666 million in the second quarter of 2019.

Payables to customers and broker-dealers represent funds awaiting re-investment and short sale proceeds payable on demand. Payables to customers and broker-dealers are driven by customer trading activity and market volatility.

Information related to commercial paper is presented below.

Commercial paper
	Quarter ended
(dollars in millions)	June 30, 2020			March 31, 2020			June 30, 2019
Maximum month-end balance during the quarter	$	665		$	3,379		$	8,894
Average daily balance	$	191		$	1,581		$	2,957
Weighted-average rate during the quarter	1.02		%	1.56		%	2.43		%
Ending balance	$	665		$	1,121		$	8,894
Weighted-average rate at period end	0.02		%	1.57		%	2.35		%

The Bank of New York Mellon issues commercial paper that matures within 397 days from the date of issue and is not redeemable prior to maturity or subject to voluntary prepayment. The fluctuations in the commercial paper balances primarily reflect funding of investments in short-term assets.

Information related to other borrowed funds is presented below.

Other borrowed funds
	Quarter ended
(dollars in millions)	June 30, 2020			March 31, 2020			June 30, 2019
Maximum month-end balance during the quarter	$	2,451		$	1,544		$	2,732
Average daily balance	$	2,272		$	719		$	2,455
Weighted-average rate during the quarter	1.30		%	2.27		%	3.36		%
Ending balance	$	1,628		$	1,544		$	1,921
Weighted-average rate at period end	1.37		%	2.01		%	3.84		%

Other borrowed funds primarily include borrowings from the Federal Home Loan Bank, the Federal Reserve Bank of Boston under the MMLF program, overdrafts of sub-custodian account balances in our Investment Services businesses, finance lease liabilities and borrowings under lines of credit by our Pershing subsidiaries. Overdrafts typically relate to timing differences for settlements. The decrease in other borrowed funds compared with June 30, 2019 primarily reflects a decrease in borrowings from the Federal Home Loan Bank, partially offset by borrowings from the Federal Reserve Bank of Boston under the MMLF program. The increase in other borrowed funds compared with March 31, 2020 primarily reflects higher borrowings from the Federal Reserve Bank of Boston under the MMLF program, partially offset by lower overdrafts of sub-custodian account balances in our Investment Services businesses and borrowings from the Federal Home Loan Bank.

Liquidity and dividends

BNY Mellon defines liquidity as the ability of the Parent and its subsidiaries to access funding or convert assets to cash quickly and efficiently, or to roll over or issue new debt, especially during periods of market stress, at a reasonable cost, and in order to meet its short-term (up to one year) obligations. Funding liquidity risk is the risk that BNY Mellon cannot meet its cash and collateral obligations at a reasonable cost for both expected and unexpected cash flow and collateral needs without adversely affecting daily operations or our financial condition. Funding liquidity risk can arise from funding mismatches, market constraints from the inability to convert assets into cash, the inability to hold or raise

32 BNY Mellon

cash, low overnight deposits, deposit run-off or contingent liquidity events.

Changes in economic conditions or exposure to credit, market, operational, legal and reputational risks also can affect BNY Mellon’s liquidity risk profile and are considered in our liquidity risk framework. See “Impact of coronavirus pandemic on our business” for additional information.

The Parent’s policy is to have access to sufficient unencumbered cash and cash equivalents at each quarter-end to cover maturities and other forecasted debt redemptions, net interest payments and net tax payments for the following 18-month period, and to provide sufficient collateral to satisfy transactions subject to Section 23A of the Federal Reserve Act. As of June 30, 2020, the Parent was in compliance with this policy.

For additional information on our liquidity policy, see “Risk Management - Liquidity Risk” in our 2019 Annual Report.

We monitor and control liquidity exposures and funding needs within and across significant legal entities, branches, currencies and business lines, taking into account, among other factors, any applicable restrictions on the transfer of liquidity among entities.

BNY Mellon also manages potential intraday liquidity risks. We monitor and manage intraday liquidity against existing and expected intraday liquid resources (such as cash balances, remaining intraday credit capacity, intraday contingency funding and available collateral) to enable BNY Mellon to meet its intraday obligations under normal and reasonably severe stressed conditions.

We define available funds for internal liquidity management purposes as cash and due from banks, interest-bearing deposits with the Federal Reserve and other central banks, interest-bearing deposits with banks and federal funds sold and securities purchased under resale agreements. The following table presents our total available funds at period end and on an average basis.

Available funds	June 30, 2020			Dec. 31, 2019			Average
(dollars in millions)							2Q20			1Q20			2Q19			YTD20			YTD19
Cash and due from banks	$	4,776		$	4,830		$	4,102		$	4,595		$	5,083		$	4,348		$	4,969
Interest-bearing deposits with the Federal Reserve and other central banks	112,728			95,042			94,229			80,403			61,756			87,316			62,665
Interest-bearing deposits with banks	18,045			14,811			21,093			17,081			13,666			19,087			13,761
Federal funds sold and securities purchased under resale agreements	36,638			30,182			30,265			34,109			38,038			32,187			33,528
Total available funds	$	172,187		$	144,865		$	149,689		$	136,188		$	118,543		$	142,938		$	114,923
Total available funds as a percentage of total assets	39		%	38		%	36		%	35		%	35		%	36		%	34		%

 

Total available funds were $172.2 billion at June 30, 2020, compared with $144.9 billion at Dec. 31, 2019. The increase was primarily due to higher interest-bearing deposits with the Federal Reserve and other central banks.

Average non-core sources of funds, such as federal funds purchased and securities sold under repurchase agreements, trading liabilities, commercial paper and other borrowed funds, were $18.2 billion for the six months ended June 30, 2020 and $18.4 billion for the six months ended June 30, 2019. The decrease primarily reflects a decrease in other borrowed funds and commercial paper, partially offset by an increase in federal funds purchased and securities sold under repurchase agreements.

Average foreign deposits, primarily from our European-based Investment Services businesses, were $103.1 billion for the six months ended June 30, 2020, compared with $91.4 billion for the six months ended June 30, 2019. Average interest-bearing domestic deposits were $101.0 billion for the six months ended June 30, 2020 and $72.4 billion for the six months ended June 30, 2019. The increase primarily reflects increased client activity.

Average payables to customers and broker-dealers were $17.6 billion for the six months ended June 30, 2020 and $15.9 billion for the six months ended June 30, 2019. Payables to customers and broker-dealers are driven by customer trading activity and market volatility.

BNY Mellon 33

Average long-term debt was $27.7 billion for the six months ended June 30, 2020 and $28.0 billion for six months ended June 30, 2019.

Average noninterest-bearing deposits increased to $66.5 billion for the six months ended June 30, 2020 from $53.8 billion for the six months ended June 30, 2019, primarily reflecting client activity.

A significant reduction in our Investment Services business would reduce our access to deposits. See

“Asset/liability management” for additional factors that could impact our deposit balances.

Sources of liquidity

The Parent’s three major sources of liquidity are access to the debt and equity markets, dividends from its subsidiaries, and cash on hand and cash otherwise made available in business-as-usual circumstances to the Parent through a committed credit facility with our intermediate holding company (“IHC”).

Our ability to access the capital markets on favorable terms, or at all, is partially dependent on our credit ratings, which are as follows:

Credit ratings at June 30, 2020
	Moody’s		S&P	Fitch		DBRS
Parent:
Long-term senior debt	A1		A	AA-		AA
Subordinated debt	A2		A-	A		AA (low)
Preferred stock	Baa1		BBB	BBB+		A
Outlook - Parent	Stable		Stable	Stable		Stable
The Bank of New York Mellon:
Long-term senior debt	Aa2		AA-	AA		AA (high)
Subordinated debt	NR		A	NR		NR
Long-term deposits	Aa1		AA-	AA+		AA (high)
Short-term deposits	P1		A-1+	F1+		R-1 (high)
Commercial paper	P1		A-1+	F1+		R-1 (high)
BNY Mellon, N.A.:
Long-term senior debt	Aa2	(a)	AA-	AA	(a)	AA (high)
Long-term deposits	Aa1		AA-	AA+		AA (high)
Short-term deposits	P1		A-1+	F1+		R-1 (high)
Outlook - Banks	Stable		Stable	Stable		Stable

(a) Represents senior debt issuer default rating.

NR - Not rated.

Long-term debt totaled $27.6 billion at June 30, 2020 and $27.5 billion at Dec. 31, 2019. Issuances of $2.25 billion and an increase in the fair value of hedged long-term debt were partially offset by maturities of $1.75 billion and a redemption of $1.25 billion. The Parent has $2.2 billion of long-term debt that will mature in the remainder of 2020.

In July 2020, the Parent redeemed $1.1 billion of 2.6% senior notes due in August 2020 at par plus accrued and unpaid interest.

In May 2020, the Parent issued 1,000,000 depositary shares, each representing a 1/100th interest in a share of the Parent’s Series G Noncumulative Perpetual Preferred Stock (the “Series G Preferred Stock”). The Series G Preferred Stock has an aggregate

liquidation preference of $1 billion. The Parent will pay dividends on the Series G Preferred Stock, if declared by its board of directors on each March 20 and September 20, at an annual rate equal to 4.70% from the original issue date to but excluding, Sept. 20, 2025; and at a floating rate equal to the five-year treasury rate (as defined in the certificate of designation) on the date that is three business days prior to the reset date plus 4.358% for each reset period, from and including Sept. 20, 2025. The floating rate will initially reset on Sept. 20, 2025 and subsequently on each date falling on the fifth anniversary of the preceding reset date.

The Bank of New York Mellon may issue notes and CDs. There were no CDs outstanding at June 30, 2020. At Dec. 31, 2019, $1.1 billion of CDs were

34 BNY Mellon

outstanding. At June 30, 2020 and Dec. 31, 2019, $32 million and $1.3 billion, respectively, of notes were outstanding.

The Bank of New York Mellon also issues commercial paper that matures within 397 days from the date of issue and is not redeemable prior to maturity or subject to voluntary prepayment. The average commercial paper outstanding was $886 million for the six months ended June 30, 2020 and $2.2 billion for the six months ended June 30, 2019. Commercial paper outstanding was $665 million at June 30, 2020 and $4.0 billion at Dec. 31, 2019.

Subsequent to June 30, 2020, our U.S. bank subsidiaries could declare dividends to the Parent of approximately $796 million, without the need for a regulatory waiver. In addition, at June 30, 2020, non-bank subsidiaries of the Parent had liquid assets of approximately $1.6 billion. Restrictions on our ability to obtain funds from our subsidiaries are discussed in more detail in “Supervision and Regulation - Capital Planning and Stress Testing - Payment of Dividends, Stock Repurchases and Other Capital Distributions” and in Note 19 of the Notes to Consolidated Financial Statements in our 2019 Annual Report.

Pershing LLC has uncommitted lines of credit in place for liquidity purposes which are guaranteed by the Parent. Pershing LLC has three separate uncommitted lines of credit amounting to $750 million in aggregate. There were no borrowings under these lines in the second quarter of 2020. Pershing Limited, an indirect UK-based subsidiary of BNY Mellon, has three separate uncommitted lines of credit amounting to $350 million in aggregate. Average borrowings under these lines were $31 million, in aggregate, in the second quarter of 2020.

BNY Mellon Capital Markets, LLC also has an uncommitted line of credit in place for $100 million for liquidity purposes. There were no borrowings under this line in the second quarter of 2020.

The double leverage ratio is the ratio of our equity investment in subsidiaries divided by our consolidated Parent company equity, which includes our noncumulative perpetual preferred stock. In short, the double leverage ratio measures the extent to which equity in subsidiaries is financed by Parent company debt. As the double leverage ratio increases, this can reflect greater demands on a company’s cash flows in order to service interest

payments and debt maturities. BNY Mellon’s double leverage ratio is managed in a range considering the high level of unencumbered available liquid assets held in its principal subsidiaries (such as central bank deposit placements and government securities), the Company’s cash generating fee-based business model, with fee revenue representing 79% of total revenue in the second quarter of 2020, and the dividend capacity of our banking subsidiaries. Our double leverage ratio was 116.6% at June 30, 2020 and 116.9% at Dec. 31, 2019, and within the range targeted by management.

Uses of funds

The Parent’s major uses of funds are repurchases of common stock, payment of dividends, principal and interest payments on its borrowings, acquisitions and additional investments in its subsidiaries.

In May 2020, a quarterly cash dividend of $0.31 per common share was paid to common shareholders. Our common stock dividend payout ratio was 31% for the second quarter of 2020.

In March 2020, we and the other members of the Financial Services Forum announced the temporary suspension of share repurchases until the end of the second quarter of 2020 to preserve capital and liquidity in order to further the objective of using capital and liquidity to support clients and customers. In the second quarter of 2020, we repurchased 61.2 thousand common shares from employees, primarily in connection with the employees’ payment of taxes upon the vesting of restricted stock, at an average price of $43.59 per common share for a total cost of $3 million.

In connection with the Federal Reserve’s release of the CCAR results in June 2020, BNY Mellon announced that it will not conduct open market common stock repurchases in the third quarter of 2020 and will resume the common stock repurchase program as early as possible, depending on factors such as prevailing market conditions, our outlook for the economic environment, the additional capital analysis required by the Federal Reserve, and whether the Federal Reserve keeps the limitations for the third quarter of 2020 in place for subsequent quarters. The Federal Reserve has announced that it will conduct additional analysis for all participating CCAR firms, including us, later this year and will not allow participating firms to make open market common

BNY Mellon 35

stock repurchases during the third quarter of 2020. See “Recent regulatory developments” for additional information related to the 2020 CCAR results.

Liquidity coverage ratio (“LCR”)

U.S. regulators have established an LCR that requires certain banking organizations, including BNY Mellon, to maintain a minimum amount of unencumbered high-quality liquid assets (“HQLA”) sufficient to withstand the net cash outflow under a hypothetical standardized acute liquidity stress scenario for a 30-day time horizon.

The following table presents BNY Mellon’s consolidated HQLA at June 30, 2020, and the average HQLA and average LCR for the second quarter of 2020.

Consolidated HQLA and LCR	June 30, 2020
(dollars in billions)
Securities (a)	$	125
Cash (b)	107
Total consolidated HQLA (c)	$	232
Total consolidated HQLA – average (c)	$	210
Average LCR	112		%

(a) Primarily includes securities of U.S. government-sponsored enterprises, U.S. Treasury, sovereign securities, U.S. agency and investment-grade corporate debt.

(b) Primarily includes cash on deposit with central banks.

(c) Consolidated HQLA presented before adjustments. After haircuts and the impact of trapped liquidity, consolidated HQLA totaled $167 billion at June 30, 2020 and averaged $156 billion for the second quarter of 2020.

BNY Mellon and each of our affected domestic bank subsidiaries were compliant with the U.S. LCR requirements of at least 100% throughout the second quarter of 2020.

Statement of cash flows

The following summarizes the activity reflected on the consolidated statement of cash flows. While this information may be helpful to highlight certain macro trends and business strategies, the cash flow analysis may not be as relevant when analyzing changes in our

net earnings and net assets. We believe that in addition to the traditional cash flow analysis, the discussion related to liquidity and dividends and asset/liability management herein may provide more useful context in evaluating our liquidity position and related activity.

Net cash provided by operating activities was $5.1 billion in the six months ended June 30, 2020, compared with net cash used for operating activities of $2.5 billion in the six months ended June 30, 2019. In the six months ended June 30, 2020, cash flows provided by operations primarily resulted from earnings and changes in accruals. In the six months ended June 30, 2019, cash flows used for operations primarily resulted from changes in accruals and trading activities, partially offset by earnings.

Net cash used for investing activities was $58.7 billion in the six months ended June 30, 2020, compared with $11.4 billion in the six months ended June 30, 2019. In the six months ended June 30, 2020, net cash used for investing activities primarily reflects net changes in securities, change in interest-bearing deposits with the Federal Reserve and other central banks and changes in federal funds sold and securities purchased under resale agreements. In the six months ended June 30, 2019, net cash used for investing activities primarily reflects changes in federal funds sold and securities purchased under resale agreements, partially offset by changes in loans.

Net cash provided by financing activities was $53.4 billion in the six months ended June 30, 2020, compared with $13.2 billion in the six months ended June 30, 2019. In the six months ended June 30, 2020, net cash provided by financing activity reflects changes in deposits and payables to customers and broker-dealers, partially offset by changes in commercial paper. In the six months ended June 30, 2019, net cash provided by financing activities primarily reflects changes in deposits and changes in commercial paper, partially offset by repayment of long-term debt, changes in federal funds purchased and securities sold under repurchase agreements and changes in other borrowed funds.

36 BNY Mellon

Capital

Capital data (dollars in millions, except per share amounts; common shares in thousands)	June 30, 2020			March 31, 2020			Dec. 31, 2019
Average common equity to average assets	9.3		%	9.8		%	10.7		%
At period end:
BNY Mellon shareholders’ equity to total assets ratio	9.9		%	8.8		%	10.9		%
BNY Mellon common shareholders’ equity to total assets ratio	8.9		%	8.0		%	9.9		%
Total BNY Mellon shareholders’ equity	$	43,697		$	41,145		$	41,483
Total BNY Mellon common shareholders’ equity	$	39,165		$	37,603		$	37,941
BNY Mellon tangible common shareholders’ equity – Non-GAAP (a)	$	20,650		$	19,068		$	19,216
Book value per common share	$	44.21		$	42.47		$	42.12
Tangible book value per common share – Non-GAAP (a)	$	23.31		$	21.53		$	21.33
Closing stock price per common share	$	38.65		$	33.68		$	50.33
Market capitalization	$	34,239		$	29,822		$	45,331
Common shares outstanding	885,862			885,443			900,683
Cash dividends per common share	$	0.31		$	0.31		$	0.31
Common dividend payout ratio	31		%	30		%	20		%
Common dividend yield	3.2		%	3.7		%	2.4		%

(a) See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page 45 for a reconciliation of GAAP to Non-GAAP.

The Bank of New York Mellon Corporation total shareholders’ equity increased to $43.7 billion at June 30, 2020 from $41.5 billion at Dec. 31, 2019. The increase primarily reflects earnings, the issuance of preferred stock and unrealized gain on securities available-for-sale, partially offset by common stock repurchases and dividend payments.

In May 2020, the Parent issued 1,000,000 depositary shares, each representing a 1/100th interest in a share of the Parent’s Series G Preferred Stock. The Series G Preferred Stock has an aggregate liquidation preference of $1 billion. The Parent will pay dividends on the Series G Preferred Stock, if declared by its board of directors on each March 20 and September 20, at an annual rate equal to 4.70% from the original issue date to but excluding, Sept. 20, 2025; and at a floating rate equal to the five-year treasury rate (as defined in the certificate of designation) on the date that is three business days prior to the reset date plus 4.358% for each reset period, from and including Sept. 20, 2025. The floating rate will initially reset on Sept. 20, 2025 and subsequently on each date falling on the fifth anniversary of the preceding reset date.

The unrealized gain (after-tax) on our available-for-sale securities portfolio, net of hedges, included in accumulated OCI was $1.2 billion at June 30, 2020, compared with $361 million at Dec. 31, 2019. The increase in the unrealized gain, net of tax, was primarily driven by lower market interest rates.

In the six months ended June 30, 2020, we repurchased 21.7 million common shares at an average price of $45.43 per common share for a total of $988 million under the current program prior to the temporary suspension of share repurchases in March 2020.

In connection with the Federal Reserve’s release of the CCAR results in June 2020, BNY Mellon announced that it will not conduct open market common stock repurchases in the third quarter of 2020 and will resume the common stock repurchase program as early as possible, depending on factors such as prevailing market conditions, our outlook for the economic environment, the additional capital analysis required by the Federal Reserve, and whether the Federal Reserve keeps the limitations for the third quarter of 2020 in place for subsequent quarters. The Federal Reserve has announced that it will conduct additional analysis for all participating CCAR firms, including us, later this year and will not allow participating firms to make open market common stock repurchases during the third quarter of 2020. For additional information, see “Recent Regulatory Developments.”

Capital adequacy

Regulators establish certain levels of capital for bank holding companies (“BHCs”) and banks, including BNY Mellon and our bank subsidiaries, in accordance with established quantitative measurements. For the

BNY Mellon 37

Parent to maintain its status as a financial holding company (“FHC”), our U.S. bank subsidiaries and BNY Mellon must, among other things, qualify as “well capitalized.” As of June 30, 2020 and Dec. 31, 2019, BNY Mellon and our U.S. bank subsidiaries were “well capitalized.”

Failure to satisfy regulatory standards, including “well capitalized” status or capital adequacy rules more generally, could result in limitations on our activities and adversely affect our financial condition. See the discussion of these matters in “Supervision and Regulation - Regulated Entities of BNY Mellon and Ancillary Regulatory Requirements” and “Risk Factors - Operational Risk - Failure to satisfy

regulatory standards, including “well capitalized” and “well managed” status or capital adequacy and liquidity rules more generally, could result in limitations on our activities and adversely affect our

business and financial condition,” both of which are in our 2019 Annual Report.

The U.S. banking agencies’ capital rules are based on the framework adopted by the Basel Committee on Banking Supervision (“BCBS”), as amended from time to time. For additional information on these capital requirements, see “Supervision and Regulation” in our 2019 Annual Report and “Recent regulatory developments” in this Form 10-Q.

The table below presents our consolidated and largest bank subsidiary regulatory capital ratios.

Consolidated and largest bank subsidiary regulatory capital ratios	June 30, 2020								March 31, 2020		Dec. 31, 2019
	Well capitalized			Minimum required			Capital ratios		Capital ratios		Capital ratios
						(a)
Consolidated regulatory capital ratios: (b)
Advanced Approaches:
CET1 ratio	N/A		(c)	8.5	%		12.6	%	11.4	%	11.5	%
Tier 1 capital ratio	6	%		10			15.4		13.5		13.7
Total capital ratio	10	%		12			16.3		14.3		14.4
Standardized Approach:
CET1 ratio	N/A		(c)	8.5	%		12.7	%	11.3	%	12.5	%
Tier 1 capital ratio	6	%		10			15.6		13.5		14.8
Total capital ratio	10	%		12			16.6		14.4		15.8
Tier 1 leverage ratio	N/A		(c)	4			6.2		6.0		6.6
SLR (d)(e)	N/A		(c)	5			8.2		5.6		6.1
The Bank of New York Mellon regulatory capital ratios: (b)
Advanced Approaches:
CET1 ratio	6.5	%		7	%		17.1	%	15.5	%	15.1	%
Tier 1 capital ratio	8			8.5			17.1		15.5		15.1
Total capital ratio	10			10.5			17.2		15.6		15.2
Tier 1 leverage ratio	5			4			6.7		6.7		6.9
SLR (d)	6			3			8.4		6.2		6.4

(a) Minimum requirements for June 30, 2020 include minimum thresholds plus currently applicable buffers.

(b) 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. The Tier 1 leverage ratio is based on Tier 1 capital and quarterly average total assets. The U.S. global systemically important banks (“G-SIB”) surcharge of 1.5% is subject to change. The countercyclical capital buffer is currently set to 0%.

(c) The Federal Reserve’s regulations do not establish well capitalized thresholds for these measures for BHCs.

(d) The SLR is based on Tier 1 capital and total leverage exposure, which includes certain off-balance sheet exposures. The SLR at June 30, 2020 reflects the exclusion of certain central bank placements from leverage exposure.

(e) The SLR at June 30, 2020 reflects the temporary exclusion of U.S. Treasury securities from the leverage exposure which increased our consolidated SLR by 40 basis points.

38 BNY Mellon

Our CET1 ratio determined under the Advanced Approaches was 12.6% at June 30, 2020 and 11.5% at Dec. 31, 2019. The increase primarily reflects capital generated through earnings and unrealized gains on assets available-for-sale, partially offset by capital deployed through common stock repurchased, prior to the temporary suspension of share repurchases in March 2020, and dividend payments.

Our operational loss risk model is informed by external losses, including fines and penalties levied against institutions in the financial services industry, particularly those that relate to businesses in which we operate, and as a result external losses have impacted and could in the future impact the amount of capital that we are required to hold.

Our capital ratios are necessarily subject to, among other things, anticipated compliance with all necessary enhancements to model calibration, approval by regulators of certain models used as part of RWA calculations, other refinements, further implementation guidance from regulators, market practices and standards and any changes BNY Mellon may make to its businesses. As a consequence of these factors, our capital ratios may materially change, and may be volatile over time and from period to period.

The following table presents our capital components and RWAs.

Capital components and risk-weighted assets	June 30, 2020			March 31, 2020			Dec. 31, 2019
(in millions)
CET1:
Common shareholders’ equity	$	39,165		$	37,603		$	37,941
Adjustments for:
Goodwill and intangible assets (a)	(18,515		)	(18,535		)	(18,725		)
Net pension fund assets	(270		)	(269		)	(272		)
Equity method investments	(297		)	(290		)	(311		)
Deferred tax assets	(48		)	(46		)	(46		)
Other	—			2			(47		)
Total CET1	20,035			18,465			18,540
Other Tier 1 capital:
Preferred stock	4,532			3,542			3,542
Other	(89		)	(74		)	(86		)
Total Tier 1 capital	$	24,478		$	21,933		$	21,996
Tier 2 capital:
Subordinated debt	$	1,248		$	1,248		$	1,248
Allowance for credit losses	463			314			216
Other	(6		)	(1		)	(11		)
Total Tier 2 capital – Standardized Approach	1,705			1,561			1,453
Excess of expected credit losses	217			101			—
Less: Allowance for credit losses	463			314			216
Total Tier 2 capital – Advanced Approaches	$	1,459		$	1,348		$	1,237
Total capital:
Standardized Approach	$	26,183		$	23,494		$	23,449
Advanced Approaches	$	25,937		$	23,281		$	23,233
Risk-weighted assets:
Standardized Approach	$	157,290		$	163,006		$	148,695
Advanced Approaches:
Credit Risk	$	95,647		$	97,093		$	95,490
Market Risk	2,793			3,630			4,020
Operational Risk	60,900			61,838			61,388
Total Advanced Approaches	$	159,340		$	162,561		$	160,898
Average assets for Tier 1 leverage ratio	$	394,394		$	366,058		$	334,869
Total leverage exposure for SLR	$	297,300		$	392,807		$	362,452

(a) Reduced by deferred tax liabilities associated with intangible assets and tax-deductible goodwill.

BNY Mellon 39

The table below presents the factors that impacted CET1 capital.

CET1 generation	2Q20
(in millions)
CET1 – Beginning of period	$	18,465
Net income applicable to common shareholders of The Bank of New York Mellon Corporation	901
Goodwill and intangible assets, net of related deferred tax liabilities	20
Gross CET1 generated	921
Capital deployed:
Common stock dividend payments	(278		)
Common stock repurchases	(3		)
Total capital deployed	(281		)
Other comprehensive income:
Foreign currency translation	115
Unrealized gain on assets available-for-sale	746
Defined benefit plans	19
Unrealized gain on cash flow hedges	4
Total other comprehensive income	884
Additional paid-in capital (a)	58
Other (deductions):
Embedded goodwill	(7		)
Net pension fund assets	(1		)
Deferred tax assets	(2		)
Other	(2		)
Total other deductions	(12		)
Net CET1 generated	1,570
CET1 – End of period	$	20,035

(a) Primarily related to stock awards, the exercise of stock options and stock issued for employee benefit plans.

The following table shows the impact on the consolidated capital ratios at June 30, 2020 of a $100 million increase or decrease in common equity, or a $1 billion increase or decrease in RWAs, quarterly average assets or total leverage exposure.

Sensitivity of consolidated capital ratios at June 30, 2020
	Increase or decrease of
(in basis points)	$100 million in common  equity		$1 billion in RWA, quarterly average assets or total leverage exposure
CET1:
Standardized Approach	6	bps	8	bps
Advanced Approaches	6		8
Tier 1 capital:
Standardized Approach	6		10
Advanced Approaches	6		10
Total capital:
Standardized Approach	6		11
Advanced Approaches	6		10
Tier 1 leverage	3		2
SLR	3		3

Capital ratios vary depending on the size of the balance sheet at period end and the levels and types of investments in assets. The balance sheet size fluctuates from period to period based on levels of customer and market activity. In general, when servicing clients are more actively trading securities, deposit balances and the balance sheet as a whole are higher. In addition, when markets experience significant volatility or stress, our balance sheet size may increase considerably as client deposit levels increase.

Effective April 1, 2020, custody banks, including BNY Mellon and The Bank of New York Mellon, are permitted to exclude certain central bank placements from leverage exposure used in the SLR calculation. Also, effective April 1, 2020 and lasting through March 31, 2021, BHCs are permitted to exclude U.S. Treasury securities from the leverage exposure used in the SLR calculation. This temporary exclusion increased our consolidated SLR by 40 basis points. See “Supervision and Regulation” in our 2019 Annual Report and “Recent regulatory developments” in our First Quarter 2020 Form 10-Q for additional information.

Stress capital buffer

In June 2020, the Federal Reserve notified BNY Mellon that its stress capital buffer (“SCB”) requirement will be 2.5%, equal to the regulatory minimum, effective as of Oct. 1, 2020. The SCB replaces the current 2.5% capital conservation buffer for Standardized Approach capital ratios.

The SCB final rule generally eliminates the requirement for prior approval of common stock repurchases in excess of the distributions in a firm’s capital plan, provided that such distributions do not cause a breach of the firm’s capital ratios, including the applicable capital buffer. In conjunction with the release of the 2020 CCAR results, the Federal Reserve has imposed restrictions on capital distributions for the third quarter of 2020. For more detail regarding these restrictions, see “Recent regulatory developments - CCAR 2020 results” in this Quarterly Report on Form 10-Q.

Total Loss-Absorbing Capacity (“TLAC”)

The final TLAC rule establishing external TLAC, external long-term debt (“LTD”) and related requirements for U.S. G-SIBs, including BNY

40 BNY Mellon

Mellon, at the top-tier holding company level became effective on Jan. 1, 2019. The following summarizes the minimum requirements for BNY Mellon’s external TLAC and external LTD ratios, plus currently applicable buffers.

	As a % of RWAs (a)	As a % of total leverage exposure
Eligible external TLAC ratios	Regulatory minimum of 18% plus a buffer (b) equal to the sum of 2.5%, the method 1 G-SIB surcharge (currently 1%), and the countercyclical capital buffer, if any	Regulatory minimum of 7.5% plus a buffer (c) equal to 2%
Eligible external LTD ratios	Regulatory minimum of 6% plus the greater of the method 1 or method 2 G-SIB surcharge (currently 1.5%)	4.5%

(a)    RWA is the greater of Standardized and Advanced Approaches.

(b)    Buffer to be met using only CET1.

(c) Buffer to be met using only Tier 1 capital.

External TLAC consists of the Parent’s Tier 1 capital and eligible unsecured LTD issued by it that has a remaining term to maturity of at least one year and satisfies certain other conditions. Eligible LTD consists of the unpaid principal balance of eligible unsecured debt securities, subject to haircuts for amounts due to be paid within two years, that satisfy certain other conditions. Debt issued prior to Dec. 31, 2016 has been permanently grandfathered to the extent these instruments otherwise would be ineligible only due to containing impermissible acceleration rights or being governed by foreign law.

The following table presents our external TLAC and external LTD ratios.

TLAC and LTD ratios	June 30, 2020
	Minimum required		Minimum ratios with buffers
					Ratios
Eligible external TLAC:
As a percentage of RWA	18.0	%	21.5	%	28.7	%
As a percentage of total leverage exposure	7.5	%	9.5	%	15.4	%
Eligible external LTD:
As a percentage of RWA	7.5	%	N/A		12.5	%
As a percentage of total leverage exposure	4.5	%	N/A		6.7	%

If BNY Mellon maintains risk-based ratio or leverage TLAC measures above the minimum required level, but with a risk-based ratio or leverage below the minimum level with buffers, we will face constraints on dividends, equity repurchases and discretionary executive compensation based on the amount of the shortfall and eligible retained income.

Trading activities and risk management

Our trading activities are focused on acting as a market-maker for our customers, facilitating customer trades and risk mitigating hedging in compliance with the Volcker Rule. The risk from market-making activities for customers is managed by our traders and limited in total exposure through a system of position limits, value-at-risk (“VaR”) methodology and other market sensitivity measures. VaR is the potential loss in value due to adverse market movements over a defined time horizon with a specified confidence level. The calculation of our VaR used by management and presented below assumes a one-day holding period, utilizes a 99% confidence level and incorporates non-linear product characteristics. VaR facilitates comparisons across portfolios of different risk characteristics. VaR also captures the diversification of aggregated risk at the firm-wide level.

VaR represents a key risk management measure and it is important to note the inherent limitations to VaR, which include:

• VaR does not estimate potential losses over longer time horizons where moves may be extreme;

• VaR does not take account of potential variability of market liquidity; and

• Previous moves in market risk factors may not produce accurate predictions of all future market moves.

See Note 17 of the Notes to Consolidated Financial Statements for additional information on the VaR methodology.

The following tables indicate the calculated VaR amounts for the trading portfolio for the designated periods using the historical simulation VaR model.

BNY Mellon 41

VaR (a)	2Q20							June 30, 2020
(in millions)	Average			Minimum		Maximum
Interest rate	$	3.0		$	2.1	$	4.9	$	2.2
Foreign exchange	3.4			2.2		5.9		2.4
Equity	0.5			0.4		1.4		0.4
Credit	3.5			1.8		10.2		2.8
Diversification	(5.7		)	N/M		N/M		(4.0		)
Overall portfolio	4.7			3.1		11.4		3.8

VaR (a)	1Q20							March 31, 2020
(in millions)	Average			Minimum		Maximum
Interest rate	$	4.9		$	3.2	$	11.3	$	5.1
Foreign exchange	3.1			1.7		6.3		4.5
Equity	1.4			0.8		2.3		0.9
Credit	3.4			1.2		12.1		9.8
Diversification	(6.4		)	N/M		N/M		(9.9		)
Overall portfolio	6.4			3.5		14.3		10.4

VaR (a)	2Q19							June 30, 2019
(in millions)	Average			Minimum		Maximum
Interest rate	$	4.2		$	3.3	$	5.2	$	3.8
Foreign exchange	2.7			1.9		4.2		2.3
Equity	0.8			0.6		0.9		0.7
Credit	0.8			0.5		1.2		0.9
Diversification	(3.2		)	N/M		N/M		(3.2		)
Overall portfolio	5.3			4.0		6.9		4.5

VaR (a)	YTD20
(in millions)	Average			Minimum		Maximum
Interest rate	$	4.0		$	2.1	$	11.3
Foreign exchange	3.2			1.7		6.3
Equity	0.9			0.4		2.3
Credit	3.5			1.2		12.1
Diversification	(6.1		)	N/M		N/M
Overall portfolio	5.5			3.1		14.3

VaR (a)	YTD19
(in millions)	Average			Minimum		Maximum
Interest rate	$	4.1		$	3.2	$	5.3
Foreign exchange	3.3			1.9		6.4
Equity	0.7			0.6		1.1
Credit	0.7			0.4		1.2
Diversification	(3.1		)	N/M		N/M
Overall portfolio	5.7			4.0		9.5

(a) VaR exposure does not include the impact of the Company’s consolidated investment management funds and seed capital investments.

N/M - Because the minimum and maximum may occur on different days for different risk components, it is not meaningful to compute a minimum and maximum portfolio diversification effect.

The decrease in VaR at June 30, 2020 compared with March 31, 2020 reflects lower market volatility in the second quarter of 2020.

The interest rate component of VaR represents instruments whose values are predominantly driven by U.S. Treasury securities interest rate levels. These instruments include, but are not limited to, U.S. Treasury securities, swaps, swaptions, forward rate agreements, exchange-traded futures and options, and other interest rate derivative products.

The foreign exchange component of VaR represents instruments whose values predominantly vary with the level or volatility of currency exchange rates or interest rates. These instruments include, but are not limited to, currency balances, spot and forward transactions, currency options and other currency derivative products.

The equity component of VaR consists of instruments that represent an ownership interest in the form of domestic and foreign common stock or other equity-linked instruments. These instruments include, but are not limited to, common stock, exchange-traded funds, preferred stock, listed equity options (puts and calls), OTC equity options, equity total return swaps, equity index futures and other equity derivative products.

The credit component of VaR represents instruments whose values are predominantly driven by credit spread levels, i.e., idiosyncratic default risk. These instruments include, but are not limited to, securities with exposures from corporate and municipal credit spreads.

The diversification component of VaR is the risk reduction benefit that occurs when combining portfolios and offsetting positions, and from the correlated behavior of risk factor movements.

During the second quarter of 2020, interest rate risk generated 29% of average gross VaR, foreign exchange risk generated 33% of average gross VaR, equity risk generated 5% of average gross VaR and credit risk generated 33% of average gross VaR. During the second quarter of 2020, our daily trading loss did not exceed our calculated VaR amount of the overall portfolio.

42 BNY Mellon

The following table of total daily trading revenue or loss illustrates the number of trading days in which our trading revenue or loss fell within particular ranges during the past five quarters.

Distribution of trading revenue (loss) (a)
	Quarter ended
(dollars in millions)	June 30, 2020	March 31, 2020	Dec. 31, 2019	Sept. 30, 2019	June 30, 2019
Revenue range:	Number of days
Less than $(2.5)	6	—	3	2	—
$(2.5) – $0	12	3	5	7	4
$0 – $2.5	17	19	23	26	30
$2.5 – $5.0	15	19	24	22	23
More than $5.0	14	21	7	7	7

(a) Trading revenue (loss) includes realized and unrealized gains and losses primarily related to spot and forward foreign exchange transactions, derivatives and securities trades for our customers and excludes any associated commissions, underwriting fees and net interest revenue.

The number of days when revenue was generated decreased compared with the first quarter of 2020 driven by lower volumes and volatility in the second quarter of 2020.

Trading assets include debt and equity instruments and derivative assets, primarily interest rate and foreign exchange contracts, not designated as hedging instruments. Trading assets were $14.2 billion at June 30, 2020 and $13.6 billion at Dec. 31, 2019.

Trading liabilities include debt and equity instruments and derivative liabilities, primarily interest rate and foreign exchange contracts, not designated as hedging instruments. Trading liabilities were $5.6 billion at June 30, 2020 and $4.8 billion at Dec. 31, 2019.

Under our fair value methodology for derivative contracts, an initial “risk-neutral” valuation is performed on each position assuming time-discounting based on a AA credit curve. In addition, we consider credit risk in arriving at the fair value of our derivatives.

We reflect external credit ratings as well as observable credit default swap spreads for both ourselves and our counterparties when measuring the fair value of our derivative positions. Accordingly, the valuation of our derivative positions is sensitive to the current changes in our own credit spreads, as well as those of our counterparties.

At June 30, 2020, our OTC derivative assets, including those in hedging relationships, of $4.3 billion included a credit valuation adjustment (“CVA”) deduction of $41 million. Our OTC derivative liabilities, including those in hedging relationships, of $3.9 billion included a debit valuation adjustment (“DVA”) of $1 million related to our own credit spread. Net of hedges, the CVA increased by $2 million and the DVA increased by less than $1 million in the second quarter of 2020, which decreased foreign exchange and other trading revenue by $2 million. The net impact increased foreign exchange and other trading revenue by $4 million in the first quarter of 2020 and $1 million in the second quarter of 2019.

The table below summarizes the distribution of credit ratings for our foreign exchange and interest rate derivative counterparties over the past five quarters, which indicates the level of counterparty credit associated with these trading activities. Significant changes in counterparty credit ratings could alter the level of credit risk faced by BNY Mellon.

Foreign exchange and other trading counterparty risk rating profile (a)
	Quarter ended
	June 30, 2020		March 31, 2020		Dec. 31, 2019		Sept. 30, 2019		June 30, 2019
Rating:
AAA to AA-	56	%	56	%	54	%	55	%	54	%
A+ to A-	18		24		24		24		26
BBB+ to BBB-	18		14		17		16		17
BB+ and lower (b)	8		6		5		5		3
Total	100	%	100	%	100	%	100	%	100	%

(a) Represents credit rating agency equivalent of internal credit ratings.

(b) Non-investment grade.

BNY Mellon 43

Asset/liability management

Our diversified business activities include processing securities, accepting deposits, investing in securities, lending, raising money as needed to fund assets and other transactions. The market risks from these activities include interest rate risk and foreign exchange risk. Our primary market risk is exposure to movements in U.S. dollar interest rates and certain foreign currency interest rates. We actively manage interest rate sensitivity and use earnings simulation and discounted cash flow models to identify interest rate exposures.

An earnings simulation model is the primary tool used to assess changes in pre-tax net interest revenue. The model incorporates management’s assumptions regarding interest rates, market spreads, changes in the prepayment behavior of loans and securities and the impact of derivative financial instruments used for interest rate risk management purposes. These assumptions have been developed through a combination of historical analysis and future expected pricing behavior and are inherently uncertain. Actual results may differ materially from projected results due to timing, magnitude and frequency of interest rate changes, and changes in market conditions and management’s strategies, among other factors.

In the table below, we use the earnings simulation model to run various interest rate ramp scenarios from a baseline scenario. The interest rate ramp scenarios examine the impact of large interest rate movements. In each scenario, all currencies’ interest rates are shifted higher or lower. Typically, the baseline scenario uses the average deposit balances of the last month of the quarter. However, during the month of March we experienced a significant increase in deposits and a corresponding increase in central bank placements. To normalize the analysis, we used the first quarter average for these balances. The 100 basis point ramp scenario assumes rates change 25 basis points above or below the yield curve in each of the next four quarters and the 200 basis point ramp scenario assumes a 50 basis point per quarter change. Interest rate sensitivity is quantified by calculating the change in pre-tax net interest revenue between the scenarios over a 12-month measurement period. The net interest revenue sensitivity methodology assumes static deposit levels and also assumes that no management actions will be taken to mitigate the effects of interest rate changes.

The following table shows net interest revenue sensitivity for BNY Mellon.

Estimated changes in net interest revenue (in millions)	June 30, 2020			March 31, 2020			June 30, 2019
Up 200 bps parallel rate ramp vs. baseline (a)	$	591		$	557		$	380
Up 100 bps parallel rate ramp vs. baseline (a)	349			334			200
Down 100 bps parallel rate ramp vs. baseline (a)	315			100			(179		)
Long-term up 50 bps, short-term unchanged (b)	153			166			171
Long-term down 50 bps, short-term unchanged (b)	(173		)	(158		)	(192		)

(a) In the parallel rate ramp, both short-term and long-term rates move in four equal quarterly increments.

(b) Long-term is equal to or greater than one year.

The down 100 basis point scenario was impacted by a change in our deposit assumptions. Specifically, we increased the amount of deposit balances to which we would pass through negative central bank rates in the scenario.

To illustrate the net interest revenue sensitivity to deposit runoff, we note that a $5 billion instantaneous reduction of U.S. dollar denominated noninterest-bearing deposits would reduce the net interest revenue sensitivity results in the ramp up 100 basis point and 200 basis point scenarios in the table above by approximately $35 million and approximately $65 million, respectively. The impact would be smaller if the runoff was assumed to be a mixture of interest-bearing and noninterest-bearing deposits.

For a discussion of factors impacting the growth or contraction of deposits, see “Risk Factors - Our business, financial condition and results of operations could be adversely affected if we do not effectively manage our liquidity,” in our 2019 Annual Report.

Off-balance sheet arrangements

Off-balance sheet arrangements discussed in this section are limited to certain guarantees, retained or contingent interests and obligations arising out of unconsolidated variable interest entities (“VIEs”). Guarantees include SBLCs issued as part of our corporate banking business and securities lending indemnifications issued as part of our Investment Services business. See Note 18 of the Notes to Consolidated Financial Statements for a further discussion of our off-balance sheet arrangements.

44 BNY Mellon

Supplemental information - Explanation of GAAP and Non-GAAP financial measures

BNY Mellon has included in this Form 10-Q certain Non-GAAP financial measures on a tangible basis as a supplement to generally accepted accounting principles (“GAAP”) information, which exclude goodwill and intangible assets, net of deferred tax liabilities. We believe that the return on tangible common equity is additional useful information for investors because it presents a measure of those assets that can generate income, and the tangible book value per common share is additional useful information because it presents the level of tangible assets in relation to shares of common stock outstanding.

The presentation of the growth rates of investment management and performance fees on a constant currency basis permits investors to assess the significance of changes in foreign currency exchange

rates. Growth rates on a constant currency basis were determined by applying the current period foreign currency exchange rates to the prior period revenue. We believe that this presentation, as a supplement to GAAP information, gives investors a clearer picture of the related revenue results without the variability caused by fluctuations in foreign currency exchange rates.

BNY Mellon has also included the adjusted pre-tax operating margin – Non-GAAP, which is the pre-tax operating margin for the Investment and Wealth Management business net of distribution and servicing expense that was passed to third parties who distribute or service our managed funds. We believe that this measure is useful when evaluating the performance of the Investment and Wealth Management business relative to industry competitors.

The following table presents the reconciliation of the return on common equity and tangible common equity.

Return on common equity and tangible common equity reconciliation	2Q20			1Q20			2Q19			YTD20			YTD19
(dollars in millions)
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP	$	901		$	944		$	969		$	1,845		$	1,879
Add:  Amortization of intangible assets	26			26			30			52			59
Less: Tax impact of amortization of intangible assets	6			6			7			12			14
Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets – Non-GAAP	$	921		$	964		$	992		$	1,885		$	1,924
Average common shareholders’ equity	$	38,476		$	37,664		$	37,487		$	38,070		$	37,287
Less: Average goodwill	17,243			17,311			17,343			17,277			17,360
Average intangible assets	3,058			3,089			3,178			3,073			3,193
Add: Deferred tax liability – tax deductible goodwill (a)	1,119			1,109			1,094			1,119			1,094
Deferred tax liability – intangible assets (a)	664			666			687			664			687
Average tangible common shareholders’ equity – Non-GAAP	$	19,958		$	19,039		$	18,747		$	19,503		$	18,515
Return on common shareholders’ equity – GAAP	9.4		%	10.1		%	10.4		%	9.7		%	10.2		%
Return on tangible common shareholders’ equity – Non-GAAP	18.5		%	20.4		%	21.2		%	19.4		%	20.9		%

(a) Deferred tax liabilities are based on fully phased-in U.S. capital rules.

BNY Mellon 45

The following table presents the reconciliation of book value and tangible book value per common share.

Book value and tangible book value per common share reconciliation	June 30, 2020		March 31, 2020		Dec. 31, 2019		June 30, 2019
(dollars in millions, except per share amounts and unless otherwise noted)
BNY Mellon shareholders’ equity at period end – GAAP	$	43,697	$	41,145	$	41,483	$	41,533
Less: Preferred stock	4,532		3,542		3,542		3,542
BNY Mellon common shareholders’ equity at period end – GAAP	39,165		37,603		37,941		37,991
Less: Goodwill	17,253		17,240		17,386		17,337
Intangible assets	3,045		3,070		3,107		3,160
Add: Deferred tax liability – tax deductible goodwill (a)	1,119		1,109		1,098		1,094
Deferred tax liability – intangible assets (a)	664		666		670		687
BNY Mellon tangible common shareholders’ equity at period end – Non-GAAP	$	20,650	$	19,068	$	19,216	$	19,275
Period-end common shares outstanding (in thousands)	885,862		885,443		900,683		942,662
Book value per common share – GAAP	$	44.21	$	42.47	$	42.12	$	40.30
Tangible book value per common share – Non-GAAP	$	23.31	$	21.53	$	21.33	$	20.45

(a) Deferred tax liabilities are based on fully phased-in U.S. capital rules.

The following table presents the impact of changes in foreign currency exchange rates on our consolidated investment management and performance fees.

Constant currency reconciliation – Consolidated	2Q20		2Q19			2Q20 vs.
(dollars in millions)						2Q19
Investment management and performance fees – GAAP	$	786	$	833		(6	)%
Impact of changes in foreign currency exchange rates	—		(9		)
Adjusted investment management and performance fees – Non-GAAP	$	786	$	824		(5	)%

The following table presents the impact of changes in foreign currency exchange rates on investment management and performance fees reported in the Investment and Wealth Management business.

Constant currency reconciliation – Investment and Wealth Management business						2Q20 vs.
(dollars in millions)	2Q20		2Q19			2Q19
Investment management and performance fees – GAAP	$	787	$	833		(6	)%
Impact of changes in foreign currency exchange rates	—		(9		)
Adjusted investment management and performance fees – Non-GAAP	$	787	$	824		(4	)%

The following table presents the reconciliation of the pre-tax operating margin for the Investment and Wealth Management business.

Pre-tax operating margin reconciliation – Investment and Wealth Management business
(dollars in millions)	2Q20			1Q20			4Q19			3Q19			2Q19			YTD20			YTD19
Income before income taxes – GAAP	$	221		$	194		$	240		$	295		$	260		$	415		$	526
Total revenue – GAAP	$	886		$	898		$	971		$	887		$	913		$	1,784		$	1,849
Less:  Distribution and servicing expense	86			91			93			98			94			177			185
Adjusted total revenue, net of distribution and servicing expense – Non-GAAP	$	800		$	807		$	878		$	789		$	819		$	1,607		$	1,664
Pre-tax operating margin – GAAP (a)	25		%	22		%	25		%	33		%	29		%	23		%	28		%
Adjusted pre-tax operating margin, net of distribution and servicing expense – Non-GAAP (a)	28		%	24		%	27		%	37		%	32		%	26		%	32		%

(a) Income before taxes divided by total revenue.

46 BNY Mellon

Recent accounting and regulatory developments

Recent accounting developments

The following ASU issued by the FASB had not yet been adopted as of June 30, 2020.

ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting

In March 2020, the FASB issued an ASU, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides temporary optional expedients and exceptions for applying U.S. GAAP to financial contracts, hedging relationships and other transactions affected by reference rate reform. This ASU also permits an entity to make a one-time election to sell and/or transfer held-to-maturity securities that are affected by reference rate reform and were classified as held-to-maturity on or before Jan. 1, 2020. The guidance in this ASU can be adopted as of March 12, 2020 through Dec. 31, 2022. We are assessing the impacts of the new standard, but would not expect this ASU to have a material impact on BNY Mellon.

Recent regulatory developments

For a summary of additional regulatory matters relevant to our operations, see “Recent regulatory developments” in our Form 10-Q for the quarter ended March 31, 2020 and “Supervision and Regulation” in our 2019 Annual Report. The following discussions summarize certain regulatory, legislative and other developments that may affect BNY Mellon, the impact of many of which we are still evaluating.

CCAR 2020 results

On June 25, 2020, the Federal Reserve released the results of its stress tests for 2020 and additional sensitivity analyses that the Federal Reserve conducted in light of the coronavirus pandemic. The Federal Reserve also notified BNY Mellon that its SCB requirement will be 2.5%, which equals the regulatory floor. The SCB will be effective on Oct. 1, 2020. For additional information regarding the SCB, see “Recent regulatory developments - Changes to CCAR and Stress Capital Buffer” in our First Quarter

2020 Form 10-Q and “Supervision and Regulation - Capital Planning and Stress Testing” in our 2019 Annual Report.

In light of the changes in the financial markets and the economy, the Federal Reserve announced that all banking institutions subject to CCAR, including BNY Mellon, will be required to resubmit their capital plans. In connection with the capital plan resubmission, the Federal Reserve may recalculate CCAR firms’ SCBs (including BNY Mellon’s). For the third quarter of 2020, all CCAR firms, including BNY Mellon, will only be permitted to repurchase stock in connection with employee benefit plans, pay common stock dividends that do not exceed an amount equal to the average of the firm’s net income for the four preceding calendar quarters provided that the amount of the common stock dividend is not increased, and pay scheduled dividends on additional Tier 1 and Tier 2 capital instruments. The Federal Reserve has stated that it may extend these limitations quarter-by-quarter. Consistent with these limitations, for the third quarter, BNY Mellon plans to maintain its quarterly common stock dividend of $0.31 per share and to suspend its open market common stock repurchases. 

Volcker Covered Funds Regulations Revision

On June 25, 2020, the Federal Reserve, OCC, FDIC, Securities and Exchange Commission (“SEC”) and Commodity Futures Trading Commission (“CFTC”) finalized a second major set of amendments to the implementing regulations for the provisions of the Dodd-Frank Act commonly referred to as the “Volcker Rule”. This set of amendments, which follows revisions to the proprietary trading provisions of the Volcker Rule in 2019, contains a number of targeted amendments to the Volcker Rule regulations, principally focused on the restrictions on banking entities’ investments in, sponsorship of, and other relationships with covered funds. BNY Mellon’s preliminary assessment is that the changes are favorable and reduce certain compliance burdens; however, the general prohibitions and requirements with respect to investment in, sponsoring of and transactions with covered funds would remain in place.

The provision that may have the most targeted benefits to BNY Mellon concerns transactions with covered funds which we sponsor or advise. The amendments exempt certain transactions from the

BNY Mellon 47

currently applicable prohibitions, including intraday credit extensions and certain payment, clearing and settlement transactions, subject to certain conditions. Additionally, the amendments narrow the definition of “ownership interest,” which may reduce the compliance burden on BNY Mellon investments. The amendments will become effective on Oct. 1, 2020.

CRR “Quick Fix”

On June 27, 2020, a so-called “quick fix” to the Capital Requirements Regulation (“CRR Quick Fix”) became applicable. Among other things, the CRR Quick Fix enables EU credit institutions, such as The Bank of New York Mellon SA/NV, to exclude central bank deposits from leverage ratio calculations under certain conditions, including a declaration of “exceptional circumstances” from the credit institution’s competent authority. The leverage ratio will become a binding requirement in the EU, as part of the Capital Requirements Regulation 2, on June 28, 2021. The extent to which the UK implements the leverage ratio exclusion of the CRR Quick Fix depends on its policy stance after the end of the transition period under the EU withdrawal agreement.

Website information

Our website is www.bnymellon.com. We currently make available the following information under the Investor Relations portion of our website. With respect to filings with the SEC, we post such information as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the SEC.

• All of our SEC filings, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to these reports, as well as proxy statements and SEC Forms 3, 4 and 5;

• Financial statements and footnotes prepared using eXtensible Business Reporting Language (“XBRL”);

• Our earnings materials and selected management conference calls and presentations;

• Other regulatory disclosures, including: Pillar 3 Disclosures (and Market Risk Disclosure contained therein); Liquidity Coverage Ratio Disclosures; Federal Financial Institutions Examination Council - Consolidated Reports of Condition and Income for a Bank With Domestic and Foreign Offices; Consolidated Financial Statements for Bank Holding Companies; and the Dodd-Frank Act Stress Test Results for BNY Mellon and The Bank of New York Mellon; and

• Our Corporate Governance Guidelines, Amended and Restated By-laws, Directors’ Code of Conduct and the Charters of the Audit, Finance, Corporate Governance, Nominating and Social Responsibility, Human Resources and Compensation, Risk and Technology Committees of our Board of Directors.

We may use our website, our Twitter account (@BNYMellon) and other social media channels as additional means of disclosing information to the public. The information disclosed through those channels may be considered to be material. The contents of our website or social media channels referenced herein are not incorporated by reference into this Quarterly Report on Form 10-Q.

48 BNY Mellon

Item 1. Financial Statements

The Bank of New York Mellon Corporation (and its subsidiaries)

Consolidated Income Statement (unaudited)

	Quarter ended									Year-to-date
(in millions)	June 30, 2020			March 31, 2020			June 30, 2019			June 30, 2020			June 30, 2019
Fee and other revenue
Investment services fees:
Asset servicing fees	$	1,173		$	1,159		$	1,141		$	2,332		$	2,263
Clearing services fees	431			470			410			901			808
Issuer services fees	277			263			291			540			542
Treasury services fees	144			149			140			293			272
Total investment services fees	2,025			2,041			1,982			4,066			3,885
Investment management and performance fees	786			862			833			1,648			1,674
Foreign exchange and other trading revenue	166			319			166			485			336
Financing-related fees	58			59			50			117			101
Distribution and servicing	27			31			31			58			62
Investment and other income	105			11			43			116			78
Total fee revenue	3,167			3,323			3,105			6,490			6,136
Net securities gains	9			9			7			18			8
Total fee and other revenue	3,176			3,332			3,112			6,508			6,144
Operations of consolidated investment management funds
Investment income (loss)	54			(38		)	10			16			36
Interest of investment management fund note holders	—			—			—			—			—
Income (loss) from consolidated investment management funds	54			(38		)	10			16			36
Net interest revenue
Interest revenue	943			1,570			1,965			2,513			3,885
Interest expense	163			756			1,163			919			2,242
Net interest revenue	780			814			802			1,594			1,643
Total revenue	4,010			4,108			3,924			8,118			7,823
Provision for credit losses	143			169			(8		)	312			(1		)
Noninterest expense
Staff	1,464			1,482			1,421			2,946			2,945
Software and equipment	345			326			304			671			587
Professional, legal and other purchased services	337			330			337			667			662
Net occupancy	137			135			138			272			275
Sub-custodian and clearing	120			105			115			225			220
Distribution and servicing	85			91			94			176			185
Bank assessment charges	35			35			31			70			62
Business development	20			42			56			62			101
Amortization of intangible assets	26			26			30			52			59
Other	117			140			121			257			250
Total noninterest expense	2,686			2,712			2,647			5,398			5,346
Income
Income before income taxes	1,181			1,227			1,285			2,408			2,478
Provision for income taxes	216			265			264			481			501
Net income	965			962			1,021			1,927			1,977
Net (income) loss attributable to noncontrolling interests related to consolidated investment management funds	(15		)	18			(4		)	3			(14		)
Net income applicable to shareholders of The Bank of New York Mellon Corporation	950			980			1,017			1,930			1,963
Preferred stock dividends	(49		)	(36		)	(48		)	(85		)	(84		)
Net income applicable to common shareholders of The Bank of New York Mellon Corporation	$	901		$	944		$	969		$	1,845		$	1,879

BNY Mellon 49

The Bank of New York Mellon Corporation (and its subsidiaries)

Consolidated Income Statement (unaudited) (continued) 

Net income applicable to common shareholders of The Bank of New York Mellon Corporation used for the earnings per share calculation	Quarter ended						Year-to-date
(in millions)	June 30, 2020		March 31, 2020		June 30, 2019		June 30, 2020		June 30, 2019
Net income applicable to common shareholders of The Bank of New York Mellon Corporation	$	901	$	944	$	969	$	1,845	$	1,879
Less: Earnings allocated to participating securities	1		3		4		4		9
Net income applicable to common shareholders of The Bank of New York Mellon Corporation after required adjustment for the calculation of basic and diluted earnings per common share	$	900	$	941	$	965	$	1,841	$	1,870

Average common shares and equivalents outstanding of The Bank of New York Mellon Corporation	Quarter ended						Year-to-date
(in thousands)	June 30, 2020		March 31, 2020		June 30, 2019		June 30, 2020		June 30, 2019
Basic	889,020		894,122		951,281		891,642		956,887
Common stock equivalents	2,044		3,941		3,891		2,866		4,894
Less: Participating securities	(503	)	(1,374	)	(1,244	)	(905	)	(1,824	)
Diluted	890,561		896,689		953,928		893,603		959,957
Anti-dilutive securities (a)	1,578		2,584		3,999		2,052		4,704

(a) Represents stock options, restricted stock, restricted stock units and participating securities outstanding but not included in the computation of diluted average common shares because their effect would be anti-dilutive.

Earnings per share applicable to common shareholders of The Bank of New York Mellon Corporation	Quarter ended						Year-to-date
(in dollars)	June 30, 2020		March 31, 2020		June 30, 2019		June 30, 2020		June 30, 2019
Basic	$	1.01	$	1.05	$	1.01	$	2.06	$	1.95
Diluted	$	1.01	$	1.05	$	1.01	$	2.06	$	1.95

See accompanying unaudited Notes to Consolidated Financial Statements.

50 BNY Mellon

The Bank of New York Mellon Corporation (and its subsidiaries)

Consolidated Comprehensive Income Statement (unaudited)

	Quarter ended									Year-to-date
(in millions)	June 30, 2020			March 31, 2020			June 30, 2019			June 30, 2020			June 30, 2019
Net income	$	965		$	962		$	1,021		$	1,927		$	1,977
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	115			(369		)	10			(254		)	39
Unrealized gain on assets available-for-sale:
Unrealized gain arising during the period	753			183			287			936			526
Reclassification adjustment	(7		)	(7		)	(5		)	(14		)	(6		)
Total unrealized gain on assets available-for-sale	746			176			282			922			520
Defined benefit plans:
Net (loss) arising during the period	—			—			—			—			(9		)
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost	19			18			10			37			20
Total defined benefit plans	19			18			10			37			11
Net unrealized gain (loss) on cash flow hedges	4			(11		)	—			(7		)	5
Total other comprehensive income (loss), net of tax (a)	884			(186		)	302			698			575
Total comprehensive income	1,849			776			1,323			2,625			2,552
Net (income) loss attributable to noncontrolling interests	(15		)	18			(4		)	3			(14		)
Other comprehensive loss (income) attributable to noncontrolling interests	—			2			—			2			(2		)
Comprehensive income applicable to shareholders of The Bank of New York Mellon Corporation	$	1,834		$	796		$	1,319		$	2,630		$	2,536

(a) Other comprehensive income (loss) attributable to The Bank of New York Mellon Corporation shareholders was $884 million for the quarter ended June 30, 2020, $(184) million for the quarter ended March 31, 2020, $302 million for the quarter ended June 30, 2019, $700 million for the six months ended June 30, 2020 and $573 million for the six months ended June 30, 2019.

See accompanying unaudited Notes to Consolidated Financial Statements.

BNY Mellon 51

The Bank of New York Mellon Corporation (and its subsidiaries)

Consolidated Balance Sheet (unaudited)

	June 30, 2020			Dec. 31, 2019
(dollars in millions, except per share amounts)
Assets
Cash and due from banks (including allowance for credit losses of $4 at June 30, 2020) (a)	$	4,776		$	4,830
Interest-bearing deposits with the Federal Reserve and other central banks	112,728			95,042
Interest-bearing deposits with banks (including allowance for credit losses of $1 at June 30, 2020; $2,210 and $2,437 is restricted) (a)	18,045			14,811
Federal funds sold and securities purchased under resale agreements (including allowance for credit losses of $- at June 30, 2020) (a)	36,638			30,182
Securities:
Held-to-maturity (including allowance for credit losses of less than $1 at June 30, 2020; fair value of $45,983 and $34,805) (a)	44,615			34,483
Available-for-sale (including allowance for credit losses of $12 at June 30, 2020; amortized cost of $106,668 and $87,435) (a)	110,067			88,550
Total securities	154,682			123,033
Trading assets	14,150			13,571
Loans	55,397			54,953
Allowance for credit losses (a)	(302		)	(122		)
Net loans	55,095			54,831
Premises and equipment	3,598			3,625
Accrued interest receivable	540			624
Goodwill	17,253			17,386
Intangible assets	3,045			3,107
Other assets (including allowance for credit losses on accounts receivable of $4 at June 30, 2020, also includes $529 and $419, at fair value) (a)	21,306			20,221
Subtotal assets of operations	441,856			381,263
Assets of consolidated investment management funds, at fair value	460			245
Total assets	$	442,316		$	381,508
Liabilities
Deposits:
Noninterest-bearing (principally U.S. offices)	$	78,100		$	57,630
Interest-bearing deposits in U.S. offices	121,242			101,542
Interest-bearing deposits in non-U.S. offices	106,128			100,294
Total deposits	305,470			259,466
Federal funds purchased and securities sold under repurchase agreements	14,512			11,401
Trading liabilities	5,595			4,841
Payables to customers and broker-dealers	25,012			18,758
Commercial paper	665			3,959
Other borrowed funds	1,628			599
Accrued taxes and other expenses	5,029			5,642
Other liabilities (including allowance for credit losses on lending-related commitments of $152 and $94, also includes $964 and $607, at fair value) (a)	12,869			7,612
Long-term debt (includes $399 and $387, at fair value)	27,566			27,501
Subtotal liabilities of operations	398,346			339,779
Liabilities of consolidated investment management funds, at fair value	4			1
Total liabilities	398,350			339,780
Temporary equity
Redeemable noncontrolling interests	157			143
Permanent equity
Preferred stock – par value $0.01 per share; authorized 100,000,000 shares; issued 45,826 and 35,826 shares	4,532			3,542
Common stock – par value $0.01 per share; authorized 3,500,000,000 shares; issued 1,381,361,699 and 1,374,443,376 shares	14			14
Additional paid-in capital	27,702			27,515
Retained earnings	33,224			31,894
Accumulated other comprehensive loss, net of tax	(1,943		)	(2,638		)
Less: Treasury stock of 495,499,985 and 473,760,338 common shares, at cost	(19,832		)	(18,844		)
Total The Bank of New York Mellon Corporation shareholders’ equity	43,697			41,483
Nonredeemable noncontrolling interests of consolidated investment management funds	112			102
Total permanent equity	43,809			41,585
Total liabilities, temporary equity and permanent equity	$	442,316		$	381,508

(a) In the first quarter of 2020, we adopted new accounting guidance included in ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, on a prospective basis. See Note 2 of the Notes to Consolidated Financial Statements for additional information.

See accompanying unaudited Notes to Consolidated Financial Statements.

52 BNY Mellon

The Bank of New York Mellon Corporation (and its subsidiaries)

Consolidated Statement of Cash Flows (unaudited)

	Six months ended June 30,
(in millions)	2020			2019
Operating activities
Net income	$	1,927		$	1,977
Net loss (income) attributable to noncontrolling interests	3			(14		)
Net income applicable to shareholders of The Bank of New York Mellon Corporation	1,930			1,963
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Provision for credit losses (a)	312			(1		)
Pension plan contributions	(12		)	(22		)
Depreciation and amortization	744			635
Deferred tax (benefit)	(363		)	(110		)
Net securities (gains)	(18		)	(8		)
Change in trading assets and liabilities	171			(1,306		)
Change in accruals and other, net	2,361			(3,665		)
Net cash provided by (used for) operating activities	5,125			(2,514		)
Investing activities
Change in interest-bearing deposits with banks	(3,710		)	(1,618		)
Change in interest-bearing deposits with the Federal Reserve and other central banks	(18,117		)	(1,714		)
Purchases of securities held-to-maturity	(14,499		)	(3,739		)
Paydowns of securities held-to-maturity	3,541			2,078
Maturities of securities held-to-maturity	1,836			1,380
Purchases of securities available-for-sale	(44,865		)	(21,503		)
Sales of securities available-for-sale	8,414			6,346
Paydowns of securities available-for-sale	4,416			3,226
Maturities of securities available-for-sale	12,241			14,143
Net change in loans	(610		)	4,116
Sales of loans and other real estate	2			52
Change in federal funds sold and securities purchased under resale agreements	(6,516		)	(14,401		)
Net change in seed capital investments	19			25
Purchases of premises and equipment/capitalized software	(623		)	(717		)
Other, net	(275		)	940
Net cash (used for) investing activities	(58,746		)	(11,386		)
Financing activities
Change in deposits	47,576			14,255
Change in federal funds purchased and securities sold under repurchase agreements	3,155			(2,486		)
Change in payables to customers and broker-dealers	6,260			(778		)
Change in other borrowed funds	1,036			(1,328		)
Change in commercial paper	(3,294		)	6,955
Net proceeds from the issuance of long-term debt	2,246			1,248
Repayments of long-term debt	(3,000		)	(2,750		)
Proceeds from the exercise of stock options	33			35
Issuance of common stock	6			16
Issuance of preferred stock	990			—
Treasury stock acquired	(988		)	(1,305		)
Common cash dividends paid	(560		)	(540		)
Preferred cash dividends paid	(85		)	(84		)
Other, net	15			7
Net cash provided by financing activities	53,390			13,245
Effect of exchange rate changes on cash	(50		)	(11		)
Change in cash and due from banks and restricted cash
Change in cash and due from banks and restricted cash	(281		)	(666		)
Cash and due from banks and restricted cash at beginning of period	7,267			8,258
Cash and due from banks and restricted cash at end of period	$	6,986		$	7,592
Cash and due from banks and restricted cash
Cash and due from banks at end of period (unrestricted cash)	$	4,776		$	5,556
Restricted cash at end of period	2,210			2,036
Cash and due from banks and restricted cash at end of period	$	6,986		$	7,592
Supplemental disclosures
Interest paid	$	1,013		$	2,238
Income taxes paid	756			461
Income taxes refunded	11			347

(a) In the first quarter of 2020, we adopted new accounting guidance included in ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, on a prospective basis. See Note 2 of the Notes to Consolidated Financial Statements for additional information.

See accompanying unaudited Notes to Consolidated Financial Statements.

BNY Mellon 53

The Bank of New York Mellon Corporation (and its subsidiaries)

Consolidated Statement of Changes in Equity (unaudited)

	The Bank of New York Mellon Corporation shareholders															Nonredeemable noncontrolling interests of consolidated investment management funds		Total permanent equity				Redeemable non- controlling interests/ temporary equity
(in millions, except per share amount)	Preferred stock		Common stock		Additional paid-in capital		Retained earnings			Accumulated other comprehensive (loss), net of tax			Treasury stock
Balance at March 31, 2020	$	3,542	$	14	$	27,644	$	32,601		$	(2,827	)	$	(19,829	)	$	94	$	41,239		(a)	$	140
Shares issued to shareholders of noncontrolling interests	—		—		—		—			—			—			—		—				17
Other net changes in noncontrolling interests	—		—		—		—			—			—			3		3				—
Net income	—		—		—		950			—			—			15		965				—
Other comprehensive income	—		—		—		—			884			—			—		884				—
Dividends:
Common stock at $0.31 per share	—		—		—		(278		)	—			—			—		(278		)		—
Preferred stock	—		—		—		(49		)	—			—			—		(49		)		—
Repurchase of common stock	—		—		—		—			—			(3		)	—		(3		)		—
Common stock issued under employee benefit plans	—		—		6		—			—			—			—		6				—
Preferred stock issued	990		—		—		—			—			—			—		990				—
Stock awards and options exercised	—		—		52		—			—			—			—		52				—
Balance at June 30, 2020	$	4,532	$	14	$	27,702	$	33,224		$	(1,943	)	$	(19,832	)	$	112	$	43,809		(a)	$	157

(a) Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,603 million at March 31, 2020 and $39,165 million at June 30, 2020.

	The Bank of New York Mellon Corporation shareholders																Nonredeemable noncontrolling interests of consolidated investment management funds			Total permanent equity				Redeemable non- controlling interests/ temporary equity
(in millions, except per share amount)	Preferred stock		Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive (loss), net of tax			Treasury stock
Balance at Dec. 31, 2019	$	3,542	$	14	$	27,515		$	31,894		$	(2,638	)	$	(18,844	)	$	102		$	41,585		(a)	$	143
Impact of adopting ASU 2016-13, Financial Instruments – Credit Losses	—		—		—			45			(5		)	—			—			40				—
Adjusted balance at Jan. 1, 2020	3,542		14		27,515			31,939			(2,643		)	(18,844		)	102			41,625				143
Shares issued to shareholders of noncontrolling interests	—		—		—			—			—			—			—			—				17
Redemption of subsidiary shares from noncontrolling interests	—		—		—			—			—			—			—			—				(16		)
Other net changes in noncontrolling interests	—		—		(5		)	—			—			—			10			5				(2		)
Net income (loss)	—		—		—			980			—			—			(18		)	962				—
Other comprehensive (loss)	—		—		—			—			(184		)	—			—			(184		)		(2		)
Dividends:
Common stock at $0.31 per share	—		—		—			(282		)	—			—			—			(282		)		—
Preferred stock	—		—		—			(36		)	—			—			—			(36		)		—
Repurchase of common stock	—		—		—			—			—			(985		)	—			(985		)		—
Common stock issued under employee benefit plans	—		—		9			—			—			—			—			9				—
Stock awards and options exercised	—		—		125			—			—			—			—			125				—
Balance at March 31, 2020	$	3,542	$	14	$	27,644		$	32,601		$	(2,827	)	$	(19,829	)	$	94		$	41,239		(a)	$	140

(a) Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,941 million at Dec. 31, 2019 and $37,603 million at March 31, 2020.

54 BNY Mellon

The Bank of New York Mellon Corporation (and its subsidiaries)

Consolidated Statement of Changes in Equity (unaudited) (continued) 

	The Bank of New York Mellon Corporation shareholders															Nonredeemable noncontrolling interests of consolidated investment management funds		Total permanent equity				Redeemable non- controlling interests/ temporary equity
(in millions, except per share amount)	Preferred stock		Common stock		Additional paid-in capital		Retained earnings			Accumulated other comprehensive (loss), net of tax			Treasury stock
Balance at March 31, 2019	$	3,542	$	14	$	27,349	$	29,382		$	(2,990	)	$	(16,072	)	$	122	$	41,347		(a)	$	122
Shares issued to shareholders of noncontrolling interests	—		—		—		—			—			—			—		—				16
Other net changes in noncontrolling interests	—		—		2		—			—			—			40		42				(2		)
Net income	—		—		—		1,017			—			—			4		1,021				—
Other comprehensive income	—		—		—		—			302			—			—		302				—
Dividends:
Common stock at $0.28 per share	—		—		—		(270		)	—			—			—		(270		)		—
Preferred stock	—		—		—		(48		)	—			—			—		(48		)		—
Repurchase of common stock	—		—		—		—			—			(750		)	—		(750		)		—
Common stock issued under employee benefit plans	—		—		6		—			—			—			—		6				—
Stock awards and options exercised	—		—		49		—			—			—			—		49				—
Balance at June 30, 2019	$	3,542	$	14	$	27,406	$	30,081		$	(2,688	)	$	(16,822	)	$	166	$	41,699		(a)	$	136

(a) Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,683 million at March 31, 2019 and $37,991 million at June 30, 2019.

	The Bank of New York Mellon Corporation shareholders																Nonredeemable noncontrolling interests of consolidated investment management funds			Total permanent equity				Redeemable non- controlling interests/ temporary equity
(in millions, except per share amount)	Preferred stock		Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive (loss), net of tax			Treasury stock
Balance at Dec. 31, 2019	$	3,542	$	14	$	27,515		$	31,894		$	(2,638	)	$	(18,844	)	$	102		$	41,585		(a)	$	143
Impact of adopting ASU 2016-13, Financial Instruments – Credit Losses	—		—		—			45			(5		)	—			—			40				—
Adjusted balance at Jan. 1, 2020	3,542		14		27,515			31,939			(2,643		)	(18,844		)	102			41,625				143
Shares issued to shareholders of noncontrolling interests	—		—		—			—			—			—			—			—				34
Redemption of subsidiary shares from noncontrolling interests	—		—		—			—			—			—			—			—				(16		)
Other net changes in noncontrolling interests	—		—		(5		)	—			—			—			13			8				(2		)
Net income (loss)	—		—		—			1,930			—			—			(3		)	1,927				—
Other comprehensive income (loss)	—		—		—			—			700			—			—			700				(2		)
Dividends:
Common stock at $0.62 per share	—		—		—			(560		)	—			—			—			(560		)		—
Preferred stock	—		—		—			(85		)	—			—			—			(85		)		—
Repurchase of common stock	—		—		—			—			—			(988		)	—			(988		)		—
Common stock issued under employee benefit plans	—		—		15			—			—			—			—			15				—
Preferred stock issued	990		—		—			—			—			—			—			990				—
Stock awards and options exercised	—		—		177			—			—			—			—			177				—
Balance at June 30, 2020	$	4,532	$	14	$	27,702		$	33,224		$	(1,943	)	$	(19,832	)	$	112		$	43,809		(a)	$	157

(a) Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,941 million at Dec. 31, 2019 and $39,165 million at June 30, 2020.

BNY Mellon 55

The Bank of New York Mellon Corporation (and its subsidiaries)

Consolidated Statement of Changes in Equity (unaudited) (continued) 

	The Bank of New York Mellon Corporation shareholders															Nonredeemable noncontrolling interests of consolidated investment management funds		Total permanent equity				Redeemable non- controlling interests/ temporary equity
(in millions, except per share amount)	Preferred stock		Common stock		Additional paid-in capital		Retained earnings			Accumulated other comprehensive (loss), net of tax			Treasury stock
Balance at Dec. 31, 2018	$	3,542	$	14	$	27,118	$	28,652		$	(3,171	)	$	(15,517	)	$	101	$	40,739		(a)	$	129
Reclassification of certain tax effects related to adopting ASU 2018-02	—		—		—		90			(90		)	—			—		—				—
Adjusted balance at Jan. 1, 2019	3,542		14		27,118		28,742			(3,261		)	(15,517		)	101		40,739				129
Shares issued to shareholders of noncontrolling interests	—		—		—		—			—			—			—		—				36
Redemption of subsidiary shares from noncontrolling interests	—		—		—		—			—			—			—		—				(7		)
Other net changes in noncontrolling interests	—		—		21		—			—			—			51		72				(24		)
Net income	—		—		—		1,963			—			—			14		1,977				—
Other comprehensive income	—		—		—		—			573			—			—		573				2
Dividends:
Common stock at $0.56 per share	—		—		—		(540		)	—			—			—		(540		)		—
Preferred stock	—		—		—		(84		)	—			—			—		(84		)		—
Repurchase of common stock	—		—		—		—			—			(1,305		)	—		(1,305		)		—
Common stock issued under:
Employee benefit plans	—		—		16		—			—			—			—		16				—
Direct stock purchase and dividend reinvestment plan	—		—		11		—			—			—			—		11				—
Stock awards and options exercised	—		—		240		—			—			—			—		240				—
Balance at June 30, 2019	$	3,542	$	14	$	27,406	$	30,081		$	(2,688	)	$	(16,822	)	$	166	$	41,699		(a)	$	136

(a) Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,096 million at Dec. 31, 2018 and $37,991 million at June 30, 2019.

See accompanying unaudited Notes to Consolidated Financial Statements.

56 BNY Mellon

Notes to Consolidated Financial Statements

Note 1–Basis of presentation

In this Quarterly Report on Form 10-Q, references to “our,” “we,” “us,” “BNY Mellon,” the “Company” and similar terms refer to The Bank of New York Mellon Corporation and its consolidated subsidiaries. The term “Parent” refers to The Bank of New York Mellon Corporation but not its subsidiaries.

Basis of presentation

The accounting and financial reporting policies of BNY Mellon, a global financial services company, conform to U.S. generally accepted accounting principles (“GAAP”) and prevailing industry practices. For information on our significant accounting and reporting policies, see Note 1 in our 2019 Annual Report.

The accompanying consolidated financial statements are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of financial position, results of operations and cash flows for the periods presented have been made. These financial statements should be read in conjunction with our 2019 Annual Report. Certain immaterial reclassifications have been made to prior periods to place them on a basis comparable with the current period presentation.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates based upon assumptions about future economic and market conditions which affect reported amounts and related disclosures in our financial statements. Although our current estimates contemplate current conditions and how we expect them to change in the future, it is reasonably possible that actual conditions could be worse than anticipated in those estimates, which could materially affect our results of operations and financial condition.

Note 2–Accounting changes and new accounting guidance

The following accounting guidance was adopted in the first quarter of 2020.

Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments

In June 2016, the Financial Accounting Standards Board (“FASB”) issued an ASU, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments. This ASU introduces a new current expected credit losses model, which applies to financial assets subject to credit losses and measured at amortized cost, including held-to-maturity securities and certain off-balance sheet credit exposures. The guidance also changes current practice for the impairment model for available-for-sale debt securities by requiring the use of an allowance to record estimated credit losses and subsequent recoveries. The standard requires a cumulative effect of initial application to be recognized in retained earnings at the date of initial application.

In conjunction with adopting the new standard, we developed expected credit loss models and approaches that include consideration of multiple forecast scenarios and other methodologies. On Jan. 1, 2020, we adopted this new accounting guidance on a prospective basis and recognized a $45 million after-tax increase in retained earnings primarily attributable to a reduction to the allowance for credit losses for our commercial lending portfolios. The comparative financial information for prior periods has not been restated. See the Consolidated Balance Sheet and Notes 4 and 5 for the disclosures required by this ASU.

BNY Mellon 57

Notes to Consolidated Financial Statements (continued)

The table below presents the reconciliation of the allowance for credit losses (pre-tax).

Allowance for credit losses
(in millions)
Allowance for credit losses – Dec. 31, 2019	$	216
Impact of adopting ASU 2016-13:
Securities	7
Loans (a)	(69		)
Other	3
Total impact of adoption of ASU 2016-13	(59		)
Reclassification of credit-related reserves on accounts receivable	4
Allowance for credit losses – Jan. 1, 2020	$	161

(a) Includes $48 million related to loans and $21 million for lending-related commitments.

Significant accounting policies

Loans

Loans are reported at amortized cost, net of any unearned income and deferred fees and costs. Certain loan origination and upfront commitment fees, as well as certain direct loan origination and commitment costs, are deferred and amortized as a yield adjustment over the lives of the related loans. Loans held for sale are carried at the lower of cost or fair value.

Troubled debt restructuring/loan modifications

A modified loan is considered a troubled debt restructuring (“TDR”) if the debtor is experiencing financial difficulties and the creditor grants a concession to the debtor that would not otherwise be considered. A TDR may include a transfer of real estate or other assets from the debtor to the creditor, or a modification of the term of the loan. Credit losses related to TDRs are accounted for under an individual evaluation methodology (see “Allowance for credit losses” below). Credit losses for anticipated TDRs are accounted for similarly to TDRs and are identified when there is a reasonable expectation that a TDR will be executed with the borrower and when we expect the modification to affect the timing or amount of payments and/or the payment term.

Due to the coronavirus pandemic, there have been two forms of relief provided for classifying loans as TDRs: The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and the Interagency Guidance (as defined below). Financial institutions

may account for eligible loan modifications either under the CARES Act or the Interagency Guidance. The Company has elected to apply both the CARES Act and the Interagency Guidance, as applicable, in providing borrowers with loan modification relief in response to the coronavirus pandemic.

The CARES Act, which became law on March 27, 2020, provides that financial institutions may, subject to certain conditions, elect to temporarily suspend the U.S. GAAP requirements with respect to loan modifications related to the coronavirus pandemic that were current as of Dec. 31, 2019 and that would otherwise be identified and treated as TDRs.

This TDR relief is applicable to modifications that were made from March 1, 2020 until the earlier of Dec. 31, 2020 or 60 days from the date the national emergency related to the coronavirus pandemic officially ends.

Various banking regulators issued guidance in the April 7, 2020 “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (revised)” (“Interagency Guidance”) on loan modification treatment pursuant to which financial institutions can apply the U.S. GAAP requirements for loan modifications. In accordance with this guidance, a loan modification is not considered a TDR if the modification is related to the coronavirus pandemic, the borrower had been current when the modification program was implemented, and the modification includes payment deferrals for not more than 6 months.

Nonperforming assets

Commercial loans are placed on nonaccrual status when principal or interest is past due 90 days or more, or when there is reasonable doubt that interest or principal will be collected.

When a first or second lien residential mortgage loan reaches 90 days delinquent, it is subject to an individual evaluation of credit loss and placed on nonaccrual status.

When a loan is placed on nonaccrual status, previously accrued and uncollected interest is reversed against current period interest revenue. Interest receipts on nonaccrual loans are recognized as interest revenue or are applied to principal when

58 BNY Mellon

Notes to Consolidated Financial Statements (continued)

we believe the ultimate collectability of principal is in doubt. Nonaccrual loans generally are restored to an accrual basis when principal and interest become current and remain current for a specified period.

“Allowance for credit losses” below provides additional information regarding the individual evaluation of credit losses for nonperforming loans.

Allowance for credit losses

The accounting policy for estimating credit losses related to financial assets measured at amortized cost, including loans and lending-related commitments changed beginning in the first quarter of 2020 as a result of the adoption of ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments. This ASU also included targeted amendments with respect to credit losses for available-for-sale debt securities. The accounting policy for determining the allowances has been identified as a “critical accounting estimate” as it requires us to make numerous complex and subjective estimates and assumptions relating to amounts which are judgmental and inherently uncertain.

Credit quality is monitored by management and is reflected within the allowance for credit losses. The allowance represents management’s estimate of expected credit losses over the expected contractual life of the financial instruments as of the balance sheet date. The allowance methodology is designed to provide procedural discipline in assessing the appropriateness of the allowance.

A quantitative methodology and qualitative framework is used to estimate the allowance for credit losses. The qualitative framework is described in further detail within “Allowance for credit losses - Other” below. The quantitative component of our estimate 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 allowance may be determined using various methods, including discounted cash flow methods, loss-rate methods, probability of default methods or other methods that we determine to be appropriate. We estimate our expected credit losses using the

probability of default method for the majority of our financial assets. We measure expected credit losses of financial assets on a collective (pool) basis when similar risk characteristics exist. For a financial asset that does not share risk characteristics with other assets, expected credit losses are measured based on an individual evaluation method.

In our estimate, with the exception of our small home equity line of credit portfolio, available-for-sale debt securities, and individually evaluated financial assets, we utilize a multi-scenario macroeconomic forecast which includes a weighting of baseline, stronger near-term growth and moderate recession scenarios. This approach allows us to develop our estimate using a wide span of economic input variables. Our baseline scenario reflects a view on likely performance of each global region and the other two scenarios are designed relative to the baseline scenario. The scenarios include both a reasonable and supportable forecast period as well as a reversion period. The reasonable and supportable forecast is typically over a two to three-year horizon, followed by a reversion period in which the economic data reverts to long-term historical experience. In general, the forecasts across the alternative economic scenarios tend to revert toward the long-term trends after the forecast period, which is the period in which the confidence interval is considered reasonable and supportable. The speed at which the scenario specific forecasts revert is based on observed historical patterns of mean reversion that are reflected in our model parameter estimates. Certain macroeconomic variables such as unemployment or home prices take longer to revert after a contraction, though specific recovery times are scenario-specific. Reversion will usually take longer the further away the scenario specific forecast is from the historical mean. On a quarterly basis, within a developed governance structure, we update these scenarios for current economic conditions and may adjust the scenario weighting based on our economic outlook.

Allowance for credit losses - Loans and lending-related commitments

The allowance for credit losses on loans is presented as a valuation allowance to loans, and the allowance for credit losses on lending-related commitments is recorded in other liabilities. The components of the allowance for credit losses on loans and lending-related commitments consist of the following three elements:

BNY Mellon 59

Notes to Consolidated Financial Statements (continued)

• a pooled allowance component for higher risk-rated and pass-rated commercial and institutional credits;

• a pooled allowance component for residential mortgage loans; and

• an asset-specific allowance component involving individually evaluated credits of $1 million or greater.

The first element, a pooled allowance component for higher risk-rated and pass-rated commercial and institutional credits, is based on our expected credit loss model. Individual credit analyses are performed on such loans before being assigned a credit rating. All borrowers are collectively evaluated based on their credit rating. The loss expected in each loan incorporates the borrower’s credit rating, facility rating and maturity. The loss given default, derived from the facility rating, incorporates a recovery expectation, and for unfunded lending exposures, an estimate of the use of the facility at default (usage given default). The borrower’s probability of default is derived from the associated credit rating. For each of the different parameters, specific credit models are developed for each segment of our portfolio, including commercial loans and lease financing, commercial real estate, financial institutions, and other. Segmentation is established based on risk characteristics of the loans and how risk is monitored. We use both internal and external data in the development of these parameters. In estimating the term of the exposures and resulting effect on the measurement of expected credit loss, we consider the impact of potential prepayments as well as the effect of borrower extension options. Borrower ratings are reviewed at least annually and are periodically mapped to third-party databases, including rating agency and default and recovery databases, to ensure ongoing consistency and validity. Higher risk-rated loans and lending-related commitments are reviewed quarterly.

The second element, a pooled allowance component for residential mortgage loans, is determined by first segregating our mortgage pools into two categories: (i) our wealth management mortgages and (ii) our legacy mortgage portfolio disclosed as other residential mortgages. We then apply models to each portfolio to predict prepayments, default rates and loss severity. We consider historical loss experience and use a loan-level, multi-period default model which further segments each portfolio by product

type including first lien fixed rate mortgages, first lien adjustable rate mortgages, second lien mortgages, and interest-only mortgages. We calculate the mortgage loss up to loan contractual maturity and embed a reasonable and supportable forecast and macroeconomic variable inputs which are described above. For home equity lines of credit, probability of default and loss given default are based on external data from third-party databases due to the small size of the portfolio and limited internal data. Our legacy mortgage portfolio and home equity line of credit portfolios represent small sub-segments of our mortgage loans.

The third element, individually evaluated credits, is based on individual analysis of loans of $1 million and greater which no longer share the risk characteristics with other loans. Factors we consider in measuring the extent of expected credit loss include the payment status, collateral value, the borrower’s financial condition, guarantor support, the probability of collecting scheduled principal and interest payments when due, anticipated modifications of payment structure or term for troubled borrowers, and recoveries if they can be reasonably estimated. We measure the expected credit loss as the difference between the amortized cost basis in the loan and the present value of the expected future cash flows from the borrower which is generally discounted at the loan’s effective interest rate, or the fair value of the collateral, if the loan is collateral dependent. We generally consider nonperforming loans as well as loans that have been or are anticipated to be modified under a troubled debt restructuring for individual evaluation given the risk characteristics of such loans.

Allowance for credit losses - Securities - Debt

When estimating expected credit losses, we segment our available-for-sale and held-to-maturity debt securities portfolios by major asset class. This is influenced by whether the security is structured or non-structured (i.e., direct obligation), as well as the issuer type.

Debt securities are classified as available-for-sale securities when we intend to hold the securities for an indefinite period of time or when the securities may be used for tactical asset/liability management purposes and may be sold from time to time to effectively manage interest rate exposure, prepayment risk and liquidity needs. Available-for-sale securities

60 BNY Mellon

Notes to Consolidated Financial Statements (continued)

are measured at fair value. The difference between fair value and amortized cost represents the unrealized gains or losses on assets classified as available-for-sale, and is recorded net of tax as an addition to, or deduction from, other comprehensive income, unless we determine that this difference or a portion thereof represents an expected credit loss. If we determine that a credit loss exists, the amount is recognized as an allowance for credit losses in securities - available-for sale, with a corresponding adjustment to the provision for credit losses. We evaluate credit losses at the individual security level and do not recognize credit losses if the fair value exceeds amortized cost, and if we determine that a credit loss exists, we limit the recognition of the loss to the difference between fair value and amortized cost. In our determination of whether an expected credit loss exists, we routinely conduct periodic reviews and examine various quantitative and qualitative factors that are unique to each portfolio, including the severity of the unrealized loss position, agency rating, credit enhancement, cash flow deterioration and other factors. The measurement of an expected credit loss is then based on the best estimate of the present value of cash flows to be collected from the debt security. Generally, cash flows are discounted at the effective interest rate implicit in the debt security. Changes to the present value of cash flows due to the passage of time are recognized within the allowance for credit losses.

We estimate expected credit losses for held-to-maturity debt securities using a similar methodology as described in the first allowance element within “Allowance for credit losses - Loans and lending-related commitments” above. The allowance for credit losses on held-to-maturity debt securities are recorded in securities - held-to-maturity. The components of the credit loss calculation for each major portfolio or asset class include a probability of default and loss given default and their values depend on the forecast behavior of variables in the macroeconomic environment. For structured debt securities, we estimated expected credit losses at the individual security level and use a cash flow model to project principal losses. Generally, cash flows are discounted at the effective interest rate implicit in the debt security. The difference is reflected in the allowance for credit losses, and changes to the present value of cash flows due to the passage of time are recognized within the allowance for credit losses.

We currently do not require an estimate of expected credit losses to be measured and recorded for U.S. Treasury securities, agency debt securities, as well as other debt securities that meet certain conditions that are based on a combination of factors such as guarantees, credit ratings, and other credit quality factors. These assets are monitored within our established governance structure on a recurring basis to determine if any changes are warranted.

Allowance for credit losses – Other financial instruments

We also estimate expected credit losses associated with margin loans, reverse repurchase agreements, security lending indemnifications, and deposits with third-party financial institutions using a similar methodology as described in the first allowance element within “Allowance for credit losses - Loans and lending-related commitments” above. The allowance for credit losses on reverse repurchase agreements are recorded in federal funds sold and securities purchased under resale agreements; the allowance for credit losses on securities lending indemnifications is recorded in other liabilities and the allowance for credit losses on deposits with third party financial institutions is recorded in cash and due from banks or interest-bearing deposits with banks. Our reverse repurchase agreements are short term and subject to continuous overcollateralization by our counterparties and timely collateral replenishment, when necessary. As a result, we estimate the expected credit loss related to the uncollateralized portion of the asset at the balance sheet date, if any, and when there is a reasonable expectation that the counterparty will not replenish the collateral in compliance with the terms of the repurchase agreement. This method is also applied to margin lending arrangements and securities lending indemnifications.

Allowance for credit losses - Other

We do not apply our credit loss measurement methodologies to accrued interest receivable balances related to our loan, debt securities and deposits with third party financial institutions assets given our nonaccrual policy that requires charge-off of interest receivable when deemed uncollectible. Accrued interest receivable related to these instruments is presented in total with other interest-bearing instruments in the consolidated balance sheet. Accrued interest receivable related to each major loan

BNY Mellon 61

Notes to Consolidated Financial Statements (continued)

class is disclosed within our credit quality disclosure in Note 5.

Our policy for credit losses related to purchased financial assets requires an evaluation to be performed prior to the effective purchase date to determine if more than an insignificant decline in credit quality has occurred during the period between the origination and purchase date, or in the case of debt securities, the period between the issuance and purchase date. If we purchase a financial asset with more than insignificant deterioration in credit quality, the measurement of expected credit loss is performed using the methodologies described above, and the credit loss is recorded as an allowance for credit losses on the purchase date. Subsequent to purchase, changes (favorable and unfavorable) in expected cash flows are recognized immediately in net income by adjusting the allowance. We evaluate various factors in the determination of whether a more than an insignificant decline in credit quality has occurred and these factors vary depending upon the type of asset purchased. Such factors include changes in risk rating and/or agency rating, collateral deterioration, payment status, purchase price, credit spreads, and other factors. We did not purchase any such assets during the first six months of 2020 and did not own such assets as of June 30, 2020.

We apply a separate credit loss methodology to accounts receivables to estimate the expected credit losses associated with these short-term receivables which historically have not resulted in significant credit losses. The allowance for credit losses on accounts receivable is reflected in other assets.

The qualitative component of our estimate for the allowance for credit losses is intended to capture expected losses that may not have been fully captured in the quantitative component. Through an established governance structure, management determines the qualitative allowance each period based on an evaluation of various internal and environmental factors which include: scenario weighting and sensitivity risk, credit concentration risk, economic conditions and other considerations. We may also make adjustments for idiosyncratic

risks. Once determined in the aggregate, our qualitative allowance is then allocated to each of our financial instrument portfolios except for debt securities and those instruments carried in other assets based on the respective instruments’ quantitative allowance balances. The allocation of this additional allowance for credit losses is inherently judgmental, and the entire allowance for credit losses is available to absorb credit losses regardless of the nature of the loss.

Note 3–Acquisitions and dispositions

We sometimes structure our acquisitions with both an initial payment and later contingent payments tied to post-closing revenue or income growth. Contingent payments totaled $3 million in the second quarter of 2020 and the first six months of 2020.

At June 30, 2020, we are potentially obligated to pay additional consideration which, using reasonable assumptions, could range from $5 million to $10 million over the next two years, but could be higher as certain of the arrangements do not contain a contractual maximum.

Transaction in 2019

On Nov. 8, 2019, BNY Mellon, along with the other holders of Promontory Interfinancial Network, LLC (“PIN”), completed the sale of their interests in PIN. BNY Mellon recorded an after-tax gain of $622 million on the sale of this equity investment.

Note 4–Securities

On Jan. 1, 2020, we adopted ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments on a prospective basis. See Note 2 for the significant accounting policy related to securities.

The following tables present the amortized cost, the gross unrealized gains and losses and the fair value of securities at June 30, 2020 and Dec. 31, 2019.

62 BNY Mellon

Notes to Consolidated Financial Statements (continued)

Securities at June 30, 2020			Gross unrealized				Fair value
	Amortized cost
(in millions)			Gains		Losses
Available-for-sale:
Agency RMBS	$	26,005	$	516	$	84	$	26,437
U.S. Treasury	23,537		1,600		—		25,137
Sovereign debt/sovereign guaranteed	15,724		165		2		15,887
Agency commercial mortgage-backed securities (“MBS”)	9,357		633		2		9,988
Foreign covered bonds	5,469		53		3		5,519
Supranational	5,385		64		1		5,448
Collateralized loan obligations (“CLOs”)	4,526		4		98		4,432
Foreign government agencies	3,536		42		—		3,578
U.S. government agencies	2,635		173		2		2,806
Other asset-backed securities (“ABS”)	2,724		29		10		2,743
Non-agency commercial MBS	2,517		129		16		2,630
Commercial paper/certificates of deposit (“CDs”)	1,849		4		—		1,853
Non-agency RMBS (a)	1,464		149		15		1,598
State and political subdivisions	1,150		31		2		1,179
Corporate bonds	789		42		—		831
Other debt securities	1		—		—		1
Total securities available-for-sale (b)(c)	$	106,668	$	3,634	$	235	$	110,067
Held-to-maturity:
Agency RMBS	$	32,869	$	1,108	$	9	$	33,968
U.S. Treasury	4,687		114		1		4,800
U.S. government agencies	2,349		6		3		2,352
Agency commercial MBS	1,982		108		—		2,090
Commercial paper/CDs	1,537		2		—		1,539
Sovereign debt/sovereign guaranteed	974		41		—		1,015
Foreign covered bonds	79		—		—		79
Non-agency RMBS	73		3		2		74
Supranational	49		—		—		49
State and political subdivisions	16		1		—		17
Total securities held-to-maturity	$	44,615	$	1,383	$	15	$	45,983
Total securities	$	151,283	$	5,017	$	250	$	156,050

(a) Includes $538 million that was included in the former Grantor Trust.

(b) In the first quarter of 2020, we adopted new accounting guidance included in ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, on a prospective basis. The allowance for credit loss on available-for-sale securities of $12 million primarily relates to CLOs. See Note 2 for additional information.

(c) Includes gross unrealized gains of $28 million and gross unrealized losses of $55 million recorded in accumulated other comprehensive income related to securities that were transferred from available-for-sale to held-to-maturity. The unrealized gains and losses are primarily related to Agency RMBS and will be amortized into net interest revenue over the contractual lives of the securities.

Securities at Dec. 31, 2019			Gross unrealized
	Amortized cost						Fair value
(in millions)			Gains		Losses
Available-for-sale:
Agency RMBS	$	27,022	$	164	$	143	$	27,043
U.S. Treasury	14,979		472		20		15,431
Sovereign debt/sovereign guaranteed	12,548		109		11		12,646
Agency commercial MBS	9,231		203		17		9,417
Foreign covered bonds	4,189		15		7		4,197
CLOs	4,078		1		16		4,063
Supranational	3,697		18		6		3,709
Foreign government agencies	2,638		7		2		2,643
Non-agency commercial MBS	2,134		46		2		2,178
Other ABS	2,141		7		5		2,143
U.S. government agencies	1,890		61		2		1,949
Non-agency RMBS (a)	1,038		202		7		1,233
State and political subdivisions	1,017		27		—		1,044
Corporate bonds	832		21		—		853
Other debt securities	1		—		—		1
Total securities available-for-sale (b)	$	87,435	$	1,353	$	238	$	88,550
Held-to-maturity:
Agency RMBS	$	27,357	$	292	$	46	$	27,603
U.S. Treasury	3,818		28		3		3,843
Agency commercial MBS	1,326		21		3		1,344
U.S. government agencies	1,023		1		2		1,022
Sovereign debt/sovereign guaranteed	756		31		—		787
Non-agency RMBS	80		4		1		83
Foreign covered bonds	79		—		—		79
Supranational	27		—		—		27
State and political subdivisions	17		—		—		17
Total securities held-to-maturity	$	34,483	$	377	$	55	$	34,805
Total securities	$	121,918	$	1,730	$	293	$	123,355

(a) Includes $640 million that was included in the former Grantor Trust.

(b) Includes gross unrealized gains of $32 million and gross unrealized losses of $65 million recorded in accumulated other comprehensive income related to securities that were transferred from available-for-sale to held-to-maturity. The unrealized gains and losses are primarily related to Agency RMBS and will be amortized into net interest revenue over the contractual lives of the securities.

The following table presents the realized gains, losses and impairments, on a gross basis.

Net securities gains (losses)
(in millions)	2Q20			1Q20			2Q19			YTD20			YTD19
Realized gross gains	$	16		$	12		$	12		$	28		$	17
Realized gross losses	(7		)	(3		)	(5		)	(10		)	(9		)
Recognized gross impairments	—			—			—			—			—
Total net securities gains	$	9		$	9		$	7		$	18		$	8

BNY Mellon 63

Notes to Consolidated Financial Statements (continued)

The following table presents pre-tax net securities gains by type.

Net securities gains
(in millions)	2Q20		1Q20		2Q19		YTD20		YTD19
Supranational	$	6	$	—	$	—	$	6	$	—
U.S. Treasury	1		5		3		6		4
Other	2		4		4		6		4
Total net securities gains	$	9	$	9	$	7	$	18	$	8

Allowance for credit losses - Securities

In the first quarter of 2020, we adopted new accounting guidance included in ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, on a prospective basis. The allowance for credit losses related to securities was $7 million on Jan. 1, 2020 and $12 million at June 30, 2020. The increase reflects additional credit deterioration in the available-for-sale CLO portfolio. For additional information about the review of securities under previous other-than-temporary impairment guidance, refer to Notes 1 and 4, both Notes to Consolidated Financial Statements, in our 2019 Annual Report.

Credit quality indicators - Securities

At June 30, 2020, the gross unrealized losses on the securities portfolio were primarily attributable to an increase in credit spreads from the date of purchase, and for certain securities that were transferred from available-for-sale to held-to-maturity, an increase in interest rates through the date they were transferred. Specifically, $55 million of the unrealized losses at June 30, 2020 and $65 million at Dec. 31, 2019 reflected in the available-for-sale sections of the tables below relate to certain securities (primarily Agency RMBS) that were transferred in prior periods from available-for-sale to held-to-maturity. The unrealized losses will be amortized into net interest revenue over the contractual lives of the securities. The transfer created a new cost basis for the securities. As a result, if these securities have experienced unrealized losses since the date of transfer, the corresponding fair value and unrealized losses would be reflected in the held-to-maturity sections of the following tables. We do not intend to sell these securities, and it is not more likely than not that we will have to sell these securities.

64 BNY Mellon

Notes to Consolidated Financial Statements (continued)

The following table shows the aggregate fair value of available-for-sale securities with a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 months or more without an allowance for credit losses.

Available-for-sale securities in an unrealized loss position at June 30, 2020 (a)	Less than 12 months				12 months or more				Total
	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
(in millions)
Agency RMBS	$	2,809	$	5	$	6,030	$	79	$	8,839	$	84
Sovereign debt/sovereign guaranteed	1,952		2		110		—		2,062		2
Agency commercial MBS	266		—		350		2		616		2
Foreign covered bonds	1,003		2		281		1		1,284		3
Supranational	931		1		233		—		1,164		1
CLOs	3,522		68		575		19		4,097		87
U.S. government agencies	79		2		—		—		79		2
Other ABS	760		6		203		4		963		10
Non-agency commercial MBS	476		15		39		1		515		16
Non-agency RMBS (b)	508		7		96		7		604		14
State and political subdivisions	79		2		2		—		81		2
Total securities available-for-sale (c)	$	12,385	$	110	$	7,919	$	113	$	20,304	$	223

(a) Includes $530 million of securities with an unrealized loss of greater than $1 million.

(b) Includes $42 million of securities with an unrealized loss of $1 million for less than 12 months and $1 million of securities with an unrealized loss of less than $1 million for 12 months or more that were included in the former Grantor Trust.

(c) Includes gross unrealized losses of $55 million for 12 months or more recorded in accumulated other comprehensive income related to securities that were transferred from available-for-sale to held-to-maturity. The unrealized losses are primarily related to Agency RMBS and will be amortized into net interest revenue over the contractual lives of the securities. There were no gross unrealized losses for less than 12 months.

The following table presents the temporarily impaired securities under the disclosure guidance that existed prior to the adoption of ASU 2016-13 and shows the aggregate fair value of available-for-sale securities with a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 months or more.

Temporarily impaired securities at Dec. 31, 2019	Less than 12 months				12 months or more				Total
(in millions)	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Available-for-sale:
Agency RMBS	$	8,373	$	33	$	5,912	$	110	$	14,285	$	143
U.S. Treasury	1,976		16		766		4		2,742		20
Sovereign debt/sovereign guaranteed	4,045		10		225		1		4,270		11
Agency commercial MBS	1,960		12		775		5		2,735		17
Foreign covered bonds	1,009		4		690		3		1,699		7
CLOs	1,066		2		1,499		14		2,565		16
Supranational	1,336		6		360		—		1,696		6
Foreign government agencies	1,706		2		47		—		1,753		2
Non-agency commercial MBS	525		2		45		—		570		2
Other ABS	456		3		305		2		761		5
U.S. government agencies	377		2		—		—		377		2
Non-agency RMBS (a)	101		—		113		7		214		7
State and political subdivisions	—		—		16		—		16		—
Corporate bonds	82		—		21		—		103		—
Total securities available-for-sale (b)	$	23,012	$	92	$	10,774	$	146	$	33,786	$	238

(a) Includes $2 million of securities with an unrealized loss of less than $1 million for less than 12 months and $2 million of securities with an unrealized loss of less than $1 million for 12 months or more that were included in the former Grantor Trust.

(b) Includes gross unrealized losses of $65 million for 12 months or more recorded in accumulated other comprehensive income related to securities that were transferred from available-for-sale to held-to-maturity. The unrealized losses are primarily related to Agency RMBS and will be amortized into net interest revenue over the contractual lives of the securities. There were no gross unrealized losses for less than 12 months.

BNY Mellon 65

Notes to Consolidated Financial Statements (continued)

The following table shows the credit quality of the held-to-maturity securities. We have included certain credit ratings information because the information can indicate the degree of credit risk to which we are exposed. Significant changes in ratings classifications could indicate increased credit risk for us and could be accompanied by a reduction in the fair value of our securities portfolio.

Held-to-maturity securities portfolio at June 30, 2020 (a)					Ratings (b)
			Net unrealized gain								BB+ and lower		A1+/A2/SP-1+
(dollars in millions)	Amortized cost				AAA/ AA-		A+/ A-		BBB+/ BBB-						Not rated
Agency RMBS	$	32,869	$	1,099	100	%	—	%	—	%	—	%	—	%	—	%
U.S. Treasury	4,687		113		100		—		—		—		—		—
U.S. government agencies	2,349		3		100		—		—		—		—		—
Agency commercial MBS	1,982		108		100		—		—		—		—		—
Commercial paper/CDs	1,537		2		—		—		—		—		100		—
Sovereign debt/sovereign guaranteed (c)	974		41		100		—		—		—		—		—
Foreign covered bonds (d)	79		—		100		—		—		—		—		—
Non-agency RMBS	73		1		42		43		2		12		—		1
Supranational	49		—		100		—		—		—		—		—
State and political subdivisions	16		1		6		2		6		—		—		86
Total held-to-maturity securities	$	44,615	$	1,368	96	%	1	%	—	%	—	%	3	%	—	%

(a) In the first quarter of 2020, we adopted new accounting guidance included in ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, on a prospective basis. See Note 2 for additional information.

(b) Represents ratings by Standard & Poor’s (“S&P”) or the equivalent.

(c) Primarily consists of exposure to France, UK and Germany.

(d) Primarily consists of exposure to Canada.

Maturity distribution

The following table shows the maturity distribution by carrying amount and yield (on a tax equivalent basis) of our securities portfolio.

Maturity distribution and yields on securities at June 30, 2020	U.S. Treasury				U.S. government agencies				State and political subdivisions				Other bonds, notes and debentures				Mortgage/ asset-backed
(dollars in millions)	Amount		Yield (a)		Amount		Yield (a)		Amount		Yield (a)		Amount		Yield (a)		Amount		Yield (a)		Total
Securities available-for-sale:
One year or less	$	5,348	0.50	%	$	25	2.55	%	$	178	2.92	%	$	13,826	0.71	%	$	—	—	%	$	19,377
Over 1 through 5 years	10,350		1.52		1,038		1.22		646		3.29		16,098		0.68		—		—		28,132
Over 5 through 10 years	6,171		1.67		1,623		2.56		107		2.42		2,838		0.53		—		—		10,739
Over 10 years	3,268		3.11		120		2.06		248		2.37		355		0.97		—		—		3,991
Mortgage-backed securities	—		—		—		—		—		—		—		—		40,653		2.24		40,653
Asset-backed securities	—		—		—		—		—		—		—		—		7,175		2.18		7,175
Total	$	25,137	1.54	%	$	2,806	2.04	%	$	1,179	2.96	%	$	33,117	0.69	%	$	47,828	2.23	%	$	110,067
Securities held-to-maturity:
One year or less	$	1,899	0.41	%	$	—	—	%	$	—	—	%	$	1,646	1.21	%	$	—	—	%	$	3,545
Over 1 through 5 years	2,788		1.91		1,696		1.12		3		5.66		919		0.66		—		—		5,406
Over 5 through 10 years	—		—		212		1.98		—		—		31		0.92		—		—		243
Over 10 years	—		—		441		2.33		13		4.76		43		0.35		—		—		497
Mortgage-backed securities	—		—		—		—		—		—		—		—		34,924		2.87		34,924
Total	$	4,687	1.32	%	$	2,349	1.42	%	$	16	4.91	%	$	2,639	1.00	%	$	34,924	2.87	%	$	44,615

(a) Yields are based upon the amortized cost of securities.

66 BNY Mellon

Notes to Consolidated Financial Statements (continued)

Pledged assets

At June 30, 2020, BNY Mellon had pledged assets of $139 billion, including $109 billion pledged as collateral for potential borrowings at the Federal Reserve Discount Window and $6 billion pledged as collateral for borrowing at the Federal Home Loan Bank. The components of the assets pledged at June 30, 2020 included $121 billion of securities, $12 billion of loans, $5 billion of trading assets and $1 billion of interest-bearing deposits with banks.

If there has been no borrowing at the Federal Reserve Discount Window, the Federal Reserve generally allows banks to freely move assets in and out of their pledged assets account to sell or repledge the assets for other purposes. BNY Mellon regularly moves assets in and out of its pledged assets account at the Federal Reserve.

At Dec. 31, 2019, BNY Mellon had pledged assets of $118 billion, including $80 billion pledged as collateral for potential borrowing at the Federal Reserve Discount Window and $6 billion pledged as collateral for borrowing at the Federal Home Loan Bank. The components of the assets pledged at Dec. 31, 2019 included $98 billion of securities, $13 billion of loans, $7 billion of trading assets and less than $1 billion of interest-bearing deposits with banks.

At June 30, 2020 and Dec. 31, 2019, pledged assets included $21 billion and $29 billion, respectively, for which the recipients were permitted to sell or repledge the assets delivered.

At June 30, 2020, we pledged commercial paper and CDs totaling $1.5 billion as collateral to the Federal Reserve Bank of Boston to secure non-recourse borrowings under the Federal Reserve’s Money Market Mutual Fund Liquidity Facility (“MMLF”) program.

We also obtain securities as collateral, including receipts under resale agreements, securities borrowed, derivative contracts and custody agreements, on terms which permit us to sell or repledge the securities to others. At June 30, 2020 and Dec. 31, 2019, the market value of the securities received that can be sold or repledged was $107 billion and $153 billion, respectively. We routinely sell or repledge these securities through delivery to third parties. As of June 30, 2020 and Dec. 31, 2019, the market value

of securities collateral sold or repledged was $72 billion and $107 billion, respectively.

Restricted cash and securities

Cash and securities may be segregated under federal and other regulations or requirements. At both June 30, 2020 and Dec. 31, 2019, cash segregated under federal and other regulations or requirements was $2 billion. Restricted cash is included in interest-bearing deposits with banks on the consolidated balance sheet. Securities segregated under federal and other regulations or requirements were $6 billion at June 30, 2020 and $1 billion at Dec. 31, 2019. Restricted securities were sourced from securities purchased under resale agreements and are included in federal funds sold and securities purchased under resale agreements on the consolidated balance sheet.

Note 5–Loans and asset quality

Loans

The table below provides the details of our loan portfolio.

Loans	June 30, 2020		Dec. 31, 2019
(in millions)
Domestic:
Commercial	$	2,192	$	1,442
Commercial real estate	6,217		5,575
Financial institutions	3,804		4,852
Lease financings	439		537
Wealth management loans and mortgages	15,753		16,050
Other residential mortgages	450		494
Overdrafts	1,073		524
Other	1,489		1,167
Margin loans	11,476		11,907
Total domestic	42,893		42,548
Foreign:
Commercial	253		347
Commercial real estate	11		7
Financial institutions	6,949		7,626
Lease financings	589		576
Wealth management loans and mortgages	122		140
Other (primarily overdrafts)	3,147		2,230
Margin loans	1,433		1,479
Total foreign	12,504		12,405
Total loans (a)	$	55,397	$	54,953

(a) Net of unearned income of $292 million at June 30, 2020 and $313 million at Dec. 31, 2019 primarily related to domestic and foreign lease financings.

BNY Mellon 67

Notes to Consolidated Financial Statements (continued)

Our loan portfolio consists of three portfolio segments: commercial, lease financings and mortgages. We manage our portfolio at the class level, which consists of six classes of financing receivables: commercial, commercial real estate, financial institutions, lease financings, wealth

management loans and mortgages, and other residential mortgages.

The following tables are presented for each class of financing receivables and provide additional information about our credit risks.

Allowance for credit losses

On Jan. 1, 2020, we adopted ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, on a prospective basis. See Note 2 for the significant accounting policy related to allowance for credit losses on loans and lending-related commitments.

Activity in the allowance for credit losses on loans and lending-related commitments is presented below.

Allowance for credit losses activity for the quarter ended June 30, 2020											Wealth management loans and mortgages			Other residential mortgages
(in millions)	Commercial		Commercial real estate		Financial institutions			Lease financings									Total
Beginning balance	$	26	$	208	$	18		$	13		$	9		$	14		$	288
Charge-offs	—		—		—			—			—			—			—
Recoveries	—		—		—			—			—			3			3
Net recoveries	—		—		—			—			—			3			3
Provision	14		164		(2		)	(10		)	2			(5		)	163
Ending balance (a)	$	40	$	372	$	16		$	3		$	11		$	12		$	454
Allowance for:
Loan losses	$	23	$	244	$	11		$	3		$	9		$	12		$	302
Lending-related commitments	17		128		5			—			2			—			152
Individually evaluated for impairment:
Loan balance	$	—	$	—	$	—		$	—		$	18	(b)	$	—		$	18
Allowance for loan losses	—		—		—			—			—			—			—

(a) Includes $11 million of allowance for credit losses related to foreign loans, primarily financial institutions.

(b) Includes collateral dependent loans of $18 million with $26 million of collateral at fair value.

Allowance for credit losses activity for the quarter ended March 31, 2020											Wealth management loans and mortgages				Other residential mortgages
(in millions)	Commercial			Commercial real estate		Financial institutions			Lease financings									Foreign			(a)	Total
Balance at Dec. 31, 2019	$	60		$	76	$	20		$	3	$	20			$	13		$	24			$	216
Impact of adopting ASU 2016-13	(43		)	14		(6		)	—		(12		)		2			(24		)		(69		)
Balance at Jan. 1, 2020	17			90		14			3		8				15			—				147
Charge-offs	—			—		—			—		—				—			—				—
Recoveries	—			—		—			—		—				—			—				—
Net (charge-offs) recoveries	—			—		—			—		—				—			—				—
Provision	9			118		4			10		1				(1		)	—				141
Ending balance (b)	$	26		$	208	$	18		$	13	$	9			$	14		$	—			$	288
Allowance for:
Loan losses	$	13		$	83	$	10		$	13	$	7			$	14		$	—			$	140
Lending-related commitments	13			125		8			—		2				—			—				148
Individually evaluated for impairment:
Loan balance	$	—		$	—	$	—		$	—	$	18		(c)	$	—		$	—			$	18
Allowance for loan losses	—			—		—			—		—				—			—				—

(a) The allowance related to foreign exposure has been reclassified to financial institutions ($10 million), commercial ($10 million) and lease financings ($4 million).

(b) Includes $12 million of allowance for credit losses related to foreign loans, primarily financial institutions.

(c) Includes collateral dependent loans of $18 million with $26 million of collateral at fair value.

68 BNY Mellon

Notes to Consolidated Financial Statements (continued)

Allowance for credit losses activity for the quarter ended June 30, 2019												Wealth management loans and mortgages			Other residential mortgages			All other			Foreign		Total
(in millions)	Commercial			Commercial real estate			Financial institutions			Lease financings
Beginning balance	$	82		$	74		$	23		$	4	$	21		$	15		$	—		$	29	$	248
Charge-offs	—			—			—			—		(1		)	—			—			—		(1		)
Recoveries	—			—			—			—		—			2			—			—		2
Net (charge-offs) recoveries	—			—			—			—		(1		)	2			—			—		1
Provision	(5		)	(2		)	(2		)	—		—			(3		)	—			4		(8		)
Ending balance	$	77		$	72		$	21		$	4	$	20		$	14		$	—		$	33	$	241
Allowance for:
Loan losses	$	23		$	57		$	8		$	4	$	17		$	14		$	—		$	23	$	146
Lending-related commitments	54			15			13			—		3			—			—			10		95
Individually evaluated for impairment:
Loan balance	$	96		$	—		$	—		$	—	$	16		$	—		$	—		$	—	$	112
Allowance for loan losses	10			—			—			—		—			—			—			—		10
Collectively evaluated for impairment:
Loan balance	$	1,356		$	5,192		$	4,574		$	662	$	15,563		$	549		$	12,849	(a)	$	11,539	$	52,284
Allowance for loan losses	13			57			8			4		17			14			—			23		136

(a) Includes $1,575 million of domestic overdrafts, $10,152 million of margin loans and $1,122 million of other loans at June 30, 2019.

Allowance for credit losses activity for the six months ended June 30, 2020											Wealth management loans and mortgages			Other residential mortgages			Foreign			Total
(in millions)	Commercial			Commercial real estate		Financial institutions			Lease financings
Balance at Dec. 31, 2019	$	60		$	76	$	20		$	3	$	20		$	13		$	24		$	216
Impact of adopting ASU 2016-13	(43		)	14		(6		)	—		(12		)	2			(24		)	(69		)
Balance at Jan. 1, 2020	17			90		14			3		8			15			—			147
Charge-offs	—			—		—			—		—			—			—			—
Recoveries	—			—		—			—		—			3			—			3
Net recoveries	—			—		—			—		—			3			—			3
Provision	23			282		2			—		3			(6		)	—			304
Ending balance	$	40		$	372	$	16		$	3	$	11		$	12		$	—		$	454

Allowance for credit losses activity for the six months ended June 30, 2019													Wealth management loans and mortgages			Other residential mortgages			All other		Foreign		Total
(in millions)	Commercial			Commercial real estate			Financial institutions			Lease financings
Beginning balance	$	81		$	75		$	22		$	5		$	21		$	16		$	—	$	32	$	252
Charge-offs	(11		)	—			—			—			(1		)	—			—		—		(12		)
Recoveries	—			—			—			—			—			2			—		—		2
Net (charge-offs) recoveries	(11		)	—			—			—			(1		)	2			—		—		(10		)
Provision	7			(3		)	(1		)	(1		)	—			(4		)	—		1		(1		)
Ending balance	$	77		$	72		$	21		$	4		$	20		$	14		$	—	$	33	$	241

BNY Mellon 69

Notes to Consolidated Financial Statements (continued)

Nonperforming assets

The table below presents our nonperforming assets. 

Nonperforming assets	June 30, 2020						Dec. 31, 2019
	Recorded investment
	With an allowance		Without an allowance
(in millions)					Total
Nonperforming loans:
Other residential mortgages	$	58	$	—	$	58	$	62
Wealth management loans and mortgages	10		18		28		24
Total nonperforming loans	68		18		86		86
Other assets owned	—		2		2		3
Total nonperforming assets	$	68	$	20	$	88	$	89

At June 30, 2020, undrawn commitments to borrowers whose loans were classified as nonaccrual or reduced rate were not material.

Past due loans

The table below presents our past due loans. 

Past due loans and still accruing interest	June 30, 2020								Dec. 31, 2019
	Days past due						Total past due		Days past due						Total past due
(in millions)	30-59		60-89		≥90				30-59		60-89		≥90
Wealth management loans and mortgages	$	31	$	6	$	—	$	37	$	22	$	5	$	—	$	27
Other residential mortgages	5		1		—		6		8		3		—		11
Financial institutions	—		—		—		—		1		30		—		31
Commercial real estate	—		—		—		—		6		12		—		18
Total past due loans	$	36	$	7	$	—	$	43	$	37	$	50	$	—	$	87

 

Loan modifications

Due to the coronavirus pandemic, there have been two forms of relief provided for classifying loans as TDRs: The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and the Interagency Guidance. See Note 2 for additional details on the CARES Act and Interagency Guidance. Financial institutions may account for eligible loan modifications either under the CARES Act or the Interagency Guidance. The Company has elected to apply both the CARES Act and the Interagency Guidance, as applicable, in providing borrowers with loan modification relief in response to the coronavirus pandemic. We modified loans totaling $282 million in the second quarter of 2020 by providing short-term loan payment forbearances or modified principal and/or interest payments. We did

not identify these modifications as troubled debt restructurings (“TDRs”). These loans were primarily residential mortgage and commercial real estate loans. During the loan modification period, these loans are not reported as nonperforming or past due. We modified other residential mortgage loans totaling $1 million in both the second quarter of 2019 and first quarter of 2020.

Credit quality indicators

Our credit strategy is to focus on investment-grade clients that are active users of our non-credit services. Each customer is assigned an internal credit rating, which is mapped to an external rating agency grade equivalent, if possible, based upon a number of dimensions, which are continually evaluated and may change over time.

70 BNY Mellon

Notes to Consolidated Financial Statements (continued)

The table below provides information about the credit profile of the loan portfolio by the period of origination.

Credit profile of the loan portfolio													June 30, 2020
													Revolving loans
	Originated, at amortized cost												Amortized cost		Converted to term loans - Amortized cost				Accrued interest receivable
(in millions)	YTD20		2019		2018		2017		2016		Prior to 2016						Total (a)
Commercial:
Investment grade	$	107	$	213	$	106	$	554	$	57	$	—	$	1,054	$	—	$	2,091
Non-investment grade	40		69		12		—		3		—		230		—		354
Total commercial	147		282		118		554		60		—		1,284		—		2,445		$	3
Commercial real estate:
Investment grade	500		1,212		806		550		431		422		292		—		4,213
Non-investment grade	77		410		459		179		421		212		228		29		2,015
Total commercial real estate	577		1,622		1,265		729		852		634		520		29		6,228		8
Financial institutions:
Investment grade	27		247		133		125		14		181		7,934		—		8,661
Non-investment grade	53		29		—		—		—		—		2,010		—		2,092
Total financial institutions	80		276		133		125		14		181		9,944		—		10,753		25
Wealth management loans and mortgages:
Investment grade	34		81		12		171		56		85		6,877		—		7,316
Non-investment grade	—		—		—		—		—		35		79		—		114
Wealth management mortgages	491		1,126		719		1,360		1,736		2,976		37		—		8,445
Total wealth management loans and mortgages	525		1,207		731		1,531		1,792		3,096		6,993		—		15,875		27
Lease financings	45		20		20		12		29		902		—		—		1,028		—
Other residential mortgages	—		—		—		—		—		450		—		—		450		2
Other loans	—		—		—		—		—		—		1,530		—		1,530		1
Margin loans	2,552		1,000		—		—		—		—		9,357		—		12,909		11
Total loans	$	3,926	$	4,407	$	2,267	$	2,951	$	2,747	$	5,263	$	29,628	$	29	$	51,218	$	77

(a) Excludes overdrafts of $4,179 million. Overdrafts occur on a daily basis primarily in the custody and securities clearance business and are generally repaid within two business days.

Commercial loans

The commercial loan portfolio is divided into investment grade and non-investment grade categories based on the assigned internal credit ratings, which are generally consistent with those of the public rating agencies. Customers with ratings consistent with BBB- (S&P)/Baa3 (Moody’s) or better are considered to be investment grade. Those clients with ratings lower than this threshold are considered to be non-investment grade.

Commercial real estate

Our income-producing commercial real estate facilities are focused on experienced owners and are structured with moderate leverage based on existing cash flows. Our commercial real estate lending activities also include construction and renovation facilities.

Financial institutions

Financial institution exposures are high quality, with 95% of the exposures meeting the investment grade equivalent criteria of our internal credit rating classification at June 30, 2020. In addition, 75% of the financial institutions exposure is secured. For example, securities industry clients and asset managers often borrow against marketable securities held in custody. The exposure to financial institutions is generally short-term with 90% expiring within one year.

Wealth management loans and mortgages

Wealth management non-mortgage loans are not typically rated by external rating agencies. A majority of the wealth management loans are secured by the customers’ investment management accounts or custody accounts. Eligible assets pledged for these loans are typically investment grade fixed-income securities, equities and/or mutual funds. Internal ratings for this portion of the wealth management

BNY Mellon 71

Notes to Consolidated Financial Statements (continued)

portfolio, therefore, would equate to investment grade external ratings. Wealth management loans are provided to select customers based on the pledge of other types of assets, including business assets, fixed assets or a modest amount of commercial real estate. For the loans collateralized by other assets, the credit quality of the obligor is carefully analyzed, but we do not consider this portfolio of loans to be investment grade.

Credit quality indicators for wealth management mortgages are not correlated to external ratings. Wealth management mortgages are typically loans to high-net-worth individuals, which are secured primarily by residential property. These loans are primarily interest-only, adjustable rate mortgages with a weighted-average loan-to-value ratio of 62% at origination. Delinquency rate is a key indicator of credit quality in the wealth management portfolio. At June 30, 2020, less than 1% of the mortgages were past due.

At June 30, 2020, the wealth management mortgage portfolio consisted of the following geographic concentrations: California - 23%; New York - 17%; Massachusetts - 10%; Florida - 8%; and other - 42%.

Lease financing

At June 30, 2020, the lease financings portfolio consisted of exposures backed by well-diversified assets, primarily large-ticket transportation equipment and real estate. The largest component of our lease residual value exposure is freight-related rail. Assets are both domestic and foreign-based, with primary concentrations in the U.S. and Germany.

Other residential mortgages

The other residential mortgage portfolio primarily consists of 1-4 family residential mortgage loans and totaled $450 million at June 30, 2020 and $494 million at Dec. 31, 2019. These loans are not

typically correlated to external ratings. Included in this portfolio at June 30, 2020 were $81 million of mortgage loans purchased in 2005, 2006 and the first quarter of 2007, of which 25% of the serviced loan balance was at least 60 days delinquent.

Overdrafts

Overdrafts primarily relate to custody and securities clearance clients and totaled $4.2 billion at June 30, 2020 and $2.7 billion at Dec. 31, 2019. Overdrafts occur on a daily basis and are generally repaid within two business days.

Other loans

Other loans primarily include loans to consumers that are fully collateralized with equities, mutual funds and fixed-income securities.

Margin loans

We had $12.9 billion of secured margin loans at June 30, 2020, compared with $13.4 billion at Dec. 31, 2019. Margin loans are collateralized with marketable securities, and borrowers are required to maintain a daily collateral margin in excess of 100% of the value of the loan. We have rarely suffered a loss on these types of loans.

Reverse repurchase agreements

Reverse repurchase agreements at June 30, 2020 were fully secured with high quality collateral. As a result, there was no allowance for credit losses related to these assets at June 30, 2020. This compares to an $18 million allowance at March 31, 2020.  The decrease is driven by a reduction in exposure and improvement in collateral liquidity and values related to reverse repurchase agreements collateralized by non-agency debt securities.

72 BNY Mellon

Notes to Consolidated Financial Statements (continued)

Note 6–Goodwill and intangible assets

Goodwill

The tables below provide a breakdown of goodwill by business.

Goodwill by business (in millions)	Investment Services			Investment and Wealth Management			Other			Consolidated
Balance at Dec. 31, 2019	$	8,332		$	9,007		$	47		$	17,386
Foreign currency translation	(24		)	(109		)	—			(133		)
Other (a)	47			—			(47		)	—
Balance at June 30, 2020	$	8,355		$	8,898		$	—		$	17,253

(a) Reflects the transfer of goodwill associated with the Capital Markets business.

Goodwill by business (in millions)	Investment Services			Investment and Wealth Management			Other		Consolidated
Balance at Dec. 31, 2018	$	8,333		$	8,970		$	47	$	17,350
Foreign currency translation	(6		)	(7		)	—		(13		)
Balance at June 30, 2019	$	8,327		$	8,963		$	47	$	17,337

Intangible assets

The tables below provide a breakdown of intangible assets by business.

Intangible assets – net carrying amount by business (in millions)	Investment Services			Investment and Wealth Management			Other		Consolidated
Balance at Dec. 31, 2019	$	678		$	1,580		$	849	$	3,107
Amortization	(36		)	(16		)	—		(52		)
Foreign currency translation	—			(10		)	—		(10		)
Balance at June 30, 2020	$	642		$	1,554		$	849	$	3,045

Intangible assets – net carrying amount by business (in millions)	Investment Services			Investment and Wealth Management			Other		Consolidated
Balance at Dec. 31, 2018	$	758		$	1,613		$	849	$	3,220
Amortization	(41		)	(18		)	—		(59		)
Foreign currency translation	—			(1		)	—		(1		)
Balance at June 30, 2019	$	717		$	1,594		$	849	$	3,160

BNY Mellon 73

Notes to Consolidated Financial Statements (continued)

The table below provides a breakdown of intangible assets by type.

Intangible assets	June 30, 2020								Dec. 31, 2019
(in millions)	Gross carrying amount		Accumulated amortization			Net carrying amount		Remaining weighted- average amortization period	Gross carrying amount		Accumulated amortization			Net carrying amount
Subject to amortization: (a)
Customer contracts—Investment Services	$	1,514	$	(1,244	)	$	270	10 years	$	1,520	$	(1,214	)	$	306
Customer relationships—Investment and Wealth Management	709		(554		)	155		10 years	712		(544		)	168
Other	64		(19		)	45		14 years	64		(16		)	48
Total subject to amortization	2,287		(1,817		)	470		10 years	2,296		(1,774		)	522
Not subject to amortization: (b)
Tradenames	1,291		N/A			1,291		N/A	1,293		N/A			1,293
Customer relationships	1,284		N/A			1,284		N/A	1,292		N/A			1,292
Total not subject to amortization	2,575		N/A			2,575		N/A	2,585		N/A			2,585
Total intangible assets	$	4,862	$	(1,817	)	$	3,045	N/A	$	4,881	$	(1,774	)	$	3,107

(a) Excludes fully amortized intangible assets.

(b) Intangible assets not subject to amortization have an indefinite life.

Estimated annual amortization expense for current intangibles for the next five years is as follows:

For the year ended Dec. 31,	Estimated amortization expense (in millions)
2020		$	104
2021		81
2022		63
2023		52
2024		45

Impairment testing

The goodwill impairment test is performed at least annually at the reporting unit level. Intangible assets not subject to amortization are tested for impairment annually or more often if events or circumstances indicate they may be impaired.

BNY Mellon’s three business segments include six reporting units for which goodwill impairment testing is performed on an annual basis. The Investment Services segment is comprised of four reporting units and the Investment and Wealth Management segment is comprised of two reporting units. As a result of the annual goodwill impairment test of the six reporting units conducted in the second quarter of 2020, no goodwill impairment was recognized.

Note 7–Other assets

The following table provides the components of other assets presented on the consolidated balance sheet.

Other assets	June 30, 2020		Dec. 31, 2019
(in millions)
Corporate/bank-owned life insurance	$	5,245	$	5,219
Accounts receivable	3,404		3,802
Fails to deliver	3,201		1,671
Software	1,778		1,590
Prepaid pension assets	1,545		1,464
Equity in a joint venture and other investments	1,146		1,102
Renewable energy investments	1,083		1,144
Qualified affordable housing project investments	962		1,024
Prepaid expense	544		491
Federal Reserve Bank stock	477		466
Income taxes receivable	194		388
Seed capital	149		184
Fair value of hedging derivatives	137		21
Other (a)	1,441		1,655
Total other assets	$	21,306	$	20,221

(a) At June 30, 2020 and Dec. 31, 2019, other assets include $7 million and $22 million, respectively, of Federal Home Loan Bank stock, at cost.

74 BNY Mellon

Notes to Consolidated Financial Statements (continued)

Non-readily marketable equity securities

Non-readily marketable equity securities do not have readily determinable fair values. These investments are valued using a measurement alternative where the investments are carried at cost, less any impairment, and plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. The observable price changes are recorded in investment and other income on the consolidated income statement. Our non-readily marketable equity securities totaled $106 million at June 30, 2020 and $61 million at Dec. 31, 2019 and are included in equity in a joint venture and other investments in the table above.

The following table presents the adjustments on the non-readily marketable equity securities.

Adjustments on non-readily marketable equity securities													Life-to-date
(in millions)	2Q20		1Q20		2Q19			YTD20		YTD19
Upward adjustments	$	2	$	4	$	2		$	6	$	2		$	38
Downward adjustments	—		—		(1		)	—		(1		)	(4		)
Net adjustments	$	2	$	4	$	1		$	6	$	1		$	34

Qualified affordable housing project investments

We invest in affordable housing projects primarily to satisfy the Company’s requirements under the Community Reinvestment Act. Our total investment in qualified affordable housing projects totaled $1.0 billion at both June 30, 2020 and Dec. 31, 2019. Commitments to fund future investments in qualified

affordable housing projects totaled $363 million at June 30, 2020 and $422 million at Dec. 31, 2019 and are recorded in other liabilities. A summary of the commitments to fund future investments is as follows: 2020 – $72 million; 2021 – $179 million; 2022 – $82 million; 2023 – $5 million; 2024 – $1 million; and 2025 and thereafter – $24 million.

Tax credits and other tax benefits recognized were $38 million in the second quarter of 2020, $38 million in the first quarter of 2020 and $39 million in the second quarter of 2019, $76 million in the first six months of 2020 and $78 million in the first six months of 2019.

Amortization expense included in the provision for income taxes was $31 million in the second quarter of 2020, $31 million in the first quarter of 2020 and $32 million in the second quarter of 2019, $62 million in the first six months of 2020 and $64 million in the first six months of 2019.

Investments valued using net asset value (“NAV”) per share

In our Investment and Wealth Management business, we make seed capital investments in certain funds we manage. We also hold private equity investments, specifically small business investment companies (“SBICs”), which are compliant with the Volcker Rule, and certain other corporate investments. Seed capital, private equity and other corporate investments are included in other assets on the consolidated balance sheet. The fair value of certain of these investments was estimated using the NAV per share for our ownership interest in the funds.

The table below presents information on our investments valued using NAV.

Investments valued using NAV	June 30, 2020					Dec. 31, 2019
(in millions)	Fair value		Unfunded  commitments			Fair value		Unfunded commitments
Seed capital (a)	$	56		$	12	$	59		$	—
Private equity investments (SBICs) (b)	91			58		89			55
Other (c)	40			—		33			—
Total	$	187		$	70	$	181		$	55

(a) Primarily includes leveraged loans and structured credit funds, which are generally not redeemable. Distributions from such investments will be received as the underlying investments in the funds, which have lives of six to 11 years at June 30, 2020 and lives of six years at Dec. 31, 2019, are liquidated.

(b) Private equity investments include Volcker Rule-compliant investments in SBICs that invest in various sectors of the economy. Private equity investments do not have redemption rights. Distributions from such investments will be received as the underlying investments in the private equity investments, which have a life of 10 years, are liquidated.

(c) Primarily includes investments in funds that relate to deferred compensation arrangements with employees. Investments in funds can be redeemed on a monthly to quarterly basis with redemption notice periods of up to 95 days.

BNY Mellon 75

Notes to Consolidated Financial Statements (continued)

Note 8–Contract revenue

Fee revenue in Investment Services and Investment and Wealth Management is primarily variable, based on levels of assets under custody and/or administration, assets under management and the level of client-driven transactions, as specified in fee schedules. See Note 10 of the Notes to Consolidated Financial Statements in our 2019 Annual Report for information on the nature of our services and revenue recognition. See Note 24 of the Notes to Consolidated Financial Statements in our 2019 Annual Report for additional information on our principal businesses, Investment

Services and Investment and Wealth Management, and the primary services provided.

Disaggregation of contract revenue

Contract revenue is included in fee revenue on the consolidated income statement. The following table presents fee revenue related to contracts with customers, disaggregated by type of fee revenue, for each business segment. Business segment data has been determined on an internal management basis of accounting, rather than the generally accepted accounting principles used for consolidated financial reporting.

Disaggregation of contract revenue by business segment
	Quarter ended
	June 30, 2020											March 31, 2020											June 30, 2019 (a)
(in millions)	IS			IWM			Other			Total		IS			IWM			Other			Total		IS			IWM			Other			Total
Fee revenue - contract revenue:
Investment services fees:
Asset servicing fees	$	1,147		$	25		$	(15	)	$	1,157	$	1,127		$	23		$	(11	)	$	1,139	$	1,095		$	20		$	(6	)	$	1,109
Clearing services fees	431			—			—			431		470			—			—			470		411			—			(1		)	410
Issuer services fees	277			—			—			277		263			—			—			263		291			—			—			291
Treasury services fees	144			—			1			145		149			—			—			149		140			1			—			141
Total investment services fees	1,999			25			(14		)	2,010		2,009			23			(11		)	2,021		1,937			21			(7		)	1,951
Investment management and performance fees	4			792			(5		)	791		5			862			(4		)	863		4			833			(4		)	833
Financing-related fees	23			1			—			24		28			—			—			28		16			—			1			17
Distribution and servicing	(7		)	34			—			27		(12		)	43			—			31		(13		)	44			—			31
Investment and other income	62			(41		)	3			24		72			(50		)	—			22		69			(48		)	—			21
Total fee revenue - contract revenue	2,081			811			(16		)	2,876		2,102			878			(15		)	2,965		2,013			850			(10		)	2,853
Fee and other revenue - not in scope of Accounting Standards Codification (“ASC”) 606 (b)(c)	258			27			54			339		334			(32		)	45			347		220			4			41			265
Total fee and other revenue	$	2,339		$	838		$	38		$	3,215	$	2,436		$	846		$	30		$	3,312	$	2,233		$	854		$	31		$	3,118

(a) Restated to reflect the first quarter 2020 business segment reclassifications. There was no impact on total revenue, by type or in aggregate.

(b) Primarily includes foreign exchange and other trading revenue, investment and other income (loss), financing-related fees, asset servicing fees, net securities gains (losses), all of which are accounted for using other accounting guidance.

(c) The Investment and Wealth Management business includes income (loss) from consolidated investment management funds, net of noncontrolling interests, of $39 million in the second quarter of 2020, $(20) million in the first quarter of 2020 and $6 million in the second quarter of 2019.

IS - Investment Services segment.

IWM - Investment and Wealth Management segment.

76 BNY Mellon

Notes to Consolidated Financial Statements (continued)

Disaggregation of contract revenue by business segment	Year-to-date
	June 30, 2020											June 30, 2019 (a)
(in millions)	IS			IWM			Other			Total		IS			IWM			Other			Total
Fee revenue - contract revenue:
Investment services fees:
Asset servicing fees	$	2,274		$	48		$	(26	)	$	2,296	$	2,176		$	40		$	(14	)	$	2,202
Clearing services fees	901			—			—			901		809			—			(1		)	808
Issuer services fees	540			—			—			540		542			—			—			542
Treasury services fees	293			—			1			294		272			1			—			273
Total investment services fees	4,008			48			(25		)	4,031		3,799			41			(15		)	3,825
Investment management and performance fees	9			1,654			(9		)	1,654		8			1,674			(8		)	1,674
Financing-related fees	51			1			—			52		33			—			1			34
Distribution and servicing	(19		)	77			—			58		(27		)	89			—			62
Investment and other income	134			(91		)	3			46		138			(97		)	—			41
Total fee revenue - contract revenue	4,183			1,689			(31		)	5,841		3,951			1,707			(22		)	5,636
Fee and other revenue - not in scope of ASC 606 (b)(c)	592			(5		)	99			686		443			16			71			530
Total fee and other revenue	$	4,775		$	1,684		$	68		$	6,527	$	4,394		$	1,723		$	49		$	6,166

(a) Restated to reflect the first quarter 2020 business segment reclassifications. There was no impact on total revenue, by type or in aggregate.

(b) Primarily includes foreign exchange and other trading revenue, investment and other income (loss), financing-related fees, asset servicing fees, net securities gains (losses), all of which are accounted for using other accounting guidance.

(c) The Investment and Wealth Management business includes income from consolidated investment management funds, net of noncontrolling interests, of $19 million in the first six months of 2020 and $22 million in the first six months of 2019.

IS - Investment Services segment.

IWM - Investment and Wealth Management segment.

Contract balances

Our clients are billed based on fee schedules that are agreed upon in each customer contract. Receivables from customers were $2.4 billion at both June 30, 2020 and Dec. 31, 2019.

Contract assets represent accrued revenues that have not yet been billed to the customers due to certain contractual terms other than the passage of time and were $69 million at June 30, 2020 and $32 million at Dec. 31, 2019. Accrued revenues recorded as contract assets are usually billed on an annual basis.

Both receivables from customers and contract assets are included in other assets on the consolidated balance sheet.

Contract liabilities represent payments received in advance of providing services under certain contracts and were $195 million at June 30, 2020 and $168 million at Dec. 31, 2019. Contract liabilities are included in other liabilities on the consolidated balance sheet. Revenue recognized in the second quarter of 2020 relating to contract liabilities as of March 31, 2020 was $58 million. Revenue recognized in the first six months of 2020 relating to contract liabilities as of Dec. 31, 2019 was $78 million.

Changes in contract assets and liabilities primarily relate to either party’s performance under the contracts.

Contract costs

Incremental costs for obtaining contracts that are deemed recoverable are capitalized as contract costs. Such costs result from the payment of sales incentives, primarily in the Wealth Management business, and totaled $80 million at June 30, 2020 and $86 million at Dec. 31, 2019. Capitalized sales incentives are amortized based on the transfer of goods or services to which the assets relate and typically average nine years. The amortization of capitalized sales incentives, which is primarily included in staff expense on the consolidated income statement, totaled $5 million in the second quarter of 2020, second quarter of 2019 and first quarter of 2020 and $10 million in both the first six months of 2020 and first six months of 2019.

Costs to fulfill a contract are capitalized when they relate directly to an existing contract or a specific anticipated contract, generate or enhance resources that will be used to fulfill performance obligations, and are recoverable. Such costs generally represent set-up costs, which include any direct cost incurred at the inception of a contract which enables the fulfillment of the performance obligation, and totaled

BNY Mellon 77

Notes to Consolidated Financial Statements (continued)

$14 million at June 30, 2020 and $16 million at Dec. 31, 2019. These capitalized costs are amortized on a straight-line basis over the expected contract period, which generally ranges from seven to nine years. The amortization is included in other expense on the consolidated income statement and totaled $2 million in the second quarter of 2020 and second quarter of 2019, $1 million in the first quarter of 2020 and $3 million in the first six months of 2020 and first six months of 2019. There were no impairments recorded on capitalized contract costs in the first six months of 2020.

Unsatisfied performance obligations

We do not have any unsatisfied performance obligations other than those that are subject to a practical expedient election under ASC 606, Revenue From Contracts With Customers. The practical expedient election applies to (i) contracts with an original expected length of one year or less, and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

Note 9–Net interest revenue

The following table provides the components of net interest revenue presented on the consolidated income statement.

Net interest revenue	Quarter ended								Year-to-date
(in millions)	June 30, 2020			March 31, 2020		June 30, 2019			June 30, 2020		June 30, 2019
Interest revenue
Deposits with the Federal Reserve and other central banks	$	(7	)	$	80	$	113		$	73	$	252
Deposits with banks	40			58		64			98		127
Federal funds sold and securities purchased under resale agreements	61			396		568			457		1,042
Margin loans	40			87		119			127		254
Non-margin loans	230			309		365			539		720
Securities:
Taxable	556			594		687			1,150		1,393
Exempt from federal income taxes	6			6		10			12		22
Total securities	562			600		697			1,162		1,415
Trading securities	17			40		39			57		75
Total interest revenue	943			1,570		1,965			2,513		3,885
Interest expense
Deposits	(17		)	240		432			223		823
Federal funds purchased and securities sold under repurchase agreements	1			275		372			276		703
Trading liabilities	2			7		11			9		18
Other borrowed funds	7			4		20			11		44
Commercial paper	1			6		18			7		26
Customer payables	(1		)	30		69			29		139
Long-term debt	170			194		241			364		489
Total interest expense	163			756		1,163			919		2,242
Net interest revenue	780			814		802			1,594		1,643
Provision for credit losses	143			169		(8		)	312		(1		)
Net interest revenue after provision for credit losses	$	637		$	645	$	810		$	1,282	$	1,644

78 BNY Mellon

Notes to Consolidated Financial Statements (continued)

Note 10–Employee benefit plans

The components of net periodic benefit (credit) cost are presented below. The service cost component is reflected in staff expense, whereas the remaining components are reflected in other expense.

Net periodic benefit (credit) cost	Quarter ended
	June 30, 2020									March 31, 2020									June 30, 2019
(in millions)	Domestic pension benefits			Foreign pension benefits			Health care benefits			Domestic pension benefits			Foreign pension benefits			Health care benefits			Domestic pension benefits			Foreign pension benefits			Health care benefits
Service cost	$	—		$	3		$	—		$	—		$	3		$	—		$	—		$	3		$	—
Interest cost	39			6			1			39			7			1			45			8			1
Expected return on assets	(79		)	(9		)	(2		)	(80		)	(10		)	(1		)	(84		)	(12		)	(2		)
Other	21			3			—			22			3			(1		)	13			1			—
Net periodic benefit (credit) cost	$	(19	)	$	3		$	(1	)	$	(19	)	$	3		$	(1	)	$	(26	)	$	—		$	(1	)

Net periodic benefit (credit) cost	Year-to-date
	June 30, 2020									June 30, 2019
(in millions)	Domestic pension benefits			Foreign pension benefits			Health care benefits			Domestic pension benefits			Foreign pension benefits			Health care benefits
Service cost	$	—		$	6		$	—		$	—		$	6		$	—
Interest cost	78			13			2			89			16			3
Expected return on assets	(159		)	(19		)	(3		)	(168		)	(23		)	(4		)
Other	43			6			(1		)	26			1			(1		)
Net periodic benefit (credit) cost	$	(38	)	$	6		$	(2	)	$	(53	)	$	—		$	(2	)

Note 11–Income taxes

BNY Mellon recorded an income tax provision of $216 million (18.3% effective tax rate) in the second quarter of 2020, $264 million (20.5% effective tax rate) in the second quarter of 2019 and $265 million (21.6% effective tax rate) in the first quarter of 2020.

Our total tax reserves as of June 30, 2020 were $178 million compared with $173 million at Dec. 31, 2019. If these tax reserves were unnecessary, $178 million would affect the effective tax rate in future periods. We recognize accrued interest and penalties, if applicable, related to income taxes in income tax expense. Included in the balance sheet at June 30, 2020 is accrued interest, where applicable, of

$34 million. The additional tax expense related to interest for the six months ended June 30, 2020 was $3 million, compared with $6 million for the six months ended June 30, 2019.

It is reasonably possible the total reserve for uncertain tax positions could decrease within the next 12 months by approximately $100 million as a result of adjustments related to tax years that are still subject to examination.

Our federal income tax returns are closed to examination through 2016. Our New York State, New York City and UK income tax returns are closed to examination through 2012.

BNY Mellon 79

Notes to Consolidated Financial Statements (continued)

Note 12–Variable interest entities and securitization

We have variable interests in variable interest entities (“VIEs”), which include investments in retail, institutional and alternative investment funds, including CLO structures in which we provide asset management services, some of which are consolidated.

We earn management fees from these funds as well as performance fees in certain funds and may also provide start-up capital for new funds. The funds are primarily financed by our customers’ investments in the funds’ equity or debt.

Additionally, we invest in qualified affordable housing and renewable energy projects, which are designed to generate a return primarily through the realization of tax credits. The projects, which are structured as limited partnerships and limited liability companies, are also VIEs, but are not consolidated.

The following table presents the incremental assets and liabilities included in the consolidated balance sheet as of June 30, 2020 and Dec. 31, 2019. The net assets of any consolidated VIE are solely available to settle the liabilities of the VIE and to settle any investors’ ownership liquidation requests, including any seed capital we invested in the VIE.

Consolidated investments	June 30, 2020							Dec. 31, 2019
(in millions)	Investment Management funds			Securitization		Total consolidated investments		Investment Management funds			Securitization		Total consolidated investments
Trading assets	$	450		$	400	$	850	$	229		$	400	$	629
Other assets	10			—		10		16			—		16
Total assets	$	460	(a)	$	400	$	860	$	245	(b)	$	400	$	645
Other liabilities	$	4		$	399	$	403	$	1		$	387	$	388
Total liabilities	$	4	(a)	$	399	$	403	$	1	(b)	$	387	$	388
Nonredeemable noncontrolling interests	$	112	(a)	$	—	$	112	$	102	(b)	$	—	$	102

 

(a) Includes voting model entities (“VMEs”) with assets of $283 million, liabilities of $1 million and nonredeemable noncontrolling interests of $37 million.

(b) Includes VMEs with assets of $50 million, liabilities of $1 million and nonredeemable noncontrolling interests of $1 million.

We have not provided financial or other support that was not otherwise contractually required to be provided to our VIEs. Additionally, creditors of any consolidated VIEs do not have any recourse to the general credit of BNY Mellon.

Non-consolidated VIEs

As of June 30, 2020 and Dec. 31, 2019, the following assets and liabilities related to the VIEs where we are

not the primary beneficiary were included in our consolidated balance sheets and primarily related to accounting for our investments in qualified affordable housing and renewable energy projects.

The maximum loss exposure indicated in the table below relates solely to our investments in, and unfunded commitments to, the VIEs.

Non-consolidated VIEs	June 30, 2020						Dec. 31, 2019
(in millions)	Assets		Liabilities		Maximum loss exposure		Assets		Liabilities		Maximum loss exposure
Securities - Available-for-sale (a)	$	199	$	—	$	199	$	208	$	—	$	208
Other	2,237		363		2,609		2,400		422		2,822

(a) Includes investments in the Company’s sponsored CLOs.

80 BNY Mellon

Notes to Consolidated Financial Statements (continued)

Note 13–Preferred stock

The Parent has 100 million authorized shares of preferred stock with a par value of $0.01 per share. The following table summarizes the Parent’s preferred stock issued and outstanding at June 30, 2020 and Dec. 31, 2019.

Preferred stock summary (a)		Total shares issued and outstanding		Carrying value (b)
				(in millions)
		June 30, 2020	Dec. 31, 2019	June 30, 2020		Dec. 31, 2019
	Per annum dividend rate
Series A	Greater of (i) three-month LIBOR plus 0.565% for the related distribution period; or (ii) 4.000%	5,001	5,001	$	500	$	500
Series C	5.2%	5,825	5,825	568		568
Series D	4.50% to but excluding June 20, 2023, then a floating rate equal to the three-month LIBOR plus 2.46%	5,000	5,000	494		494
Series E	4.95% to but excluding June 20, 2020, then a floating rate equal to the three-month LIBOR plus 3.42%	10,000	10,000	990		990
Series F	4.625% to but excluding Sept. 20, 2026, then a floating rate equal to the three-month LIBOR plus 3.131%	10,000	10,000	990		990
Series G	4.70% to but excluding Sept. 20, 2025, then a floating rate equal to the five-year treasury rate plus 4.358%	10,000	—	990		—
Total		45,826	35,826	$	4,532	$	3,542

(a) All outstanding preferred stock is noncumulative perpetual preferred stock with a liquidation preference of $100,000 per share.

(b) The carrying value of the Series C, Series D, Series E, Series F and Series G preferred stock is recorded net of issuance costs.

In May 2020, the Parent issued 1,000,000 depositary shares, each representing a 1/100th interest in a share of the Parent’s Series G Noncumulative Perpetual Preferred Stock (the “Series G Preferred Stock”). The Parent will pay dividends on the Series G Preferred Stock, if declared by its board of directors on each March 20 and September 20, at an annual rate of 4.70%, from the original issue date to but

excluding Sept. 20, 2025; and at a floating rate equal to the five-year treasury rate on the date that is three business days prior to the reset date plus 4.358% for each reset period, from and including Sept. 20, 2025. The floating rate will initially reset on Sept. 20, 2025 and subsequently on each date falling on the fifth anniversary of the preceding reset date.

The table below presents the dividends paid on the Parent’s preferred stock.

Preferred dividends paid
(dollars in millions, except per share amounts)	Depositary shares per share		2Q20				1Q20				2Q19				YTD20				YTD19
			Per share		Total dividend		Per share		Total dividend		Per share		Total dividend		Per share		Total dividend		Per share		Total dividend
Series A	100	(a)	$	1,022.22	$	5	$	1,011.11	$	5	$	1,022.22	$	5	$	2,033.33	$	10	$	2,022.22	$	10
Series C	4,000		1,300.00		8		1,300.00		8		1,300.00		7		2,600.00		16		2,600.00		15
Series D	100		2,250.00		11		N/A		—		2,250.00		11		2,250.00		11		2,250.00		11
Series E	100		2,475.00		25		N/A		—		2,475.00		25		2,475.00		25		2,475.00		25
Series F	100		N/A		—		2,312.50		23		N/A		—		2,312.50		23		2,312.50		23
Total					$	49			$	36			$	48			$	85			$	84

(a) Represents Normal Preferred Capital Securities.

N/A - Not applicable.

For additional information on the preferred stock, see Note 15 of the Notes to Consolidated Financial Statements in our 2019 Annual Report.

BNY Mellon 81

Notes to Consolidated Financial Statements (continued)

Note 14–Other comprehensive income (loss)

Components of other comprehensive income (loss)	Quarter ended
	June 30, 2020									March 31, 2020									June 30, 2019
(in millions)	Pre-tax amount			Tax (expense) benefit			After-tax amount			Pre-tax amount			Tax (expense) benefit			After-tax amount			Pre-tax amount			Tax (expense) benefit			After-tax amount
Foreign currency translation:
Foreign currency translation adjustments arising during the period (a)	$	104		$	11		$	115		$	(265	)	$	(104	)	$	(369	)	$	29		$	(19	)	$	10
Total foreign currency translation	104			11			115			(265		)	(104		)	(369		)	29			(19		)	10
Unrealized gain (loss) on assets available-for-sale:
Unrealized gain (loss) arising during period	989			(236		)	753			243			(60		)	183			384			(97		)	287
Reclassification adjustment (b)	(9		)	2			(7		)	(9		)	2			(7		)	(7		)	2			(5		)
Net unrealized gain (loss) on assets available-for-sale	980			(234		)	746			234			(58		)	176			377			(95		)	282
Defined benefit plans:
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost (b)	24			(5		)	19			24			(6		)	18			12			(2		)	10
Total defined benefit plans	24			(5		)	19			24			(6		)	18			12			(2		)	10
Unrealized gain (loss) on cash flow hedges:
Unrealized hedge gain (loss) arising during period	3			(1		)	2			(13		)	3			(10		)	2			(2		)	—
Reclassification of net (gain) loss to net income:
Foreign exchange (“FX”) contracts - staff expense	3			(1		)	2			(1		)	—			(1		)	—			—			—
Total reclassifications to net income	3			(1		)	2			(1		)	—			(1		)	—			—			—
Net unrealized gain (loss) on cash flow hedges	6			(2		)	4			(14		)	3			(11		)	2			(2		)	—
Total other comprehensive income (loss)	$	1,114		$	(230	)	$	884		$	(21	)	$	(165	)	$	(186	)	$	420		$	(118	)	$	302

(a) Includes the impact of hedges of net investments in foreign subsidiaries. See Note 17 for additional information.

(b) The reclassification adjustment related to the unrealized gain (loss) on assets available-for-sale is recorded as net securities gains on the consolidated income statement. The amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost is recorded as staff expense on the consolidated income statement.

Components of other comprehensive income (loss)	Year-to-date
	June 30, 2020									June 30, 2019
(in millions)	Pre-tax amount			Tax (expense) benefit			After-tax amount			Pre-tax amount			Tax (expense) benefit			After-tax amount
Foreign currency translation:
Foreign currency translation adjustments arising during the period (a)	$	(161	)	$	(93	)	$	(254	)	$	56		$	(17	)	$	39
Total foreign currency translation	(161		)	(93		)	(254		)	56			(17		)	39
Unrealized gain (loss) on assets available-for-sale:
Unrealized gain (loss) arising during period	1,232			(296		)	936			706			(180		)	526
Reclassification adjustment (b)	(18		)	4			(14		)	(8		)	2			(6		)
Net unrealized gain (loss) on assets available-for-sale	1,214			(292		)	922			698			(178		)	520
Defined benefit plans:
Net gain (loss) arising during the period	—			—			—			(11		)	2			(9		)
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost (b)	48			(11		)	37			25			(5		)	20
Total defined benefit plans	48			(11		)	37			14			(3		)	11
Unrealized (loss) gain on cash flow hedges:
Unrealized hedge (loss) gain arising during period	(10		)	2			(8		)	8			(6		)	2
Reclassification of net loss (gain) to net income:
FX contracts - staff expense	2			(1		)	1			1			2			3
Total reclassifications to net income	2			(1		)	1			1			2			3
Net unrealized (loss) gain on cash flow hedges	(8		)	1			(7		)	9			(4		)	5
Total other comprehensive income (loss)	$	1,093		$	(395	)	$	698		$	777		$	(202	)	$	575

(a) Includes the impact of hedges of net investments in foreign subsidiaries. See Note 17 for additional information.

(b) The reclassification adjustment related to the unrealized gain (loss) on assets available-for-sale is recorded as net securities gains on the consolidated income statement. The amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost is recorded as staff expense on the consolidated income statement.

82 BNY Mellon

Notes to Consolidated Financial Statements (continued)

Note 15–Fair value measurement

Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. A three-level hierarchy for fair value measurements is utilized based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. BNY Mellon’s own creditworthiness is considered when valuing liabilities. See Note 20 of the Notes to Consolidated Financial Statements in our 2019 Annual Report for

information on how we determine fair value and the fair value hierarchy.

The following tables present the financial instruments carried at fair value at June 30, 2020 and Dec. 31, 2019, by caption on the consolidated balance sheet and by the three-level valuation hierarchy. We have included credit ratings information in certain of the tables because the information indicates the degree of credit risk to which we are exposed, and significant changes in ratings classifications could result in increased risk for us.

Assets measured at fair value on a recurring basis at June 30, 2020													Total carrying value
(dollars in millions)	Level 1			Level 2			Level 3			Netting (a)
Available-for-sale securities:
Agency RMBS	$	—		$	26,437		$	—		$	—		$	26,437
U.S. Treasury	25,137			—			—			—			25,137
Sovereign debt/sovereign guaranteed	8,570			7,317			—			—			15,887
Agency commercial MBS	—			9,988			—			—			9,988
Foreign covered bonds	—			5,519			—			—			5,519
Supranational	—			5,448			—			—			5,448
CLOs	—			4,432			—			—			4,432
Foreign government agencies	—			3,578			—			—			3,578
U.S. government agencies	—			2,806			—			—			2,806
Other ABS	—			2,743			—			—			2,743
Non-agency commercial MBS	—			2,630			—			—			2,630
Commercial paper/CDs	—			1,853			—			—			1,853
Non-agency RMBS (b)	—			1,598			—			—			1,598
State and political subdivisions	—			1,179			—			—			1,179
Corporate bonds	—			831			—			—			831
Other debt securities	—			1			—			—			1
Total available-for-sale securities	33,707			76,360			—			—			110,067
Trading assets:
Debt instruments	4,782			2,775			—			—			7,557
Equity instruments (c)	2,397			—			—			—			2,397
Derivative assets not designated as hedging:
Interest rate	5			5,496			—			(2,436		)	3,065
Foreign exchange	—			4,322			—			(3,204		)	1,118
Equity and other contracts	2			11			—			—			13
Total derivative assets not designated as hedging	7			9,829			—			(5,640		)	4,196
Total trading assets	7,186			12,604			—			(5,640		)	14,150
Other assets:
Derivative assets designated as hedging:
Foreign exchange	—			137			—			—			137
Total derivative assets designated as hedging	—			137			—			—			137
Other assets (d)	52			153			—			—			205
Assets measured at NAV (d)													187
Subtotal assets of operations at fair value	40,945			89,254			—			(5,640		)	124,746
Percentage of assets of operations prior to netting	31		%	69		%	—		%
Assets of consolidated investment management funds	416			44			—			—			460
Total assets	$	41,361		$	89,298		$	—		$	(5,640	)	$	125,206
Percentage of total assets prior to netting	32		%	68		%	—		%

BNY Mellon 83

Notes to Consolidated Financial Statements (continued)

Liabilities measured at fair value on a recurring basis at June 30, 2020													Total carrying value
(dollars in millions)	Level 1			Level 2			Level 3			Netting (a)
Trading liabilities:
Debt instruments	$	2,589		$	75		$	—		$	—		$	2,664
Equity instruments	20			—			—			—			20
Derivative liabilities not designated as hedging:
Interest rate	7			4,661			—			(2,680		)	1,988
Foreign exchange	—			4,036			—			(3,134		)	902
Equity and other contracts	1			23			—			(3		)	21
Total derivative liabilities not designated as hedging	8			8,720			—			(5,817		)	2,911
Total trading liabilities	2,617			8,795			—			(5,817		)	5,595
Long-term debt (c)	—			399			—			—			399
Other liabilities – derivative liabilities designated as hedging:
Interest rate	—			915			—			—			915
Foreign exchange	—			49			—			—			49
Total other liabilities – derivative liabilities designated as hedging	—			964			—			—			964
Subtotal liabilities of operations at fair value	2,617			10,158			—			(5,817		)	6,958
Percentage of liabilities of operations prior to netting	20		%	80		%	—		%
Liabilities of consolidated investment management funds	—			4			—			—			4
Total liabilities	$	2,617		$	10,162		$	—		$	(5,817	)	$	6,962
Percentage of total liabilities prior to netting	20		%	80		%	—		%

(a) ASC 815, Derivatives and Hedging, permits the netting of derivative receivables and derivative payables under legally enforceable master netting agreements and permits the netting of cash collateral. Netting is applicable to derivatives not designated as hedging instruments included in trading assets or trading liabilities and derivatives designated as hedging instruments included in other assets or other liabilities. Netting is allocated to the derivative products based on the net fair value of each product.

(b) Includes $538 million in Level 2 that was included in the former Grantor Trust.

(c) Includes certain interests in securitizations.

(d) Includes seed capital, private equity investments and other assets.

84 BNY Mellon

Notes to Consolidated Financial Statements (continued)

Assets measured at fair value on a recurring basis at Dec. 31, 2019													Total carrying value
(dollars in millions)	Level 1			Level 2			Level 3			Netting (a)
Available-for-sale securities:
Agency RMBS	$	—		$	27,043		$	—		$	—		$	27,043
U.S. Treasury	15,431			—			—			—			15,431
Sovereign debt/sovereign guaranteed	7,784			4,862			—			—			12,646
Agency commercial MBS	—			9,417			—			—			9,417
Foreign covered bonds	—			4,197			—			—			4,197
CLOs	—			4,063			—			—			4,063
Supranational	—			3,709			—			—			3,709
Foreign government agencies	—			2,643			—			—			2,643
Non-agency commercial MBS	—			2,178			—			—			2,178
Other ABS	—			2,143			—			—			2,143
U.S. government agencies	—			1,949			—			—			1,949
Non-agency RMBS (b)	—			1,233			—			—			1,233
State and political subdivisions	—			1,044			—			—			1,044
Corporate bonds	—			853			—			—			853
Other debt securities	—			1			—			—			1
Total available-for-sale securities	23,215			65,335			—			—			88,550
Trading assets:
Debt instruments	1,568			4,243			—			—			5,811
Equity instruments (c)	4,539			—			—			—			4,539
Derivative assets not designated as hedging:
Interest rate	4			3,686			—			(1,792		)	1,898
Foreign exchange	—			5,331			—			(4,021		)	1,310
Equity and other contracts	—			19			—			(6		)	13
Total derivative assets not designated as hedging	4			9,036			—			(5,819		)	3,221
Total trading assets	6,111			13,279			—			(5,819		)	13,571
Other assets:
Derivative assets designated as hedging:
Foreign exchange	—			21			—			—			21
Total derivative assets designated as hedging	—			21			—			—			21
Other assets (d)	38			179			—			—			217
Assets measured at NAV (d)													181
Subtotal assets of operations at fair value	29,364			78,814			—			(5,819		)	102,540
Percentage of assets of operations prior to netting	27		%	73		%	—		%
Assets of consolidated investment management funds	212			33			—			—			245
Total assets	$	29,576		$	78,847		$	—		$	(5,819	)	$	102,785
Percentage of total assets prior to netting	27		%	73		%	—		%

BNY Mellon 85

Notes to Consolidated Financial Statements (continued)

Liabilities measured at fair value on a recurring basis at Dec. 31, 2019													Total carrying value
(dollars in millions)	Level 1			Level 2			Level 3			Netting (a)
Trading liabilities:
Debt instruments	$	1,477		$	107		$	—		$	—		$	1,584
Equity instruments	73			—			—			—			73
Derivative liabilities not designated as hedging:
Interest rate	6			3,244			—			(1,986		)	1,264
Foreign exchange	—			5,340			—			(3,428		)	1,912
Equity and other contracts	3			6			—			(1		)	8
Total derivative liabilities not designated as hedging	9			8,590			—			(5,415		)	3,184
Total trading liabilities	1,559			8,697			—			(5,415		)	4,841
Long-term debt (c)	—			387			—			—			387
Other liabilities – derivative liabilities designated as hedging:
Interest rate	—			350			—			—			350
Foreign exchange	—			257			—			—			257
Total other liabilities – derivative liabilities designated as hedging	—			607			—			—			607
Subtotal liabilities of operations at fair value	1,559			9,691			—			(5,415		)	5,835
Percentage of liabilities of operations prior to netting	14		%	86		%	—		%
Liabilities of consolidated investment management funds	1			—			—			—			1
Total liabilities	$	1,560		$	9,691		$	—		$	(5,415	)	$	5,836
Percentage of total liabilities prior to netting	14		%	86		%	—		%

(a) ASC 815, Derivatives and Hedging, permits the netting of derivative receivables and derivative payables under legally enforceable master netting agreements and permits the netting of cash collateral. Netting is applicable to derivatives not designated as hedging instruments included in trading assets or trading liabilities and derivatives designated as hedging instruments included in other assets or other liabilities. Netting is allocated to the derivative products based on the net fair value of each product.

(b) Includes $640 million in Level 2 that was included in the former Grantor Trust.

(c) Includes certain interests in securitizations.

(d) Includes seed capital, private equity investments and other assets.

86 BNY Mellon

Notes to Consolidated Financial Statements (continued)

Details of certain available-for-sale securities measured at fair value on a recurring basis	June 30, 2020											Dec. 31, 2019
	Total carrying value			Ratings (a)								Total carrying value			Ratings (a)
				AAA/ AA-		A+/ A-		BBB+/ BBB-		BB+ and lower					AAA/ AA-		A+/ A-		BBB+/ BBB-		BB+ and lower
(dollars in millions)			(b)											(b)
Non-agency RMBS (c), originated in:
2007-2020	$	938		82	%	1	%	—	%	17	%	$	464		55	%	1	%	—	%	44	%
2006	250			—		22		—		78		291			—		21		—		79
2005	262			5		2		7		86		305			5		2		8		85
2004 and earlier	148			21		22		8		49		173			22		24		4		50
Total non-agency RMBS	$	1,598		51	%	6	%	2	%	41	%	$	1,233		25	%	9	%	3	%	63	%
Non-agency commercial MBS originated in:
2009-2020	$	2,630		100	%	—	%	—	%	—	%	$	2,178		98	%	2	%	—	%	—	%
Foreign covered bonds:
Canada	$	2,241		100	%	—	%	—	%	—	%	$	1,798		100	%	—	%	—	%	—	%
UK	1,093			100		—		—		—		984			100		—		—		—
Australia	750			100		—		—		—		431			100		—		—		—
Norway	533			100		—		—		—		287			100		—		—		—
Germany	407			100		—		—		—		357			100		—		—		—
Other	495			100		—		—		—		340			100		—		—		—
Total foreign covered bonds	$	5,519		100	%	—	%	—	%	—	%	$	4,197		100	%	—	%	—	%	—	%
Sovereign debt/sovereign guaranteed:
UK	$	3,773		100	%	—	%	—	%	—	%	$	3,318		100	%	—	%	—	%	—	%
Germany	2,346			100		—		—		—		1,997			100		—		—		—
France	2,238			100		—		—		—		1,272			100		—		—		—
Spain	1,961			—		4		96		—		1,453			—		6		94		—
Italy	1,069			—		—		100		—		1,260			—		—		100		—
Singapore	931			100		—		—		—		742			100		—		—		—
Ireland	676			29		71		—		—		301			—		100		—		—
Netherlands	564			100		—		—		—		791			100		—		—		—
Canada	502			100		—		—		—		271			100		—		—		—
Japan	434			—		100		—		—		274			—		100		—		—
Belgium	411			100		—		—		—		79			100		—		—		—
Austria	331			100		—		—		—		240			100		—		—		—
Hong Kong	330			100		—		—		—		411			100		—		—		—
Other (d)	321			45		—		21		34		237			39		4		—		57
Total sovereign debt/sovereign guaranteed	$	15,887		74	%	6	%	19	%	1	%	$	12,646		73	%	5	%	21	%	1	%
Foreign government agencies:
Germany	$	1,398		100	%	—	%	—	%	—	%	$	1,131		100	%	—	%	—	%	—	%
Netherlands	730			100		—		—		—		678			100		—		—		—
Canada	321			62		38		—		—		71			—		100		—		—
France	281			100		—		—		—		42			100		—		—		—
Sweden	276			100		—		—		—		202			100		—		—		—
Finland	241			100		—		—		—		245			100		—		—		—
Other	331			84		16		—		—		274			79		21		—		—
Total foreign government agencies	$	3,578		95	%	5	%	—	%	—	%	$	2,643		95	%	5	%	—	%	—	%

(a) Represents ratings by S&P or the equivalent.

(b) At June 30, 2020 and Dec. 31, 2019, sovereign debt/sovereign guaranteed securities were included in Level 1 and Level 2 in the valuation hierarchy. All other assets in the table are Level 2 assets in the valuation hierarchy.

(c) Includes $538 million at June 30, 2020 and $640 million at Dec. 31, 2019 that were included in the former Grantor Trust.

(d) Includes non-investment grade sovereign debt/sovereign guaranteed securities related to Brazil of $109 million at June 30, 2020 and $134 million at Dec. 31, 2019.

BNY Mellon 87

Notes to Consolidated Financial Statements (continued)

Assets and liabilities measured at fair value on a nonrecurring basis

Under certain circumstances, we make adjustments to the fair value of our assets, liabilities and unfunded lending-related commitments although they are not measured at fair value on an ongoing basis.

Examples would be the recording of an impairment of an asset and non-readily marketable equity securities carried at cost with upward or downward adjustments.

The following table presents the financial instruments carried on the consolidated balance sheet by caption and level in the fair value hierarchy as of June 30, 2020 and Dec. 31, 2019.

Assets measured at fair value on a nonrecurring basis	June 30, 2020								Dec. 31, 2019
							Total carrying value								Total carrying value
(in millions)	Level 1		Level 2		Level 3				Level 1		Level 2		Level 3
Loans (a)	$	—	$	53	$	—	$	53	$	—	$	58	$	—	$	58
Other assets (b)	—		107		—		107		—		64		—		64
Total assets at fair value on a nonrecurring basis	$	—	$	160	$	—	$	160	$	—	$	122	$	—	$	122

 

(a) The fair value of these loans decreased less than $1 million in the second quarter of 2020 and the fourth quarter of 2019, based on the fair value of the underlying collateral, as required by guidance in ASC 326, Financial Instruments – Credit Losses, with an offset to the allowance for credit losses.

(b) Includes non-readily marketable equity securities carried at cost with upward or downward adjustments and other assets received in satisfaction of debt.

Estimated fair value of financial instruments

The following tables present the estimated fair value and the carrying amount of financial instruments not carried at fair value on the consolidated balance sheet at June 30, 2020 and Dec. 31, 2019, by caption on the consolidated balance sheet and by the valuation hierarchy.

Summary of financial instruments	June 30, 2020
(in millions)	Level 1		Level 2		Level 3		Total estimated fair value		Carrying amount
Assets:
Interest-bearing deposits with the Federal Reserve and other central banks	$	—	$	112,728	$	—	$	112,728	$	112,728
Interest-bearing deposits with banks	—		18,063		—		18,063		18,045
Federal funds sold and securities purchased under resale agreements	—		36,638		—		36,638		36,638
Securities held-to-maturity	5,815		40,168		—		45,983		44,615
Loans (a)	—		54,377		—		54,377		54,067
Other financial assets	4,776		1,165		—		5,941		5,941
Total	$	10,591	$	263,139	$	—	$	273,730	$	272,034
Liabilities:
Noninterest-bearing deposits	$	—	$	78,100	$	—	$	78,100	$	78,100
Interest-bearing deposits	—		226,917		—		226,917		227,370
Federal funds purchased and securities sold under repurchase agreements	—		14,512		—		14,512		14,512
Payables to customers and broker-dealers	—		25,012		—		25,012		25,012
Commercial paper	—		665		—		665		665
Borrowings	—		1,852		—		1,852		1,852
Long-term debt	—		28,875		—		28,875		27,167
Total	$	—	$	375,933	$	—	$	375,933	$	374,678

(a) Does not include the leasing portfolio.

88 BNY Mellon

Notes to Consolidated Financial Statements (continued)

Summary of financial instruments	Dec. 31, 2019
(in millions)	Level 1		Level 2		Level 3		Total estimated fair value		Carrying amount
Assets:
Interest-bearing deposits with the Federal Reserve and other central banks	$	—	$	95,042	$	—	$	95,042	$	95,042
Interest-bearing deposits with banks	—		14,832		—		14,832		14,811
Federal funds sold and securities purchased under resale agreements	—		30,182		—		30,182		30,182
Securities held-to-maturity	4,630		30,175		—		34,805		34,483
Loans (a)	—		54,194		—		54,194		53,718
Other financial assets	4,830		1,233		—		6,063		6,063
Total	$	9,460	$	225,658	$	—	$	235,118	$	234,299
Liabilities:
Noninterest-bearing deposits	$	—	$	57,630	$	—	$	57,630	$	57,630
Interest-bearing deposits	—		200,846		—		200,846		201,836
Federal funds purchased and securities sold under repurchase agreements	—		11,401		—		11,401		11,401
Payables to customers and broker-dealers	—		18,758		—		18,758		18,758
Commercial paper	—		3,959		—		3,959		3,959
Borrowings	—		917		—		917		917
Long-term debt	—		27,858		—		27,858		27,114
Total	$	—	$	321,369	$	—	$	321,369	$	321,615

(a) Does not include the leasing portfolio.

Note 16–Fair value option

We elected fair value as an alternative measurement for selected financial assets and liabilities that are not otherwise required to be measured at fair value, including the assets and liabilities of consolidated investment management funds and certain long-term debt. The following table presents the assets and liabilities of consolidated investment management funds, at fair value.

Assets and liabilities of consolidated investment management funds, at fair value
	June 30, 2020		Dec. 31, 2019
(in millions)
Assets of consolidated investment management funds:
Trading assets	$	450	$	229
Other assets	10		16
Total assets of consolidated investment management funds	$	460	$	245
Liabilities of consolidated investment management funds:
Other liabilities	4		1
Total liabilities of consolidated investment management funds	$	4	$	1

BNY Mellon values the assets and liabilities of its consolidated investment management funds using quoted prices for identical assets or liabilities in active markets or observable inputs such as quoted

prices for similar assets or liabilities. Quoted prices for either identical or similar assets or liabilities in inactive markets may also be used. Accordingly, fair value best reflects the interests BNY Mellon holds in the economic performance of the consolidated investment management funds. Changes in the value of the assets and liabilities are recorded in the consolidated income statement as investment income of consolidated investment management funds and in the interest of investment management fund note holders, respectively.

We have elected the fair value option on $240 million of long-term debt. The fair value of this long-term debt was $399 million at June 30, 2020 and $387 million at Dec. 31, 2019. The long-term debt is valued using observable market inputs and is included in Level 2 of the valuation hierarchy.

The following table presents the changes in fair value of long-term debt recorded in foreign exchange and other trading revenue in the consolidated income statement.

Change in fair value of long-term debt (a)
(in millions)	2Q20			1Q20			2Q19			YTD20			YTD19
Foreign exchange and other trading revenue	$	(2	)	$	(10	)	$	(7	)	$	(12	)	$	(12	)

(a) The changes in fair value are approximately offset by an economic hedge included in foreign exchange and other trading revenue.

BNY Mellon 89

Notes to Consolidated Financial Statements (continued)

Note 17–Derivative instruments

We use derivatives to manage exposure to market risk, including interest rate risk, equity price risk and foreign currency risk, as well as credit risk. Our trading activities are focused on acting as a market-maker for our customers and facilitating customer trades in compliance with the Volcker Rule.

The notional amounts for derivative financial instruments express the dollar volume of the transactions; however, credit risk is much smaller. We perform credit reviews and enter into netting agreements and collateral arrangements to minimize the credit risk of derivative financial instruments. We enter into offsetting positions to reduce exposure to foreign currency, interest rate and equity price risk.

Use of derivative financial instruments involves reliance on counterparties. Failure of a counterparty to honor its obligation under a derivative contract is a risk we assume whenever we engage in a derivative contract. There were no counterparty default losses recorded in the second quarter of 2020.

Hedging derivatives

We utilize interest rate swap agreements to manage our exposure to interest rate fluctuations. We enter into fair value hedges as an interest rate risk management strategy to reduce fair value variability by converting certain fixed rate interest payments associated with available-for-sale securities and long-term debt to floating interest rates. We also utilize interest rate swaps and forward exchange contracts as cash flow hedges to manage our exposure to interest rate and foreign exchange rate changes.

The available-for-sale securities hedged consist of U.S. Treasury, agency and non-agency commercial MBS, sovereign debt/sovereign guaranteed, corporate bonds and foreign covered bonds. At June 30, 2020, $13.9 billion par value of available-for-sale securities were hedged with interest rate swaps designated as fair value hedges that had notional values of $13.9 billion.

The fixed rate long-term debt instruments hedged generally have original maturities of five to 30 years. In fair value hedging relationships, debt is hedged with “receive fixed rate, pay variable rate” swaps. At June 30, 2020, $13.9 billion par value of debt was

hedged with interest rate swaps designated as fair value hedges that had notional values of $13.9 billion.

In addition, we utilize forward foreign exchange contracts as hedges to mitigate foreign exchange exposures. We use forward foreign exchange contracts as cash flow hedges to convert certain forecasted non-U.S. dollar revenue and expenses into U.S. dollars. We use forward foreign exchange contracts with maturities of 12 months or less as cash flow hedges to hedge our foreign exchange exposure to currencies such as Indian rupee, British pound, Hong Kong dollar, Singapore dollar and Polish zloty used in revenue and expense transactions for entities that have the U.S. dollar as their functional currency. As of June 30, 2020, the hedged forecasted foreign currency transactions and designated forward foreign exchange contract hedges were $312 million (notional), with a pre-tax loss of $3 million recorded in accumulated OCI. This loss will be reclassified to earnings over the next 12 months.

We also utilize forward foreign exchange contracts as fair value hedges of the foreign exchange risk associated with available-for-sale securities. Forward points are designated as an excluded component and amortized into earnings over the hedge period. The unamortized derivative value associated with the excluded component is recognized in accumulated OCI. At June 30, 2020, $131 million par value of available-for-sale securities was hedged with foreign currency forward contracts that had a notional value of $131 million.

Forward foreign exchange contracts are also used to hedge the value of our net investments in foreign subsidiaries. These forward foreign exchange contracts have maturities of less than one year. The derivatives employed are designated as hedges of changes in value of our foreign investments due to exchange rates. The change in fair market value of these forward foreign exchange contracts is reported within foreign currency translation adjustments in shareholders’ equity, net of tax. At June 30, 2020, forward foreign exchange contracts with notional amounts totaling $7.6 billion were designated as net investment hedges.

In addition to forward foreign exchange contracts, we also designate non-derivative financial instruments as hedges of our net investments in foreign subsidiaries. Those non-derivative financial instruments designated as hedges of our net investments in

90 BNY Mellon

Notes to Consolidated Financial Statements (continued)

foreign subsidiaries were all long-term liabilities of BNY Mellon and, at June 30, 2020, had a combined U.S. dollar equivalent carrying value of $172 million.

The following table presents the pre-tax gains (losses) related to our fair value and cash flow hedging activities recognized in the consolidated income statement.

Income statement impact of fair value and cash flow hedges
(in millions)	Location of gains (losses)	2Q20			1Q20			2Q19			YTD20			YTD19
Interest rate fair value hedges of available-for-sale securities
Derivative	Interest revenue	$	19		$	(1,033	)	$	(486	)	$	(1,014	)	$	(869	)
Hedged item	Interest revenue	(15		)	1,011			480			996			856
Interest rate fair value hedges of long-term debt
Derivative	Interest expense	47			714			300			761			485
Hedged item	Interest expense	(49		)	(708		)	(298		)	(757		)	(482		)
Foreign exchange fair value hedges of available-for-sale securities
Derivative (a)	Other revenue	5			7			(5		)	12			1
Hedged item	Other revenue	(5		)	(7		)	5			(12		)	—
Cash flow hedges of forecasted FX exposures
(Loss) gain reclassified from OCI into income	Staff expense	(3		)	1			—			(2		)	(1		)
(Loss) recognized in the consolidated income statement due to fair value and cash flow hedging relationships		$	(1	)	$	(15	)	$	(4	)	$	(16	)	$	(10	)

(a) Includes gains of less than $1 million in the second quarter of 2020 and first quarter of 2020, a de minimis gain in the second quarter of 2019, a gain of less than $1 million in the first six months of 2020 and a gain of $1 million in the first six months of 2019 associated with the amortization of the excluded component. At June 30, 2020 and Dec. 31, 2019, the remaining accumulated OCI balance associated with the excluded component was de minimis.

The following table presents the impact of hedging derivatives used in net investment hedging relationships.

Impact of derivative instruments used in net investment hedging relationships
(in millions)
Derivatives in net investment hedging relationships	Gain or (loss) recognized in accumulated OCI on derivatives											Location of gain or (loss) reclassified from accumulated OCI into income	Gain or (loss) reclassified from accumulated OCI into income
	2Q20			1Q20		2Q19		YTD20		YTD19			2Q20		1Q20		2Q19		YTD20		YTD19
FX contracts	$	(45	)	$	437	$	76	$	392	$	70	Net interest revenue	$	—	$	—	$	—	$	—	$	—

The following table presents information on the hedged items in fair value hedging relationships.

Hedged items in fair value hedging relationships	Carrying amount of hedged asset or liability				Hedge accounting basis adjustment increase (decrease) (a)
(in millions)	June 30, 2020		Dec. 31, 2019		June 30, 2020		Dec. 31, 2019
Available-for-sale securities (b)(c)	$	13,952	$	13,792	$	1,817	$	687
Long-term debt	$	14,956	$	13,945	$	919	$	116

(a) Includes $196 million and $53 million of basis adjustment increases on discontinued hedges associated with available-for-sale securities at June 30, 2020 and Dec. 31, 2019, respectively, and $156 million and $200 million of basis adjustment decreases on discontinued hedges associated with long-term debt at June 30, 2020 and Dec. 31, 2019, respectively.

(b) Excludes hedged items where only foreign currency risk is the designated hedged risk, as the basis adjustments related to foreign currency hedges will not reverse through the consolidated income statement in future periods. The carrying amount excluded for available-for-sale securities was $131 million at June 30, 2020 and $142 million at Dec. 31, 2019.

(c) Carrying amount represents the amortized cost.

BNY Mellon 91

Notes to Consolidated Financial Statements (continued)

The following table summarizes the notional amount and carrying values of our total derivative portfolio at June 30, 2020 and Dec. 31, 2019.

Impact of derivative instruments on the balance sheet	Notional value				Asset derivatives fair value						Liability derivatives fair value
	June 30, 2020		Dec. 31, 2019		June 30, 2020			Dec. 31, 2019			June 30, 2020			Dec. 31, 2019
(in millions)
Derivatives designated as hedging instruments: (a)(b)
Interest rate contracts	$	27,775	$	28,365	$	—		$	—		$	915		$	350
Foreign exchange contracts	8,040		8,390		137			21			49			257
Total derivatives designated as hedging instruments					$	137		$	21		$	964		$	607
Derivatives not designated as hedging instruments: (b)(c)
Interest rate contracts	$	217,613	$	306,790	$	5,501		$	3,690		$	4,668		$	3,250
Foreign exchange contracts	781,991		848,961		4,322			5,331			4,036			5,340
Equity contracts	1,657		3,189		13			19			22			5
Credit contracts	165		165		—			—			2			4
Total derivatives not designated as hedging instruments					$	9,836		$	9,040		$	8,728		$	8,599
Total derivatives fair value (d)					$	9,973		$	9,061		$	9,692		$	9,206
Effect of master netting agreements (e)					(5,640		)	(5,819		)	(5,817		)	(5,415		)
Fair value after effect of master netting agreements					$	4,333		$	3,242		$	3,875		$	3,791

(a) The fair value of asset derivatives and liability derivatives designated as hedging instruments is recorded as other assets and other liabilities, respectively, on the consolidated balance sheet.

(b) For derivative transactions settled at clearing organizations, cash collateral exchanged is deemed a settlement of the derivative each day. The settlement reduces the gross fair value of derivative assets and liabilities and results in a corresponding decrease in the effect of master netting agreements, with no impact to the consolidated balance sheet.

(c) The fair value of asset derivatives and liability derivatives not designated as hedging instruments is recorded as trading assets and trading liabilities, respectively, on the consolidated balance sheet.

(d) Fair values are on a gross basis, before consideration of master netting agreements, as required by ASC 815, Derivatives and Hedging.

(e) Effect of master netting agreements includes cash collateral received and paid of $869 million and $1,046 million, respectively, at June 30, 2020, and $1,022 million and $618 million, respectively, at Dec. 31, 2019.

Trading activities (including trading derivatives)

Our trading activities are focused on acting as a market-maker for our customers, facilitating customer trades and risk mitigating economic hedging in compliance with the Volcker Rule. The change in the fair value of the derivatives utilized in our trading activities is recorded in foreign exchange and other trading revenue on the consolidated income statement.

The following table presents our foreign exchange and other trading revenue.

Foreign exchange and other trading revenue
(in millions)	2Q20			1Q20		2Q19		YTD20		YTD19
Foreign exchange	$	174		$	253	$	150	$	427	$	310
Other trading (loss) revenue	(8		)	66		16		58		26
Total foreign exchange and other trading revenue	$	166		$	319	$	166	$	485	$	336

Foreign exchange revenue includes income from purchasing and selling foreign currencies and

currency forwards, futures and options. Other trading revenue reflects results from trading in cash instruments, including fixed income and equity securities and non-foreign exchange derivatives.

We also use derivative financial instruments as risk mitigating economic hedges, which are not formally designated as accounting hedges. This includes hedging the foreign currency, interest rate or market risks inherent in some of our balance sheet exposures, such as seed capital investments and deposits, as well as certain investment management fee revenue streams. We also use total return swaps to economically hedge obligations arising from the Company’s deferred compensation plan whereby the participants defer compensation and earn a return linked to the performance of investments they select. The gains or losses on these total return swaps are recorded in staff expense on the consolidated income statement and were gains of $28 million in the second quarter of 2020 and $5 million in the second quarter of 2019, losses of $41 million in the first quarter of 2020 and $13 million in the first six months of 2020 and a gain of $23 million in the first six months of 2019.

92 BNY Mellon

Notes to Consolidated Financial Statements (continued)

We manage trading risk through a system of position limits, a value-at-risk (“VaR”) methodology based on historical simulation and other market sensitivity measures. Risk is monitored and reported to senior management by a separate unit, independent from trading, on a daily basis. Based on certain assumptions, the VaR methodology is designed to capture the potential overnight pre-tax dollar loss from adverse changes in fair values of all trading positions. The calculation assumes a one-day holding period, utilizes a 99% confidence level and incorporates non-linear product characteristics. The VaR model is one of several statistical models used to develop economic capital results, which are allocated to lines of business for computing risk-adjusted performance.

VaR methodology does not evaluate risk attributable to extraordinary financial, economic or other occurrences. As a result, the risk assessment process includes a number of stress scenarios based upon the risk factors in the portfolio and management’s assessment of market conditions. Additional stress scenarios based upon historical market events are also performed. Stress tests may incorporate the impact of reduced market liquidity and the breakdown of historically observed correlations and extreme scenarios. VaR and other statistical measures, stress testing and sensitivity analysis are incorporated into other risk management materials.

Counterparty credit risk and collateral

We assess the credit risk of our counterparties through regular examination of their financial statements, confidential communication with the management of those counterparties and regular monitoring of publicly available credit rating information. This and other information is used to develop proprietary credit rating metrics used to assess credit quality.

Collateral requirements are determined after a comprehensive review of the credit quality of each counterparty. Collateral is generally held or pledged in the form of cash and/or highly liquid government securities. Collateral requirements are monitored and adjusted daily.

Additional disclosures concerning derivative financial instruments are provided in Note 15.

Disclosure of contingent features in over-the-counter (“OTC”) derivative instruments

Certain OTC derivative contracts and/or collateral agreements contain credit-risk contingent features triggered upon a rating downgrade in which the counterparty has the right to request additional collateral or the right to terminate the contracts in a net liability position.

The following table shows the aggregate fair value of OTC derivative contracts in net liability positions that contained credit-risk contingent features and the value of collateral that has been posted.

	June 30, 2020		Dec. 31, 2019
(in millions)
Aggregate fair value of OTC derivatives in net liability positions (a)	$	5,951	$	3,442
Collateral posted	$	6,372	$	3,671

(a) Before consideration of cash collateral.

The aggregate fair value of OTC derivative contracts containing credit-risk contingent features can fluctuate from quarter to quarter due to changes in market conditions, composition of counterparty trades, new business or changes to the contingent features.

The Bank of New York Mellon, our largest banking subsidiary, enters into the substantial majority of our OTC derivative contracts and/or collateral agreements. As such, the contingent features may be triggered if The Bank of New York Mellon’s long-term issuer rating was downgraded.

The following table shows the fair value of contracts falling under early termination provisions that were in net liability positions for three key ratings triggers.

Potential close-out exposures (fair value) (a)
	June 30, 2020		Dec. 31, 2019
(in millions)
If The Bank of New York Mellon’s rating changed to: (b)
A3/A-	$	31	$	56
Baa2/BBB	$	558	$	608
Ba1/BB+	$	2,981	$	2,084

(a) The amounts represent potential total close-out values if The Bank of New York Mellon’s long-term issuer rating were to immediately drop to the indicated levels, and do not reflect collateral posted.

(b) Represents ratings by Moody’s/S&P.

BNY Mellon 93

Notes to Consolidated Financial Statements (continued)

If The Bank of New York Mellon’s debt rating had fallen below investment grade on June 30, 2020 and Dec. 31, 2019, existing collateral arrangements would

have required us to post additional collateral of $31 million and $63 million, respectively.

The following tables present derivative and financial instruments and their related offsets. There were no derivative instruments or financial instruments subject to a legally enforceable netting agreement for which we are not currently netting.

Offsetting of derivative assets and financial assets at June 30, 2020
	Gross assets recognized		Gross amounts offset in the balance sheet			Net assets recognized in the balance sheet		Gross amounts not offset in the balance sheet
(in millions)					(a)			Financial instruments		Cash collateral received		Net amount
Derivatives subject to netting arrangements:
Interest rate contracts	$	3,549	$	2,436		$	1,113	$	384	$	—	$	729
Foreign exchange contracts	4,026		3,204			822		7		—		815
Equity and other contracts	9		—			9		1		—		8
Total derivatives subject to netting arrangements	7,584		5,640			1,944		392		—		1,552
Total derivatives not subject to netting arrangements	2,389		—			2,389		—		—		2,389
Total derivatives	9,973		5,640			4,333		392		—		3,941
Reverse repurchase agreements	72,781		48,615		(b)	24,166		24,140		—		26
Securities borrowing	12,472		—			12,472		11,843		—		629
Total	$	95,226	$	54,255		$	40,971	$	36,375	$	—	$	4,596

(a) Includes the effect of netting agreements and net cash collateral received. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions.

(b) Offsetting of reverse repurchase agreements relates to our involvement in the Fixed Income Clearing Corporation (“FICC”), where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.

Offsetting of derivative assets and financial assets at Dec. 31, 2019
	Gross assets recognized		Gross amounts offset in the balance sheet			Net assets recognized in the balance sheet		Gross amounts not offset in the balance sheet
(in millions)					(a)			Financial instruments		Cash collateral received		Net amount
Derivatives subject to netting arrangements:
Interest rate contracts	$	2,394	$	1,792		$	602	$	207	$	—	$	395
Foreign exchange contracts	4,861		4,021			840		44		—		796
Equity and other contracts	9		6			3		—		—		3
Total derivatives subject to netting arrangements	7,264		5,819			1,445		251		—		1,194
Total derivatives not subject to netting arrangements	1,797		—			1,797		—		—		1,797
Total derivatives	9,061		5,819			3,242		251		—		2,991
Reverse repurchase agreements	112,355		93,794		(b)	18,561		18,554		—		7
Securities borrowing	11,621		—			11,621		11,278		—		343
Total	$	133,037	$	99,613		$	33,424	$	30,083	$	—	$	3,341

(a) Includes the effect of netting agreements and net cash collateral received. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions.

(b) Offsetting of reverse repurchase agreements relates to our involvement in the FICC, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.

94 BNY Mellon

Notes to Consolidated Financial Statements (continued)

Offsetting of derivative liabilities and financial liabilities at June 30, 2020						Net liabilities recognized in the balance sheet
	Gross liabilities recognized		Gross amounts offset in the balance sheet					Gross amounts not offset in the balance sheet
(in millions)					(a)			Financial instruments		Cash collateral pledged		Net amount
Derivatives subject to netting arrangements:
Interest rate contracts	$	5,563	$	2,680		$	2,883	$	2,849	$	—	$	34
Foreign exchange contracts	3,690		3,134			556		150		—		406
Equity and other contracts	22		3			19		—		—		19
Total derivatives subject to netting arrangements	9,275		5,817			3,458		2,999		—		459
Total derivatives not subject to netting arrangements	417		—			417		—		—		417
Total derivatives	9,692		5,817			3,875		2,999		—		876
Repurchase agreements	59,794		48,615		(b)	11,179		11,175		—		4
Securities lending	982		—			982		962		—		20
Total	$	70,468	$	54,432		$	16,036	$	15,136	$	—	$	900

(a) Includes the effect of netting agreements and net cash collateral paid. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions.

(b) Offsetting of repurchase agreements relates to our involvement in the FICC, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.

Offsetting of derivative liabilities and financial liabilities at Dec. 31, 2019						Net liabilities recognized in the balance sheet
	Gross liabilities recognized		Gross amounts offset in the balance sheet					Gross amounts not offset in the balance sheet
(in millions)					(a)			Financial instruments		Cash collateral pledged		Net amount
Derivatives subject to netting arrangements:
Interest rate contracts	$	3,550	$	1,986		$	1,564	$	1,539	$	—	$	25
Foreign exchange contracts	4,873		3,428			1,445		74		—		1,371
Equity and other contracts	5		1			4		2		—		2
Total derivatives subject to netting arrangements	8,428		5,415			3,013		1,615		—		1,398
Total derivatives not subject to netting arrangements	778		—			778		—		—		778
Total derivatives	9,206		5,415			3,791		1,615		—		2,176
Repurchase agreements	104,451		93,794		(b)	10,657		10,657		—		—
Securities lending	718		—			718		694		—		24
Total	$	114,375	$	99,209		$	15,166	$	12,966	$	—	$	2,200

(a) Includes the effect of netting agreements and net cash collateral paid. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions.

(b) Offsetting of repurchase agreements relates to our involvement in the FICC, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.

BNY Mellon 95

Notes to Consolidated Financial Statements (continued)

Secured borrowings

The following table presents the contract value of repurchase agreements and securities lending transactions accounted for as secured borrowings by the type of collateral provided to counterparties.

Repurchase agreements and securities lending transactions accounted for as secured borrowings
	June 30, 2020								Dec. 31, 2019
	Remaining contractual maturity						Total		Remaining contractual maturity						Total
(in millions)	Overnight and continuous		Up to 30 days		30 days or more				Overnight and continuous		Up to 30 days		30 days or more
Repurchase agreements:
U.S. Treasury	$	52,950	$	300	$	109	$	53,359	$	94,788	$	10	$	—	$	94,798
U.S. government agencies	642		—		—		642		594		16		—		610
Agency RMBS	1,384		—		149		1,533		4,234		774		—		5,008
Corporate bonds	195		23		1,272		1,490		266		236		1,617		2,119
Other debt securities	93		79		1,749		1,921		40		188		1,079		1,307
Equity securities	—		98		751		849		31		99		479		609
Total	$	55,264	$	500	$	4,030	$	59,794	$	99,953	$	1,323	$	3,175	$	104,451
Securities lending:
U.S. government agencies	$	21	$	—	$	—	$	21	$	19	$	—	$	—	$	19
Other debt securities	191		—		—		191		201		—		—		201
Equity securities	770		—		—		770		498		—		—		498
Total	$	982	$	—	$	—	$	982	$	718	$	—	$	—	$	718
Total secured borrowings	$	56,246	$	500	$	4,030	$	60,776	$	100,671	$	1,323	$	3,175	$	105,169

BNY Mellon’s repurchase agreements and securities lending transactions primarily encounter risk associated with liquidity. We are required to pledge collateral based on predetermined terms within the agreements. If we were to experience a decline in the fair value of the collateral pledged for these transactions, we could be required to provide additional collateral to the counterparty, therefore decreasing the amount of assets available for other liquidity needs that may arise. BNY Mellon also offers tri-party collateral agency services in the tri-party repo market where we are exposed to credit risk. In order to mitigate this risk, we require dealers to fully secure intraday credit.

Note 18–Commitments and contingent liabilities

Off-balance sheet arrangements

In the normal course of business, various commitments and contingent liabilities are outstanding that are not reflected in the accompanying consolidated balance sheets.

Our significant trading and off-balance sheet risks are securities, foreign currency and interest rate risk management products, commercial lending commitments, letters of credit and securities lending

indemnifications. We assume these risks to reduce interest rate and foreign currency risks, to provide customers with the ability to meet credit and liquidity needs and to hedge foreign currency and interest rate risks. These items involve, to varying degrees, credit, foreign currency and interest rate risks not recognized on the balance sheet. Our off-balance sheet risks are managed and monitored in manners similar to those used for on-balance sheet risks.

The following table presents a summary of our off-balance sheet credit risks.

Off-balance sheet credit risks	June 30, 2020		Dec. 31, 2019
(in millions)
Lending commitments	$	49,147	$	49,119
Standby letters of credit (“SBLC”) (a)	2,291		2,298
Commercial letters of credit	59		74
Securities lending indemnifications (b)(c)	417,924		408,378

(a) Net of participations totaling $145 million at June 30, 2020 and $146 million at Dec. 31, 2019.

(b) Excludes the indemnification for securities for which BNY Mellon acts as an agent on behalf of CIBC Mellon clients, which totaled $58 billion at June 30, 2020 and $57 billion at Dec. 31, 2019.

(c) Includes cash collateral, invested in indemnified repurchase agreements, held by us as securities lending agent of $40 billion at June 30, 2020 and $37 billion at Dec. 31, 2019.

96 BNY Mellon

Notes to Consolidated Financial Statements (continued)

The total potential loss on undrawn lending commitments, standby and commercial letters of credit, and securities lending indemnifications is equal to the total notional amount if drawn upon, which does not consider the value of any collateral.

Since many of the lending commitments are expected to expire without being drawn upon, the total amount does not necessarily represent future cash requirements. A summary of lending commitment maturities is as follows: $32.6 billion in less than one year, $16.2 billion in one to five years and $319 million over five years.

SBLCs principally support obligations of corporate clients and were collateralized with cash and securities of $185 million at June 30, 2020 and $184 million at Dec. 31, 2019. At June 30, 2020, $1.7 billion of the SBLCs will expire within one year, $545 million in one to five years and $7 million over five years.

We must recognize, at the inception of an SBLC and foreign and other guarantees, a liability for the fair value of the obligation undertaken in issuing the guarantee. The fair value of the liability, which was recorded with a corresponding asset in other assets, was estimated as the present value of contractual customer fees. The estimated liability for losses related to SBLCs and foreign and other guarantees, if any, is included in the allowance for lending-related commitments.

Payment/performance risk of SBLCs is monitored using both historical performance and internal ratings criteria. BNY Mellon’s historical experience is that SBLCs typically expire without being funded. SBLCs below investment grade are monitored closely for payment/performance risk. The table below shows SBLCs by investment grade:

Standby letters of credit	June 30, 2020		Dec. 31, 2019
Investment grade	89	%	90	%
Non-investment grade	11	%	10	%

A commercial letter of credit is normally a short-term instrument used to finance a commercial contract for the shipment of goods from a seller to a buyer. Although the commercial letter of credit is contingent upon the satisfaction of specified conditions, it represents a credit exposure if the buyer defaults on

the underlying transaction. As a result, the total contractual amounts do not necessarily represent future cash requirements. Commercial letters of credit totaled $59 million at June 30, 2020 and $74 million at Dec. 31, 2019.

We expect many of the lending commitments and letters of credit to expire without the need to advance any cash. The revenue associated with guarantees frequently depends on the credit rating of the obligor and the structure of the transaction, including collateral, if any. The allowance for lending-related commitments was $152 million at June 30, 2020 and $94 million at Dec. 31, 2019.

A securities lending transaction is a fully collateralized transaction in which the owner of a security agrees to lend the security (typically through an agent, in our case, The Bank of New York Mellon) to a borrower, usually a broker-dealer or bank, on an open, overnight or term basis, under the terms of a prearranged contract.

We typically lend securities with indemnification against borrower default. We generally require the borrower to provide collateral with a minimum value of 102% of the fair value of the securities borrowed, which is monitored on a daily basis, thus reducing credit risk. Market risk can also arise in securities lending transactions. These risks are controlled through policies limiting the level of risk that can be undertaken. Securities lending transactions are generally entered into only with highly rated counterparties. Securities lending indemnifications were secured by collateral of $438 billion at June 30, 2020 and $428 billion at Dec. 31, 2019.

CIBC Mellon, a joint venture between BNY Mellon and the Canadian Imperial Bank of Commerce (“CIBC”), engages in securities lending activities.  CIBC Mellon, BNY Mellon and CIBC jointly and severally indemnify securities lenders against specific types of borrower default. At June 30, 2020 and Dec. 31, 2019, $58 billion and $57 billion, respectively, of borrowings at CIBC Mellon, for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, were secured by collateral of $62 billion and $61 billion, respectively. If, upon a default, a borrower’s collateral was not sufficient to cover its related obligations, certain losses related to the indemnification could be covered by the indemnitors.

BNY Mellon 97

Notes to Consolidated Financial Statements (continued)

Unsettled repurchase and reverse repurchase agreements

In the normal course of business, we enter into repurchase agreements and reverse repurchase agreements that settle at a future date. In repurchase agreements, BNY Mellon receives cash from and provides securities as collateral to a counterparty at settlement. In reverse repurchase agreements, BNY Mellon advances cash to and receives securities as collateral from the counterparty at settlement. These transactions are recorded on the consolidated balance sheet on the settlement date. At June 30, 2020, we had no unsettled repurchase agreements and no unsettled reverse repurchase agreements.

Industry concentrations

We have significant industry concentrations related to credit exposure at June 30, 2020. The tables below present our credit exposure in the financial institutions and commercial portfolios.

Financial institutions portfolio exposure (in billions)	June 30, 2020
	Loans		Unfunded commitments		Total exposure
Securities industry	$	1.6	$	24.5	$	26.1
Banks	7.0		1.1		8.1
Asset managers	1.3		6.3		7.6
Insurance	0.1		2.7		2.8
Government	0.1		0.2		0.3
Other	0.7		0.7		1.4
Total	$	10.8	$	35.5	$	46.3

 

Commercial portfolio exposure (in billions)	June 30, 2020
	Loans		Unfunded commitments		Total exposure
Manufacturing	$	1.1	$	3.5	$	4.6
Services and other	1.1		3.3		4.4
Energy and utilities	0.1		4.1		4.2
Media and telecom	0.1		0.9		1.0
Total	$	2.4	$	11.8	$	14.2

Major concentrations in securities lending are primarily to broker-dealers and are generally collateralized with cash and/or securities.

Sponsored Member Repo Program

BNY Mellon is a sponsoring member in the FICC sponsored member program, where we submit eligible overnight repurchase and reverse repurchase transactions in U.S. Treasury securities (“Sponsored

Member Transactions”) between BNY Mellon and our sponsored member clients for novation and clearing through FICC pursuant to the FICC Government Securities Division rulebook (the “FICC Rules”). We also guarantee to FICC the prompt and full payment and performance of our sponsored member clients’ respective obligations under the FICC Rules in connection with such clients’ Sponsored Member Transactions. We minimize our credit exposure under this guaranty by obtaining a security interest in our sponsored member clients’ collateral and rights under Sponsored Member Transactions. See “Offsetting assets and liabilities” in Note 17 for additional information on our repurchase and reverse repurchase agreements.

Indemnification arrangements

We have provided standard representations for underwriting agreements, acquisition and divestiture agreements, sales of loans and commitments, and other similar types of arrangements and customary indemnification for claims and legal proceedings related to providing financial services that are not otherwise included above. Insurance has been purchased to mitigate certain of these risks. Generally, there are no stated or notional amounts included in these indemnifications and the contingencies triggering the obligation for indemnification are not expected to occur. Furthermore, often counterparties to these transactions provide us with comparable indemnifications. We are unable to develop an estimate of the maximum payout under these indemnifications for several reasons. In addition to the lack of a stated or notional amount in a majority of such indemnifications, we are unable to predict the nature of events that would trigger indemnification or the level of indemnification for a certain event. We believe, however, that the possibility that we will have to make any material payments for these indemnifications is remote. At June 30, 2020 and Dec. 31, 2019, we have not recorded any material liabilities under these arrangements.

Clearing and settlement exchanges

We are a noncontrolling equity investor in, and/or member of, several industry clearing or settlement exchanges through which foreign exchange, securities, derivatives or other transactions settle. Certain of these industry clearing and settlement exchanges require their members to guarantee their

98 BNY Mellon

Notes to Consolidated Financial Statements (continued)

obligations and liabilities and/or to provide liquidity support in the event other members do not honor their obligations. We believe the likelihood that a clearing or settlement exchange (of which we are a member) would become insolvent is remote. Additionally, certain settlement exchanges have implemented loss allocation policies that enable the exchange to allocate settlement losses to the members of the exchange. It is not possible to quantify such mark-to-market loss until the loss occurs. Any ancillary costs that occur as a result of any mark-to-market loss cannot be quantified. In addition, we also sponsor clients as members on clearing and settlement exchanges and guarantee their obligations. At June 30, 2020 and Dec. 31, 2019, we did not record any material liabilities under these arrangements.

Legal proceedings

In the ordinary course of business, The Bank of New York Mellon Corporation and its subsidiaries are routinely named as defendants in or made parties to pending and potential legal actions. We also are subject to governmental and regulatory examinations, information-gathering requests, investigations and proceedings (both formal and informal). Claims for significant monetary damages are often asserted in many of these legal actions, while claims for disgorgement, restitution, penalties and/or other remedial actions or sanctions may be sought in governmental and regulatory matters. It is inherently difficult to predict the eventual outcomes of such matters given their complexity and the particular facts and circumstances at issue in each of these matters. However, on the basis of our current knowledge and understanding, we do not believe that judgments, settlements or orders, if any, arising from these matters (either individually or in the aggregate, after giving effect to applicable reserves and insurance coverage) will have a material adverse effect on the consolidated financial position or liquidity of BNY Mellon, although they could have a material effect on our results of operations in a given period.

In view of the inherent unpredictability of outcomes in litigation and regulatory matters, particularly where (i) the damages sought are substantial or indeterminate, (ii) the proceedings are in the early stages, or (iii) the matters involve novel legal theories or a large number of parties, as a matter of course there is considerable uncertainty surrounding the timing or ultimate resolution of litigation and regulatory matters, including a possible eventual loss,

fine, penalty or business impact, if any, associated with each such matter. In accordance with applicable accounting guidance, we establish accruals for litigation and regulatory matters when those matters proceed to a stage where they present loss contingencies that are both probable and reasonably estimable. In such cases, there may be a possible exposure to loss in excess of any amounts accrued. We regularly monitor such matters for developments that could affect the amount of the accrual, and will adjust the accrual amount as appropriate. If the loss contingency in question is not both probable and reasonably estimable, we do not establish an accrual and the matter continues to be monitored for any developments that would make the loss contingency both probable and reasonably estimable. We believe that our accruals for legal proceedings are appropriate and, in the aggregate, are not material to the consolidated financial position of BNY Mellon, although future accruals could have a material effect on the results of operations in a given period. In addition, if we have the potential to recover a portion of an estimated loss from a third party, we record a receivable up to the amount of the accrual that is probable of recovery.

For certain of those matters described here for which a loss contingency may, in the future, be reasonably possible (whether in excess of a related accrued liability or where there is no accrued liability), BNY Mellon is currently unable to estimate a range of reasonably possible loss. For those matters described here where BNY Mellon is able to estimate a reasonably possible loss, the aggregate range of such reasonably possible loss is up to $730 million in excess of the accrued liability (if any) related to those matters. For matters where a reasonably possible loss is denominated in a foreign currency, our estimate is adjusted quarterly based on prevailing exchange rates. We do not consider potential recoveries when estimating reasonably possible losses.

The following describes certain judicial, regulatory and arbitration proceedings involving BNY Mellon:

Mortgage-Securitization Trusts Proceedings

The Bank of New York Mellon has been named as a defendant in a number of legal actions brought by MBS investors alleging that the trustee has expansive duties under the governing agreements, including the duty to investigate and pursue breach of representation and warranty claims against other parties to the MBS transactions. Four actions

BNY Mellon 99

Notes to Consolidated Financial Statements (continued)

commenced in August 2014, December 2014, December 2015 and February 2017 are pending in New York federal court; and one action commenced in May 2016 is pending in New York state court.

Matters Related to R. Allen Stanford

In late December 2005, Pershing LLC (“Pershing”) became a clearing firm for Stanford Group Co. (“SGC”), a registered broker-dealer that was part of a group of entities ultimately controlled by R. Allen Stanford (“Stanford”). Stanford International Bank (“SIB”), also controlled by Stanford, issued certificates of deposit (“CDs”). Some investors allegedly wired funds from their SGC accounts to purchase CDs. In 2009, the Securities and Exchange Commission (“SEC”) charged Stanford with operating a Ponzi scheme in connection with the sale of CDs, and SGC was placed into receivership. Alleged purchasers of CDs have filed two putative class action proceedings against Pershing: one in November 2009 in Texas federal court, and one in May 2016 in New Jersey federal court. Thirteen lawsuits have been filed against Pershing in Louisiana, Florida and New Jersey federal courts in January 2010, January and February 2015, October 2015 and May 2016. The purchasers allege that Pershing, as SGC’s clearing firm, assisted Stanford in a fraudulent scheme and assert contractual, statutory and common law claims. In March 2019, a group of investors filed a putative class action against The Bank of New York Mellon in New Jersey federal court, making the same allegations as in the prior actions brought against Pershing. All of the cases that have been brought in federal court against Pershing and the case brought against The Bank of New York Mellon have been consolidated in Texas federal court for discovery purposes. On Dec. 19, 2019, the Court of Appeals for the Fifth Circuit affirmed the dismissal of six individual federal lawsuits brought under Florida law, which will also apply to four other similarly situated cases. On March 18, 2020, the plaintiffs in those lawsuits filed a Petition for Writ of Certiorari seeking permission to appeal to the United States Supreme Court. Financial Industry Regulatory Authority, Inc. (“FINRA”) arbitration proceedings also have been initiated by alleged purchasers asserting similar claims.

Brazilian Postalis Litigation

BNY Mellon Servicos Financeiros DTVM S.A. (“DTVM”), a subsidiary that provides asset services in Brazil, acts as administrator for certain investment funds in which a public pension fund for postal

workers called Postalis-Instituto de Seguridade Social dos Correios e Telégrafos (“Postalis”) invested. On Aug. 22, 2014, Postalis sued DTVM in Rio de Janeiro, Brazil for losses related to a Postalis fund for which DTVM is administrator. Postalis alleges that DTVM failed to properly perform duties, including to conduct due diligence of and exert control over the manager. On March 12, 2015, Postalis filed a lawsuit in Rio de Janeiro against DTVM and BNY Mellon Administração de Ativos Ltda. (“Ativos”) alleging failure to properly perform duties relating to another fund of which DTVM is administrator and Ativos is manager. On Dec. 14, 2015, Associacão dos Profissionais dos Correios (“ADCAP”), a Brazilian postal workers association, filed a lawsuit in São Paulo against DTVM and other defendants alleging that DTVM improperly contributed to Postalis investment losses. On March 20, 2017, the lawsuit was dismissed without prejudice, and ADCAP has appealed that decision. On Dec. 17, 2015, Postalis filed three lawsuits in Rio de Janeiro against DTVM and Ativos alleging failure to properly perform duties with respect to investments in several other funds. On Feb. 4, 2016, Postalis filed a lawsuit in Brasilia against DTVM, Ativos and BNY Mellon Alocação de Patrimônio Ltda. (“Alocação de Patrimônio”), an investment management subsidiary, alleging failure to properly perform duties and liability for losses with respect to investments in various funds of which the defendants were administrator and/or manager. On Jan. 16, 2018, the Brazilian Federal Prosecution Service (“MPF”) filed a civil lawsuit in São Paulo against DTVM alleging liability for Postalis losses based on alleged failures to properly perform certain duties as administrator to certain funds in which Postalis invested or as controller of Postalis’s own investment portfolio. On April 18, 2018, the court dismissed the lawsuit without prejudice, and the MPF has appealed that decision. In addition, the Tribunal de Contas da Uniao, an administrative tribunal, has initiated two proceedings with the purpose of determining liability for losses to two investment funds administered by DTVM in which Postalis was the exclusive investor. On Oct. 4, 2019, Postalis and another pension fund filed a request for arbitration in São Paulo against DTVM and Ativos alleging liability for losses to an investment fund for which DTVM was administrator and Ativos was manager. On Oct. 25, 2019, Postalis filed a lawsuit in Rio de Janeiro against DTVM and Alocação de Patrimônio, alleging liability for losses in another fund for which DTVM was administrator and Alocação de Patrimônio and Ativos were managers.

100 BNY Mellon

Notes to Consolidated Financial Statements (continued)

Brazilian Silverado Litigation

DTVM acts as administrator for the Fundo de Investimento em Direitos Creditórios Multisetorial Silverado Maximum (“Silverado Maximum Fund”), which invests in commercial credit receivables. On June 2, 2016, the Silverado Maximum Fund sued DTVM in its capacity as administrator, along with Deutsche Bank S.A. - Banco Alemão in its capacity as custodian and Silverado Gestão e Investimentos Ltda. in its capacity as investment manager. The Fund alleges that each of the defendants failed to fulfill its respective duty, and caused losses to the Fund for which the defendants are jointly and severally liable.

German Tax Matters

German authorities are investigating past “cum/ex” trading, which involved the purchase of equity securities on or shortly before the dividend date, but settled after that date, potentially resulting in an unwarranted refund of withholding tax. German authorities have taken the view that past cum/ex trading may have resulted in tax avoidance or evasion. European subsidiaries of BNY Mellon have been informed by German authorities about investigations into potential cum/ex trading by certain third-party investment funds, where one of the subsidiaries had acquired entities that served as depositary and/or fund manager for those third-party investment funds. We have received information requests from the authorities relating to pre-acquisition activity and are cooperating fully with those requests. We have not received any tax demand concerning cum/ex trading. In August 2019, the District Court of Bonn ordered that one of these subsidiaries be joined as a secondary party in connection with the prosecution of unrelated individual defendants. Trial commenced in September 2019. In March 2020, the court stated that it would refrain from taking action against the subsidiary in order to expedite the conclusion of the trial. The court convicted the unrelated individual defendants, and determined that the cum/ex trading activities of the relevant third-party investment funds were unlawful. In connection with the acquisition of the subject entities, we obtained an indemnity for liabilities from the sellers that we intend to pursue as necessary.

Note 19–Lines of business

We have an internal information system that produces performance data along product and service lines for our two principal businesses and the Other segment. The primary products and services and types of revenue for our principal businesses and a description of the Other segment are presented in Note 24 of the Notes to Consolidated Financial Statements in our 2019 Annual Report.

Business accounting principles

Our business data has been determined on an internal management basis of accounting, rather than the generally accepted accounting principles used for consolidated financial reporting. These measurement principles are designed so that reported results of the businesses will track their economic performance.

Business results are subject to reclassification when organizational changes are made. There were no significant organizational changes in the second quarter of 2020. The results are also subject to refinements in revenue and expense allocation methodologies, which are typically reflected on a prospective basis.

In the first quarter of 2020, we reclassified the results of certain services provided between the segments from noninterest expense to fee and other revenue. This activity is offset in the Other segment and relates to services that are also provided to third parties and provides consistency with the reporting of the revenues. This adjustment had no impact on income before taxes of the businesses. Also in the first quarter of 2020, we reclassified the results related to certain lending activities from the Wealth Management business to the Pershing business. These loans were originated by the Wealth Management business as a service to Pershing clients. This resulted in an increase in total revenue, noninterest expense and income before taxes in the Pershing business and corresponding decrease in the Wealth Management business. Prior periods were restated in the first quarter of 2020 for both reclassifications.

BNY Mellon 101

Notes to Consolidated Financial Statements (continued)

The accounting policies of the businesses are the same as those described in Note 1 of the Notes to Consolidated Financial Statements in our 2019 Annual Report.

The results of our businesses are presented and analyzed on an internal management reporting basis.

• Revenue amounts reflect fee and other revenue generated by each business and include revenue for services provided between the segments that are also provided to third parties. Fee and other revenue transferred between businesses under revenue transfer agreements is included within other revenue in each business.

• Revenues and expenses associated with specific client bases are included in those businesses. For example, foreign exchange activity associated with clients using custody products is included in Investment Services.

• Net interest revenue is allocated to businesses based on the yields on the assets and liabilities generated by each business. We employ a funds transfer pricing system that matches funds with the specific assets and liabilities of each business based on their interest sensitivity and maturity characteristics.

• The provision for credit losses associated with the respective credit portfolios is reflected in each business segment.

• Incentives expense related to restricted stock is allocated to the businesses.

• Support and other indirect expenses, including services provided between segments that are not provided to third parties or not subject to a revenue transfer agreement, are allocated to businesses based on internally developed methodologies and reflected in noninterest expense.

• Recurring FDIC expense is allocated to the businesses based on average deposits generated within each business.

• Litigation expense is generally recorded in the business in which the charge occurs.

• Management of the securities portfolio is a shared service contained in the Other segment. As a result, gains and losses associated with the valuation of the securities portfolio are generally included in the Other segment.

• Client deposits serve as the primary funding source for our securities portfolio. We typically allocate all interest revenue to the businesses generating the deposits. Accordingly, accretion related to the portion of the securities portfolio restructured in 2009 has been included in the results of the businesses.

• Balance sheet assets and liabilities and their related income or expense are specifically assigned to each business. Businesses with a net liability position have been allocated assets.

• Goodwill and intangible assets are reflected within individual businesses.

The following consolidating schedules present the contribution of our businesses to our overall profitability.

For the quarter ended June 30, 2020	Investment Services			Investment and Wealth Management				Other			Consolidated
(dollars in millions)
Total fee and other revenue	$	2,339		$	838		(a)	$	38		$	3,215		(a)
Net interest revenue (expense)	768			48				(36		)	780
Total revenue	3,107			886			(a)	2			3,995			(a)
Provision for credit losses	145			7				(9		)	143
Noninterest expense	1,989			658				39			2,686
Income (loss) before income taxes	$	973		$	221		(a)	$	(28	)	$	1,166		(a)
Pre-tax operating margin (b)	31		%	25		%		N/M			29		%
Average assets	$	335,288		$	30,327			$	49,744		$	415,359

(a) Total fee and other revenue includes net income from consolidated investment management funds of $39 million, representing $54 million of income and noncontrolling interests of $15 million. Total revenue and income before income taxes are net of noncontrolling interests of $15 million.

(b) Income before income taxes divided by total revenue.

N/M - Not meaningful.

102 BNY Mellon

Notes to Consolidated Financial Statements (continued)

For the quarter ended March 31, 2020	Investment Services			Investment and Wealth Management				Other			Consolidated
(dollars in millions)
Total fee and other revenue	$	2,436		$	846		(a)	$	30		$	3,312		(a)
Net interest revenue (expense)	806			52				(44		)	814
Total revenue (loss)	3,242			898			(a)	(14		)	4,126			(a)
Provision for credit losses	149			9				11			169
Noninterest expense	1,987			695				30			2,712
Income (loss) before income taxes	$	1,106		$	194		(a)	$	(55	)	$	1,245		(a)
Pre-tax operating margin (b)	34		%	22		%		N/M			30		%
Average assets	$	304,089		$	30,543			$	50,646		$	385,278

(a) Total fee and other revenue includes net loss from consolidated investment management funds of $20 million, representing $38 million of losses and a loss attributable to noncontrolling interests of $18 million. Total revenue and income before income taxes are net of a loss attributable to noncontrolling interests of $18 million.

(b) Income before income taxes divided by total revenue.

N/M - Not meaningful.

For the quarter ended June 30, 2019	Investment Services			Investment and Wealth Management				Other			Consolidated
(dollars in millions)
Total fee and other revenue	$	2,233		$	854		(a)	$	31		$	3,118		(a)
Net interest revenue (expense)	783			59				(40		)	802
Total revenue (loss)	3,016			913			(a)	(9		)	3,920			(a)
Provision for credit losses	(4		)	(2		)		(2		)	(8		)
Noninterest expense	1,963			655				29			2,647
Income (loss) before income taxes	$	1,057		$	260		(a)	$	(36	)	$	1,281		(a)
Pre-tax operating margin (b)	35		%	29		%		N/M			33		%
Average assets	$	264,781		$	29,793			$	47,810		$	342,384

(a) Total fee and other revenue includes net income from consolidated investment management funds of $6 million, representing $10 million of income and noncontrolling interests of $4 million. Total revenue and income before income taxes are net of noncontrolling interests of $4 million.

(b) Income before income taxes divided by total revenue.

N/M - Not meaningful.

For the six months ended June 30, 2020	Investment Services			Investment and Wealth Management				Other			Consolidated
(dollars in millions)
Total fee and other revenue	$	4,775		$	1,684		(a)	$	68		$	6,527		(a)
Net interest revenue (expense)	1,574			100				(80		)	1,594
Total revenue (loss)	6,349			1,784			(a)	(12		)	8,121			(a)
Provision for credit losses	294			16				2			312
Noninterest expense	3,976			1,353				69			5,398
Income (loss) before income taxes	$	2,079		$	415		(a)	$	(83	)	$	2,411		(a)
Pre-tax operating margin (b)	33		%	23		%		N/M			30		%
Average assets	$	319,689		$	30,435			$	50,194		$	400,318

(a) Total fee and other revenue includes net income from consolidated investment management funds of $19 million, representing $16 million of income and a loss attributable to noncontrolling interests of $3 million. Total revenue and income before income taxes are net of a loss attributable to noncontrolling interests of $3 million.

(b) Income before income taxes divided by total revenue.

N/M - Not meaningful.

BNY Mellon 103

Notes to Consolidated Financial Statements (continued)

For the six months ended June 30, 2019	Investment Services			Investment and Wealth Management				Other			Consolidated
(dollars in millions)
Total fee and other revenue	$	4,394		$	1,723		(a)	$	49		$	6,166		(a)
Net interest revenue (expense)	1,587			126				(70		)	1,643
Total revenue (loss)	5,981			1,849			(a)	(21		)	7,809			(a)
Provision for credit losses	4			(1		)		(4		)	(1		)
Noninterest expense	3,944			1,324				78			5,346
Income (loss) before income taxes	$	2,033		$	526		(a)	$	(95	)	$	2,464		(a)
Pre-tax operating margin (b)	34		%	28		%		N/M			32		%
Average assets	$	260,432		$	30,819			$	48,041		$	339,292

(a) Total fee and other revenue includes net income from consolidated investment management funds of $22 million, representing $36 million of income and noncontrolling interests of $14 million. Total revenue and income before income taxes are net of noncontrolling interests of $14 million.

(b) Income before income taxes divided by total revenue.

N/M - Not meaningful.

Note 20–Supplemental information to the Consolidated Statement of Cash Flows

Non-cash investing and financing transactions that, appropriately, are not reflected in the consolidated statement of cash flows are listed below.

Non-cash investing and financing transactions	Six months ended June 30,
(in millions)	2020		2019
Change in assets of consolidated investment management funds	$	215	$	76
Change in liabilities of consolidated investment management funds	3		4
Change in nonredeemable noncontrolling interests of consolidated investment management funds	10		65
Securities purchased not settled	1,730		1,113
Securities matured not settled	—		10
Premises and equipment/capitalized software funded by finance lease obligations	—		14
Premises and equipment/operating lease obligations	66		1,272		(a)
Investment redemptions not settled	—		—

 

(a) Includes $1,244 million related to the adoption of ASU 2016-02, Leases, and $28 million related to new or modified leases.

104 BNY Mellon

Item 4. Controls and Procedures

Disclosure controls and procedures

Our management, including the Chief Executive Officer and Chief Financial Officer, with participation by the members of the Disclosure Committee, has responsibility for ensuring that there is an adequate and effective process for establishing, maintaining, and evaluating disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in our SEC reports is timely recorded, processed, summarized and reported and that information required to be disclosed by BNY Mellon is accumulated and communicated to BNY Mellon’s management to allow timely decisions regarding the required disclosure. In addition, our ethics hotline can also be used by employees and others for the anonymous communication of concerns about financial controls or reporting matters. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

As of the end of the period covered by this report, an evaluation was carried out under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective.

Changes in internal control over financial reporting

In the ordinary course of business, we may routinely modify, upgrade or enhance our internal controls and procedures for financial reporting. There have not been any changes in our internal control over financial reporting as defined in Rule 13a-15(f) of the Exchange Act during the second quarter of 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

BNY Mellon 105

Forward-looking Statements

Some statements in this Quarterly Report are forward-looking. These include all statements about the usefulness of Non-GAAP measures, the future results of BNY Mellon, our businesses, financial, liquidity and capital condition, results of operations, liquidity, risk and capital management and processes, goals, strategies, outlook, objectives, expectations (including those regarding our performance results, expenses, nonperforming assets, products, impacts of currency fluctuations, impacts of money market fee waivers, impacts of trends on our businesses, regulatory, technology, market, economic or accounting developments and the impacts of such developments on our businesses, legal proceedings and other contingencies), effective tax rate, net interest revenue, estimates (including those regarding expenses, losses inherent in our credit portfolios and capital ratios), intentions (including those regarding our capital returns and expenses, including our investments in technology and pension expense), targets, opportunities, potential actions, growth and initiatives, including the potential effects of the coronavirus pandemic on any of the foregoing.

In this report, any other report, any press release or any written or oral statement that BNY Mellon or its executives may make, words, such as “estimate,” “forecast,” “project,” “anticipate,” “likely,” “target,” “expect,” “intend,” “continue,” “seek,” “believe,” “plan,” “goal,” “could,” “should,” “would,” “may,” “might,” “will,” “strategy,” “synergies,” “opportunities,” “trends,” “future,” “potentially,” “outlook” and words of similar meaning, may signify forward-looking statements.

Actual results may differ materially from those expressed or implied as a result of a number of factors, including those discussed in “Risk Factors” in this Quarterly Report and our 2019 Annual Report, such as:

• a communications or technology disruption or failure within our infrastructure or the infrastructure of third parties that results in a loss of information, delays our ability to access information or impacts our ability to provide services to our clients may materially adversely affect our business, financial condition and results of operations;

• a cybersecurity incident, or a failure to protect our computer systems, networks and information and our clients’ information against cybersecurity threats, could result in the theft, loss, unauthorized access to, disclosure, use or

alteration of information, system or network failures, or loss of access to information; any such incident or failure could adversely impact our ability to conduct our businesses, damage our reputation and cause losses;

• our business may be materially adversely affected by operational risk;

• the coronavirus pandemic is adversely affecting us and creates significant risks and uncertainties for our business, and the ultimate impact of the pandemic on us will depend on future developments, which are highly uncertain and cannot be predicted;

• our risk management framework may not be effective in mitigating risk and reducing the potential for losses;

• we are subject to extensive government rulemaking, policies, regulation and supervision; these rules and regulations have, and in the future may, compel us to change how we manage our businesses, which could have a material adverse effect on our business, financial condition and results of operations;

• regulatory or enforcement actions or litigation could materially adversely affect our results of operations or harm our businesses or reputation;

• our businesses may be negatively affected by adverse events, publicity, government scrutiny or other reputational harm;

• failure to satisfy regulatory standards, including “well capitalized” and “well managed” status or capital adequacy and liquidity rules more generally, could result in limitations on our activities and adversely affect our business and financial condition;

• a failure or circumvention of our controls and procedures could have a material adverse effect on our business, reputation, results of operations and financial condition;

• the application of our Title I preferred resolution strategy or resolution under the Title II orderly liquidation authority could adversely affect the Parent’s liquidity and financial condition and the Parent’s security holders;

• impacts from climate change, natural disasters, acts of terrorism, pandemics, global conflicts and other geopolitical events may have a negative impact on our business and operations;

• we are dependent on fee-based business for a substantial majority of our revenue and our fee-based revenues could be adversely affected by slowing in market activity, weak financial markets, underperformance and/or negative

106 BNY Mellon

Forward-looking Statements (continued)

trends in savings rates or in investment preferences;

• weakness and volatility in financial markets and the economy generally may materially adversely affect our business, results of operations and financial condition;

• changes in interest rates and yield curves could have a material adverse effect on our profitability;

• transitions away from and the anticipated replacement of LIBOR and other IBORs could adversely impact our business and results of operations;

• the UK’s withdrawal from the EU may have negative effects on global economic conditions, global financial markets, and our business and results of operations;

• we may experience losses on securities related to volatile and illiquid market conditions, reducing our earnings and impacting our financial condition;

• the failure or perceived weakness of any of our significant clients or counterparties, many of whom are major financial institutions and sovereign entities, and our assumption of credit and counterparty risk, could expose us to loss and adversely affect our business;

• our business, financial condition and results of operations could be adversely affected if we do not effectively manage our liquidity;

• we could incur losses if our allowance for credit losses, including loan and lending-related commitments reserves, is inadequate;

• any material reduction in our credit ratings or the credit ratings of our principal bank subsidiaries, The Bank of New York Mellon or BNY Mellon, N.A., could increase the cost of funding and borrowing to us and our rated subsidiaries and have a material adverse effect on our results of operations and financial condition and on the value of the securities we issue;

• new lines of business, new products and services or transformational or strategic project initiatives may subject us to additional risks, and the failure to implement these initiatives could affect our results of operations;

• we are subject to competition in all aspects of our business, which could negatively affect our ability to maintain or increase our profitability;

• our business may be adversely affected if we are unable to attract and retain employees;

• our strategic transactions present risks and uncertainties and could have an adverse effect on our business, results of operations and financial condition;

• tax law changes or challenges to our tax positions with respect to historical transactions may adversely affect our net income, effective tax rate and our overall results of operations and financial condition;

• our ability to return capital to shareholders is subject to the discretion of our Board of Directors and may be limited by U.S. banking laws and regulations, including those governing capital and the approval of our capital plan, applicable provisions of Delaware law or our failure to pay full and timely dividends on our preferred stock;

• the Parent is a non-operating holding company, and as a result, is dependent on dividends from its subsidiaries and extensions of credit from its IHC to meet its obligations, including with respect to its securities, and to provide funds for share repurchases and payment of dividends to its stockholders; and

• changes in accounting standards governing the preparation of our financial statements and future events could have a material impact on our reported financial condition, results of operations, cash flows and other financial data.

Investors should consider all risk factors discussed in this Quarterly Report and our 2019 Annual Report and any subsequent reports filed with the SEC by BNY Mellon pursuant to the Exchange Act. All forward-looking statements 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. The contents of BNY Mellon’s website or any other website referenced herein are not part of this report.

BNY Mellon 107

Part II - Other Information

Item 1. Legal Proceedings.

The information required by this Item is set forth in the “Legal proceedings” section in Note 18 of the Notes to Consolidated Financial Statements, which portion is incorporated herein by reference in response to this item.

Item 1A. Risk Factors.

The following discussion supplements the discussion of risk factors that could affect our business, financial condition or results of operations set forth in Part I, Item 1A., Risk Factors, on pages 75 through 99 of our 2019 Annual Report. The discussion of Risk Factors, as so supplemented, sets forth our most significant risk factors that could affect our business, financial condition or results of operations. However, other factors, besides those discussed below or in our 2019 Annual Report or other of our reports filed with or furnished to the SEC, also could adversely affect our business, financial condition or results of operations. We cannot assure you that the risk factors described below or elsewhere in this report and such other reports address all potential risks that we may face. These risk factors also serve to describe factors which may cause our results to differ materially from those described in forward-looking statements included herein or in other documents or statements that make reference to this Form 10-Q. See “Forward-looking Statements.”

The coronavirus pandemic is adversely affecting us and creates significant risks and uncertainties for our business, and the ultimate impact of the pandemic on us will depend on future developments, which are highly uncertain and cannot be predicted.

The coronavirus pandemic has negatively affected the global economy, decreased liquidity in fixed income markets, created significant volatility and disruption in financial and equity markets, increased unemployment levels and disrupted businesses in many industries. This has resulted in increased demand on our transaction processing and clearance capabilities in many of our Investment Services businesses and volatility in the levels and mix of the assets under management of our Investment and Wealth Management business. Moreover, governmental actions in response to the pandemic are meaningfully influencing the interest rate environment, which has reduced, and is expected to

continue to reduce, our net interest margin. As a result, we have granted and may continue to grant money market fee waivers. The effects of the pandemic have resulted, and could continue to result, in higher and more volatile provisions for credit losses for financial instruments subject to ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, held by us. The continuing effects of the pandemic could also result in increased credit losses and charge-offs, particularly if our credit exposures continue to increase and as more clients and customers experience credit deterioration, as well as increased risk of other asset write-downs and impairments, including, but not limited to, equity investments, goodwill and intangibles. Any of these events could potentially result in a material adverse impact on our business and results of operations.

In addition, reliance on work-from-home capabilities by us, our clients and other industry participants, as well as the potential inability to maintain critical staff in operational facilities due to stay-at-home orders across jurisdictions, illness and quarantines present heightened cybersecurity, information security and operational risks. Any disruption to our ability to deliver services to our clients and customers could result in potential liability to our clients and customers, regulatory fines, penalties or other sanctions, increased operational costs or harm to our reputation.

The pandemic has resulted in an increase in our balance sheet and volatility in risk-weighted assets, as we experience elevated deposit levels. Moreover, on March 15, 2020, we, along with the other member banks of the Financial Services Forum, announced that we would temporarily suspend share repurchases through the second quarter of 2020 to preserve capital and liquidity in order to further our objective of using our capital and liquidity to support our clients and customers. Further, in June 2020, the Federal Reserve announced that it has required participating CCAR firms, including us, to update and resubmit their capital plans and that, as a result, unless otherwise approved by the Federal Reserve, participating firms would not be permitted, during the third quarter of 2020, to conduct open market common stock repurchases, to increase their common stock dividends or to pay common stock dividends that exceed average net income for the preceding four quarters. The Federal Reserve also stated that it may extend these limitations quarter-by-quarter. Our

108 BNY Mellon

Part II - Other Information (continued)

ability to resume our common stock repurchase program and maintain our common stock dividend depends on factors such as prevailing market conditions, our outlook for the economic environment, the performance of our business, the additional capital analysis required by the Federal Reserve, and whether the Federal Reserve keeps the limitations for the third quarter of 2020 in place for subsequent quarters.

The extent to which the pandemic impacts our business, financial condition, liquidity and results of operations, as well as our regulatory capital, will depend on future developments, which are highly

uncertain and cannot be predicted, including the scope and duration of the pandemic, the effectiveness of our work-from-home arrangements, actions taken by governmental authorities in response to the pandemic, as well as the direct and indirect impact on us, our clients and customers, and third parties. As the pandemic adversely affects the United States or the global economy, or our business, financial condition, liquidity or results of operations, it may also have the effect of heightening many of the other risks described in the section entitled “Risk Factors” in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(c) The following table discloses repurchases of our common stock made in the second quarter of 2020. All of the Company’s preferred stock outstanding has preference over the Company’s common stock with respect to the payment of dividends.

Issuer purchases of equity securities

Share repurchases – second quarter of 2020				Total shares repurchased as  part of a publicly announced plan or program	Maximum approximate dollar value of shares that may yet be purchased under the publicly announced plans or programs at June 30, 2020
(dollars in millions, except per share amounts; common shares in thousands)	Total shares repurchased	Average price per share
April 2020	48	$	45.41	48		$	931
May 2020	7	35.66		7		931
June 2020	6	38.28		6		N/A
Second quarter of 2020 (a)	61	$	43.59	61		N/A		(b)

(a) Reflects shares repurchased from employees, primarily in connection with the employees’ payment of taxes upon the vesting of restricted stock.

(b) The Federal Reserve has announced that it will conduct additional analysis for all participating CCAR firms later this year and will not allow participating firms to make open market common stock repurchases during the third quarter of 2020. We are permitted to continue to repurchase shares from employees, primarily in connection with the employees’ payment of taxes upon the vesting of restricted stock.

N/A - Not applicable.

In June 2019, in connection with the Federal Reserve’s non-objection to our 2019 capital plan, BNY Mellon announced a share repurchase plan providing for the repurchase of up to $3.94 billion of common stock starting in the third quarter of 2019 and continuing through the second quarter of 2020. This share repurchase plan replaced all previously authorized share repurchase plans.

In March 2020, we and the other members of the Financial Services Forum announced the temporary suspension of share repurchases until the end of the second quarter of 2020 to preserve capital and liquidity in order to further the objective of using capital and liquidity to support clients and customers.

In connection with the Federal Reserve’s release of the CCAR results in June 2020, BNY Mellon announced that it will not conduct open market common stock repurchases in the third quarter of 2020 and will resume the common stock repurchase program as early as possible, depending on factors such as prevailing market conditions, our outlook for the economic environment, the additional capital analysis required by the Federal Reserve, and whether the Federal Reserve keeps the limitations for the third quarter of 2020 in place for subsequent quarters. The Federal Reserve has announced that it will conduct additional analysis for all participating CCAR firms later this year and will not allow participating firms to

BNY Mellon 109

Part II - Other Information (continued)

make open market common stock repurchases during the third quarter of 2020.

Share repurchases may be executed through open market repurchases, in privately negotiated transactions or by other means, including through repurchase plans designed to comply with Rule 10b5-1 and other derivative, accelerated share

repurchase and other structured transactions. The timing and exact amount of any common stock repurchases will depend on various factors, including market conditions and the common stock trading price; the Company’s capital position, liquidity and financial performance; alternative uses of capital; and legal and regulatory considerations.

Item 6. Exhibits.

The list of exhibits required to be filed as exhibits to this report appears below.

110 BNY Mellon

Index to Exhibits

Exhibit No.	Description	Method of Filing
3.1	Restated Certificate of Incorporation of The Bank of New York Mellon Corporation.	Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 000-52710) as filed with the Commission on July 2, 2007, and incorporated herein by reference.
3.2	Certificate of Designations of The Bank of New York Mellon Corporation with respect to Series A Noncumulative Preferred Stock, dated June 15, 2007.	Previously filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 000-52710) as filed with the Commission on July 5, 2007, and incorporated herein by reference.
3.3	Certificate of Designations of The Bank of New York Mellon Corporation with respect to Series C Noncumulative Perpetual Preferred Stock, dated Sept. 13, 2012.	Previously filed as Exhibit 3.2 to the Company’s Registration Statement on Form 8A12B (File No. 001-35651) as filed with the Commission on Sept. 14, 2012, and incorporated herein by reference.
3.4	Certificate of Designations of The Bank of New York Mellon Corporation with respect to the Series D Noncumulative Perpetual Preferred Stock, dated May 16, 2013.	Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on May 16, 2013, and incorporated herein by reference.
3.5	Certificate of Designations of The Bank of New York Mellon Corporation with respect to the Series E Noncumulative Perpetual Preferred Stock, dated April 27, 2015.	Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on April 28, 2015, and incorporated herein by reference.
3.6	Certificate of Designations of The Bank of New York Mellon Corporation with respect to the Series F Noncumulative Perpetual Preferred Stock, dated July 29, 2016.	Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on Aug. 1, 2016, and incorporated herein by reference.
3.7	Certificate of Designations of The Bank of New York Mellon Corporation with respect to the Series G Noncumulative Perpetual Preferred Stock, dated May 15, 2020.	Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on May 19, 2020, and incorporated herein by reference.
3.8	Certificate of Amendment to the Company’s Restated Certificate of Incorporation, as filed with the Secretary of State of the State of Delaware on April 9, 2019.	Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on April 10, 2019, and incorporated herein by reference.

BNY Mellon 111

Index to Exhibits (continued)

Exhibit No.	Description	Method of Filing
3.9	Amended and Restated By-Laws of The Bank of New York Mellon Corporation, as amended and restated on Feb. 12, 2018.	Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on Feb. 13, 2018, and incorporated herein by reference.
4.1	None of the instruments defining the rights of holders of long-term debt of the Parent or any of its subsidiaries represented long-term debt in excess of 10% of the total assets of the Company as of June 30, 2020. The Company hereby agrees to furnish to the Commission, upon request, a copy of any such instrument.	N/A
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith.
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith.
32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Furnished herewith.
32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Furnished herewith.
101.INS	Inline XBRL Instance Document.	The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.	Filed herewith.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.	Filed herewith.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.	Filed herewith.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.	Filed herewith.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.	Filed herewith.
104	The cover page of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in inline XBRL.	The cover page interactive data file is embedded within the inline XBRL document and included in Exhibit 101.

112 BNY Mellon

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

THE BANK OF NEW YORK MELLON CORPORATION

(Registrant)

Date: August 6, 2020	By:	/s/ Kurtis R. Kurimsky
		Kurtis R. Kurimsky
		Corporate Controller
		(Duly Authorized Officer and
		Principal Accounting Officer of
		the Registrant)

BNY Mellon 113

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Thomas P. Gibbons, certify that:

1. I have reviewed this quarterly report on Form 10-Q of The Bank of New York Mellon Corporation (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2020

/s/ Thomas P. Gibbons

Name: Thomas P. Gibbons

Title: Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Emily Portney, certify that:

1. I have reviewed this quarterly report on Form 10-Q of The Bank of New York Mellon Corporation (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2020

/s/ Emily Portney

Name: Emily Portney

Title: Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

Pursuant to 18 U.S.C. Section 1350, the undersigned officer of The Bank of New York Mellon Corporation (“BNY Mellon”), hereby certifies, to his knowledge, that BNY Mellon’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of BNY Mellon.

Dated: August 6, 2020	/s/ Thomas P. Gibbons
	Name:	Thomas P. Gibbons
	Title:	Chief Executive Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

CERTIFICATION

Pursuant to 18 U.S.C. Section 1350, the undersigned officer of The Bank of New York Mellon Corporation (“BNY Mellon”), hereby certifies, to his knowledge, that BNY Mellon’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of BNY Mellon.

Dated: August 6, 2020	/s/ Emily Portney
	Name:	Emily Portney
	Title:	Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2020 shares
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2020
Document Transition Report	false
Entity File Number	001-35651
Entity Registrant Name	THE BANK OF NEW YORK MELLON CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	13-2614959
Entity Address, Address Line One	240 Greenwich Street
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10286
City Area Code	212
Local Phone Number	495-1784
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (shares)	885,861,714
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001390777
Current Fiscal Year End Date	--12-31
Common Stock, $0.01 par value | New York Stock Exchange
Document Information [Line Items]
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	BK
Security Exchange Name	NYSE
Series C Noncumulative Perpetual Preferred Stock | New York Stock Exchange
Document Information [Line Items]
Title of 12(b) Security	Depositary Shares, each representing 1/4,000th of a share of Series C Noncumulative Perpetual Preferred Stock
Trading Symbol	BK PrC
Security Exchange Name	NYSE
6.244% Fixed-to-Floating Rate Normal Preferred Capital Securities of Mellon Capital IV | New York Stock Exchange
Document Information [Line Items]
Title of 12(b) Security	6.244% Fixed-to-Floating Rate Normal Preferred Capital Securities of Mellon Capital IV
Trading Symbol	BK/P
Security Exchange Name	NYSE

XML

Consolidated Income Statement (unaudited) - USD ($) shares in Thousands, $ in Millions		3 Months Ended			6 Months Ended
		Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020		Jun. 30, 2019
Fee and other revenue
Asset servicing fees		$ 1,173	$ 1,159	$ 1,141	$ 2,332		$ 2,263
Clearing services fees		431	470	410	901		808
Issuer services fees		277	263	291	540		542
Treasury services fees		144	149	140	293		272
Total investment services fees		2,025	2,041	1,982	4,066		3,885
Investment management and performance fees		786	862	833	1,648		1,674
Foreign exchange and other trading revenue		166	319	166	485		336
Financing-related fees		58	59	50	117		101
Distribution and servicing		27	31	31	58		62
Investment and other income		105	11	43	116		78
Total fee revenue		3,167	3,323	3,105	6,490		6,136
Net securities gains		9	9	7	18		8
Total fee and other revenue		3,176	3,332	3,112	6,508		6,144
Operations of consolidated investment management funds
Investment income (loss)		54	(38)	10	16		36
Interest of investment management fund note holders		0	0	0	0		0
Income (loss) from consolidated investment management funds		54	(38)	10	16		36
Net interest revenue
Interest revenue		943	1,570	1,965	2,513		3,885
Interest expense		163	756	1,163	919		2,242
Net interest revenue		780	814	802	1,594		1,643
Total revenue		4,010	4,108	3,924	8,118		7,823
Provision for credit losses		143	169	(8)	312	[1]	(1)	[1]
Noninterest expense
Staff		1,464	1,482	1,421	2,946		2,945
Software and equipment		345	326	304	671		587
Professional, legal and other purchased services		337	330	337	667		662
Net occupancy		137	135	138	272		275
Sub-custodian and clearing		120	105	115	225		220
Distribution and servicing		85	91	94	176		185
Bank assessment charges		35	35	31	70		62
Business development		20	42	56	62		101
Amortization of intangible assets		26	26	30	52		59
Other		117	140	121	257		250
Total noninterest expense		2,686	2,712	2,647	5,398		5,346
Income
Income before income taxes		1,181	1,227	1,285	2,408		2,478
Provision for income taxes		216	265	264	481		501
Net income		965	962	1,021	1,927		1,977
Net (income) loss attributable to noncontrolling interests related to consolidated investment management funds		(15)	18	(4)	3		(14)
Net income applicable to shareholders of The Bank of New York Mellon Corporation		950	980	1,017	1,930		1,963
Preferred stock dividends		(49)	(36)	(48)	(85)		(84)
Net income applicable to common shareholders of The Bank of New York Mellon Corporation		901	944	969	1,845		1,879
Net income applicable to common shareholders of The Bank of New York Mellon Corporation used for the earnings per share calculation
Net income applicable to common shareholders of The Bank of New York Mellon Corporation		901	944	969	1,845		1,879
Less: Earnings allocated to participating securities		1	3	4	4		9
Net income applicable to common shareholders of The Bank of New York Mellon Corporation after required adjustment for the calculation of basic and diluted earnings per common share		$ 900	$ 941	$ 965	$ 1,841		$ 1,870
Average common shares and equivalents outstanding of The Bank of New York Mellon Corporation
Basic (shares)		889,020	894,122	951,281	891,642		956,887
Common stock equivalents (shares)		2,044	3,941	3,891	2,866		4,894
Less: Participating securities (shares)		(503)	(1,374)	(1,244)	(905)		(1,824)
Diluted (shares)		890,561	896,689	953,928	893,603		959,957
Anti-dilutive securities (shares)	[2]	1,578	2,584	3,999	2,052		4,704
Earnings per share applicable to the common shareholders of The Bank of New York Mellon Corporation
Basic (usd per share)		$ 1.01	$ 1.05	$ 1.01	$ 2.06		$ 1.95
Diluted (usd per share)		$ 1.01	$ 1.05	$ 1.01	$ 2.06		$ 1.95

[1] In the first quarter of 2020, we adopted new accounting guidance included in ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, on a prospective basis. See Note 2 of the Notes to Consolidated Financial Statements for additional information.

[2] Represents stock options, restricted stock, restricted stock units and participating securities outstanding but not included in the computation of diluted average common shares because their effect would be anti-dilutive.

XML

Consolidated Comprehensive Income Statement (unaudited) - USD ($) $ in Millions		3 Months Ended			6 Months Ended
		Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement of Comprehensive Income [Abstract]
Net income		$ 965	$ 962	$ 1,021	$ 1,927	$ 1,977
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		115	(369)	10	(254)	39
Unrealized gain on assets available-for-sale:
Unrealized gain arising during the period		753	183	287	936	526
Reclassification adjustment		(7)	(7)	(5)	(14)	(6)
Total unrealized gain on assets available-for-sale		746	176	282	922	520
Defined benefit plans:
Net (loss) arising during the period		0	0	0	0	(9)
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost		19	18	10	37	20
Total defined benefit plans		19	18	10	37	11
Net unrealized gain (loss) on cash flow hedges		4	(11)	0	(7)	5
Total other comprehensive income (loss), net of tax	[1]	884	(186)	302	698	575
Total comprehensive income		1,849	776	1,323	2,625	2,552
Total comprehensive income		(15)	18	(4)	3	(14)
Other comprehensive loss (income) attributable to noncontrolling interests		0	2	0	2	(2)
Comprehensive income applicable to shareholders of The Bank of New York Mellon Corporation		1,834	796	1,319	2,630	2,536
Other comprehensive (loss) income attributable to The Bank of New York Mellon Corporation shareholders		$ 884	$ (184)	$ 302	$ 700	$ 573

[1] Other comprehensive income (loss) attributable to The Bank of New York Mellon Corporation shareholders was $884 million for the quarter ended June 30, 2020, $(184) million for the quarter ended March 31, 2020, $302 million for the quarter ended June 30, 2019, $700 million for the six months ended June 30, 2020 and $573 million for the six months ended June 30, 2019.

XML

Consolidated Balance Sheet (unaudited) - USD ($) $ in Millions		Jun. 30, 2020		Dec. 31, 2019
Securities:
Held-to-maturity (including allowance for credit losses of less than $1 at June 30, 2020; fair value of $45,983 and $34,805)		$ 44,615		$ 34,483
Available-for-sale (including allowance for credit losses of $12 at June 30, 2020; amortized cost of $106,668 and $87,435)		110,067		88,550
Goodwill		17,253		17,386
Intangible assets		3,045		3,107
Other assets (including allowance for credit losses on accounts receivable of $4 at June 30, 2020, also includes $529 and $419, at fair value)		21,306		20,221
Total assets		442,316		381,508
Deposits:
Total liabilities		398,350		339,780
Temporary equity
Redeemable noncontrolling interests		157		143
Permanent equity
Preferred stock – par value $0.01 per share; authorized 100,000,000 shares; issued 45,826 and 35,826 shares		4,532		3,542
Common stock – par value $0.01 per share; authorized 3,500,000,000 shares; issued 1,381,361,699 and 1,374,443,376 shares		14		14
Additional paid-in capital		27,702		27,515
Retained earnings		33,224		31,894
Accumulated other comprehensive loss, net of tax		(1,943)		(2,638)
Less: Treasury stock of 495,499,985 and 473,760,338 common shares, at cost		(19,832)		(18,844)
Total The Bank of New York Mellon Corporation shareholders’ equity		43,697		41,483
Nonredeemable noncontrolling interests of consolidated investment management funds		112		102
Total permanent equity	[2]	43,809	[1]	41,585	[3]
Total liabilities, temporary equity and permanent equity		442,316		381,508
Investment Management funds
Securities:
Trading assets		450		229
Assets of consolidated investment management funds, at fair value		460		245
Deposits:
Liabilities of consolidated investment management funds, at fair value		4		1
Operating segments
Assets
Cash and due from banks (including allowance for credit losses of $4 at June 30, 2020)	[4]	4,776		4,830
Interest-bearing deposits with the Federal Reserve and other central banks		112,728		95,042
Interest-bearing deposits with banks (including allowance for credit losses of $1 at June 30, 2020; $2,210 and $2,437 is restricted)	[4]	18,045		14,811
Federal funds sold and securities purchased under resale agreements (including allowance for credit losses of $(-) at June 30, 2020)		36,638		30,182
Securities:
Held-to-maturity (including allowance for credit losses of less than $1 at June 30, 2020; fair value of $45,983 and $34,805)	[4]	44,615		34,483
Available-for-sale (including allowance for credit losses of $12 at June 30, 2020; amortized cost of $106,668 and $87,435)	[4]	110,067		88,550
Total securities		154,682		123,033
Trading assets		14,150		13,571
Loans		55,397		54,953
Allowance for credit losses	[4]	(302)		(122)
Net loans		55,095		54,831
Premises and equipment		3,598		3,625
Accrued interest receivable		540		624
Goodwill		17,253		17,386
Intangible assets		3,045		3,107
Other assets (including allowance for credit losses on accounts receivable of $4 at June 30, 2020, also includes $529 and $419, at fair value)	[4]	21,306		20,221
Total assets		441,856		381,263
Deposits:
Noninterest-bearing (principally U.S. offices)		78,100		57,630
Interest-bearing deposits in U.S. offices		121,242		101,542
Interest-bearing deposits in non-U.S. offices		106,128		100,294
Total deposits		305,470		259,466
Federal funds purchased and securities sold under repurchase agreements		14,512		11,401
Trading liabilities		5,595		4,841
Payables to customers and broker-dealers		25,012		18,758
Commercial paper		665		3,959
Other borrowed funds		1,628		599
Accrued taxes and other expenses		5,029		5,642
Other liabilities (including allowance for credit losses on lending-related commitments of $152 and $94, also includes $964 and $607, at fair value)	[4]	12,869		7,612
Long-term debt (includes $399 and $387, at fair value)		27,566		27,501
Total liabilities		398,346		339,779
Operating segments | Investment Management funds
Securities:
Assets of consolidated investment management funds, at fair value		460		245
Deposits:
Liabilities of consolidated investment management funds, at fair value		$ 4		$ 1

[1] Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,603 million at March 31, 2020 and $39,165 million at June 30, 2020.

[2] Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,941 million at Dec. 31, 2019 and $39,165 million at June 30, 2020.

[3] Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,941 million at Dec. 31, 2019 and $37,603 million at March 31, 2020.

[4] In the first quarter of 2020, we adopted new accounting guidance included in ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, on a prospective basis. See Note 2 of the Notes to Consolidated Financial Statements for additional information.

XML

Consolidated Balance Sheet (unaudited) (Parenthetical) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Restricted cash	$ 2,000,000,000	$ 2,000,000,000
Debt securities, held-to-maturity, fair value	45,983,000,000	34,805,000,000
Debt securities, available-for-sale, allowance for credit loss	12,000,000
Debt securities, available-for-sale, amortized cost	106,668,000,000	87,435,000,000
Long-term debt, fair value	$ 399,000,000	$ 387,000,000
Preferred stock, par value (usd per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (shares)	100,000,000	100,000,000
Preferred stock, issued (shares)	45,826	35,826
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, authorized (shares)	3,500,000,000	3,500,000,000
Common stock, issued (shares)	1,381,361,699	1,374,443,376
Treasury stock, common shares (shares)	495,499,985	473,760,338
Operating segments
Cash and due from banks, allowance for credit loss	$ 4,000,000
Interest-bearing deposits with banks, allowance for credit losses	1,000,000
Restricted cash	2,210,000,000	$ 2,437,000,000
Federal funds sold and securities purchased under resale agreements, allowance for credit losses	0
Debt securities, held-to-maturity, allowance for credit loss (less than)	0
Debt securities, held-to-maturity, fair value	45,983,000,000	34,805,000,000
Debt securities, available-for-sale, allowance for credit loss	12,000,000
Debt securities, available-for-sale, amortized cost	106,668,000,000	87,435,000,000
Other assets, allowance for credit loss on accounts receivable	4,000,000
Other assets, fair value	529,000,000	419,000,000
Allowance for credit losses on lending related commitments	152,000,000	94,000,000
Other liabilities, fair value	964,000,000	607,000,000
Long-term debt, fair value	$ 399,000,000	$ 387,000,000

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Consolidated Statement of Cash Flows (unaudited) - USD ($) $ in Millions		6 Months Ended
		Jun. 30, 2020	Jun. 30, 2019
Operating activities
Net income		$ 1,927	$ 1,977
Net loss (income) attributable to noncontrolling interests		3	(14)
Net income applicable to shareholders of The Bank of New York Mellon Corporation		1,930	1,963
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Provision for credit losses	[1]	312	(1)
Pension plan contributions		(12)	(22)
Depreciation and amortization		744	635
Deferred tax (benefit)		(363)	(110)
Net securities (gains)		(18)	(8)
Change in trading assets and liabilities		171	(1,306)
Change in accruals and other, net		2,361	(3,665)
Net cash provided by (used for) operating activities		5,125	(2,514)
Investing activities
Change in interest-bearing deposits with banks		(3,710)	(1,618)
Change in interest-bearing deposits with the Federal Reserve and other central banks		(18,117)	(1,714)
Purchases of securities held-to-maturity		(14,499)	(3,739)
Paydowns of securities held-to-maturity		3,541	2,078
Maturities of securities held-to-maturity		1,836	1,380
Purchases of securities available-for-sale		(44,865)	(21,503)
Sales of securities available-for-sale		8,414	6,346
Paydowns of securities available-for-sale		4,416	3,226
Maturities of securities available-for-sale		12,241	14,143
Net change in loans		(610)	4,116
Sales of loans and other real estate		2	52
Change in federal funds sold and securities purchased under resale agreements		(6,516)	(14,401)
Net change in seed capital investments		19	25
Purchases of premises and equipment/capitalized software		(623)	(717)
Other, net		(275)	940
Net cash (used for) investing activities		(58,746)	(11,386)
Financing activities
Change in deposits		47,576	14,255
Change in federal funds purchased and securities sold under repurchase agreements		3,155	(2,486)
Change in payables to customers and broker-dealers		6,260	(778)
Change in other borrowed funds		1,036	(1,328)
Change in commercial paper		(3,294)	6,955
Net proceeds from the issuance of long-term debt		2,246	1,248
Repayments of long-term debt		(3,000)	(2,750)
Proceeds from the exercise of stock options		33	35
Issuance of common stock		6	16
Issuance of preferred stock		990	0
Treasury stock acquired		(988)	(1,305)
Common cash dividends paid		(560)	(540)
Preferred cash dividends paid		(85)	(84)
Other, net		15	7
Net cash provided by financing activities		53,390	13,245
Effect of exchange rate changes on cash		(50)	(11)
Change in cash and due from banks and restricted cash
Change in cash and due from banks and restricted cash		(281)	(666)
Cash and due from banks and restricted cash at beginning of period		7,267	8,258
Cash and due from banks and restricted cash at end of period		6,986	7,592
Cash and due from banks and restricted cash at end of period		6,986	7,592
Supplemental disclosures
Interest paid		1,013	2,238
Income taxes paid		756	461
Income taxes refunded		$ 11	$ 347

[1] In the first quarter of 2020, we adopted new accounting guidance included in ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, on a prospective basis. See Note 2 of the Notes to Consolidated Financial Statements for additional information.

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Consolidated Statement of Changes in Equity (unaudited) - USD ($) $ in Millions	Total		Preferred stock	Common stock	Additional paid-in capital	Retained earnings	Accumulated other comprehensive (loss), net of tax	Treasury stock	Non-redeemable noncontrolling interests of consolidated investment management funds	Redeemable non- controlling interests/ temporary equity	Cumulative Effect, Period Of Adoption, Adjustment	Cumulative Effect, Period Of Adoption, Adjustment Retained earnings	Cumulative Effect, Period Of Adoption, Adjustment Accumulated other comprehensive (loss), net of tax	Cumulative Effect, Period of Adoption, Adjusted Balance	Cumulative Effect, Period of Adoption, Adjusted Balance Preferred stock	Cumulative Effect, Period of Adoption, Adjusted Balance Common stock	Cumulative Effect, Period of Adoption, Adjusted Balance Additional paid-in capital	Cumulative Effect, Period of Adoption, Adjusted Balance Retained earnings	Cumulative Effect, Period of Adoption, Adjusted Balance Accumulated other comprehensive (loss), net of tax	Cumulative Effect, Period of Adoption, Adjusted Balance Treasury stock	Cumulative Effect, Period of Adoption, Adjusted Balance Non-redeemable noncontrolling interests of consolidated investment management funds	Cumulative Effect, Period of Adoption, Adjusted Balance Redeemable non- controlling interests/ temporary equity
Dividends:
The Bank of New York Mellon Corporation shareholders’ equity				$ 37,096
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201602Member
Beginning balance at Dec. 31, 2018	$ 40,739	[1]	$ 3,542	14	$ 27,118	$ 28,652	$ (3,171)	$ (15,517)	$ 101	$ 129	$ 0	$ 90	$ (90)	$ 40,739	$ 3,542	$ 14	$ 27,118	$ 28,742	$ (3,261)	$ (15,517)	$ 101	$ 129
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued to shareholders of noncontrolling interests										36
Redemption of subsidiary shares from noncontrolling interests										(7)
Other net changes in noncontrolling interests	72				21				51	(24)
Net income	1,977					1,963			14
Other comprehensive (loss) income attributable to The Bank of New York Mellon Corporation shareholders	573						573
Other comprehensive income (loss)	2									2
Dividends:
Common stock	(540)					(540)
Preferred stock	(84)					(84)
Repurchase of common stock	(1,305)							(1,305)
Common stock issued under employee benefit plans	16				16
Direct stock purchase and dividend reinvestment plan	11				11
Stock awards and options exercised	240				240
Ending balance at Jun. 30, 2019	$ 41,699	[1],[2]	3,542	14	27,406	30,081	(2,688)	(16,822)	166	136
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201613Member
Beginning balance at Dec. 31, 2018	$ 40,739	[1]	3,542	14	27,118	28,652	(3,171)	(15,517)	101	129	0	90	(90)	40,739	3,542	14	27,118	28,742	(3,261)	(15,517)	101	129
Ending balance at Dec. 31, 2019	41,585	[3],[4]	3,542	14	27,515	31,894	(2,638)	(18,844)	102	143	40	45	(5)	41,625	3,542	14	27,515	31,939	(2,643)	(18,844)	102	143
Dividends:
The Bank of New York Mellon Corporation shareholders’ equity				37,683
Beginning balance at Mar. 31, 2019	41,347	[2]	3,542	14	27,349	29,382	(2,990)	(16,072)	122	122
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued to shareholders of noncontrolling interests										16
Other net changes in noncontrolling interests	42				2				40	(2)
Net income	1,021					1,017			4
Other comprehensive (loss) income attributable to The Bank of New York Mellon Corporation shareholders	302						302
Other comprehensive income (loss)	0
Dividends:
Common stock	(270)					(270)
Preferred stock	(48)					(48)
Repurchase of common stock	(750)							(750)
Common stock issued under employee benefit plans	6				6
Stock awards and options exercised	49				49
Ending balance at Jun. 30, 2019	41,699	[1],[2]	3,542	14	27,406	30,081	(2,688)	(16,822)	166	136
Dividends:
The Bank of New York Mellon Corporation shareholders’ equity				37,991
The Bank of New York Mellon Corporation shareholders’ equity	41,483			37,941
Beginning balance at Dec. 31, 2019	41,585	[3],[4]	3,542	14	27,515	31,894	(2,638)	(18,844)	102	143	40	45	(5)	41,625	3,542	14	27,515	31,939	(2,643)	(18,844)	102	143
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued to shareholders of noncontrolling interests										17
Redemption of subsidiary shares from noncontrolling interests										(16)
Other net changes in noncontrolling interests	5				(5)				10	(2)
Net income	962					980			(18)
Other comprehensive (loss) income attributable to The Bank of New York Mellon Corporation shareholders	(184)						(184)
Other comprehensive income (loss)	(2)									(2)
Dividends:
Common stock	(282)					(282)
Preferred stock	(36)					(36)
Repurchase of common stock	(985)							(985)
Common stock issued under employee benefit plans	9				9
Stock awards and options exercised	125				125
Ending balance at Mar. 31, 2020	$ 41,239	[3],[5]	3,542	14	27,644	32,601	(2,827)	(19,829)	94	140
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201613Member
Beginning balance at Dec. 31, 2019	$ 41,585	[3],[4]	3,542	14	27,515	31,894	(2,638)	(18,844)	102	143	$ 40	$ 45	$ (5)	$ 41,625	$ 3,542	$ 14	$ 27,515	$ 31,939	$ (2,643)	$ (18,844)	$ 102	$ 143
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued to shareholders of noncontrolling interests										34
Redemption of subsidiary shares from noncontrolling interests										(16)
Other net changes in noncontrolling interests	8				(5)				13	(2)
Net income	1,927					1,930			(3)
Other comprehensive (loss) income attributable to The Bank of New York Mellon Corporation shareholders	700						700
Other comprehensive income (loss)	(2)									(2)
Dividends:
Common stock	(560)					(560)
Preferred stock	(85)					(85)
Repurchase of common stock	(988)							(988)
Common stock issued under employee benefit plans	15				15
Preferred stock issued	990		990
Stock awards and options exercised	177				177
Ending balance at Jun. 30, 2020	43,809	[4],[5]	4,532	14	27,702	33,224	(1,943)	(19,832)	112	157
Dividends:
The Bank of New York Mellon Corporation shareholders’ equity				37,603
Beginning balance at Mar. 31, 2020	41,239	[3],[5]	3,542	14	27,644	32,601	(2,827)	(19,829)	94	140
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued to shareholders of noncontrolling interests										17
Other net changes in noncontrolling interests	3								3
Net income	965					950			15
Other comprehensive (loss) income attributable to The Bank of New York Mellon Corporation shareholders	884						884
Other comprehensive income (loss)	0
Dividends:
Common stock	(278)					(278)
Preferred stock	(49)					(49)
Repurchase of common stock	(3)							(3)
Common stock issued under employee benefit plans	6				6
Preferred stock issued	990		990
Stock awards and options exercised	52				52
Ending balance at Jun. 30, 2020	43,809	[4],[5]	$ 4,532	14	$ 27,702	$ 33,224	$ (1,943)	$ (19,832)	$ 112	$ 157
Dividends:
The Bank of New York Mellon Corporation shareholders’ equity	$ 43,697			$ 39,165

[1] Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,096 million at Dec. 31, 2018 and $37,991 million at June 30, 2019.

[2] Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,683 million at March 31, 2019 and $37,991 million at June 30, 2019.

[3] Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,941 million at Dec. 31, 2019 and $37,603 million at March 31, 2020.

[4] Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,941 million at Dec. 31, 2019 and $39,165 million at June 30, 2020.

[5] Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,603 million at March 31, 2020 and $39,165 million at June 30, 2020.

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Consolidated Statement of Changes in Equity (unaudited) (Parenthetical) - $ / shares	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement of Stockholders' Equity [Abstract]
Dividends on common stock, cash paid (usd per share)	$ 0.31	$ 0.31	$ 0.28	$ 0.62	$ 0.56

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Basis of presentation

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Basis of presentation

Basis of presentation

In this Quarterly Report on Form 10-Q, references to “our,” “we,” “us,” “BNY Mellon,” the “Company” and similar terms refer to The Bank of New York Mellon Corporation and its consolidated subsidiaries. The term “Parent” refers to The Bank of New York Mellon Corporation but not its subsidiaries.

Basis of presentation

The accounting and financial reporting policies of BNY Mellon, a global financial services company, conform to U.S. generally accepted accounting principles (“GAAP”) and prevailing industry practices. For information on our significant accounting and reporting policies, see Note 1 in our 2019 Annual Report.

The accompanying consolidated financial statements are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of financial position, results of operations and cash flows for the periods presented have been made. These financial statements should be read in conjunction with our 2019 Annual Report. Certain immaterial reclassifications have been made to prior periods to place them on a basis comparable with the current period presentation.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates based upon assumptions about future economic and market conditions which affect reported amounts and related disclosures in our financial statements. Although our current estimates contemplate current conditions and how we expect them to change in the future, it is reasonably possible that actual conditions could be worse than anticipated in those estimates, which could materially affect our results of operations and financial condition.

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Accounting changes and new accounting guidance

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Accounting changes and new accounting guidance

Accounting changes and new accounting guidance

The following accounting guidance was adopted in the first quarter of 2020.

Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments

In June 2016, the Financial Accounting Standards Board (“FASB”) issued an ASU, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments. This ASU introduces a new current expected credit losses model, which applies to financial assets subject to credit losses and measured at amortized cost, including held-to-maturity securities and certain off-balance sheet credit exposures. The guidance also changes current practice for the impairment model for available-for-sale debt securities by requiring the use of an allowance to record estimated credit losses and subsequent recoveries. The standard requires a cumulative effect of initial application to be recognized in retained earnings at the date of initial application.

In conjunction with adopting the new standard, we developed expected credit loss models and approaches that include consideration of multiple forecast scenarios and other methodologies. On Jan. 1, 2020, we adopted this new accounting guidance on a prospective basis and recognized a $45 million after-tax increase in retained earnings primarily attributable to a reduction to the allowance for credit losses for our commercial lending portfolios. The comparative financial information for prior periods has not been restated. See the Consolidated Balance Sheet and Notes 4 and 5 for the disclosures required by this ASU.

The table below presents the reconciliation of the allowance for credit losses (pre-tax).

Allowance for credit losses
(in millions)
Allowance for credit losses – Dec. 31, 2019	$	216
Impact of adopting ASU 2016-13:
Securities	7
Loans (a)	(69		)
Other	3
Total impact of adoption of ASU 2016-13	(59		)
Reclassification of credit-related reserves on accounts receivable	4
Allowance for credit losses – Jan. 1, 2020	$	161

(a) Includes $48 million related to loans and $21 million for lending-related commitments.

Significant accounting policies

Loans

Loans are reported at amortized cost, net of any unearned income and deferred fees and costs. Certain loan origination and upfront commitment fees, as well as certain direct loan origination and commitment costs, are deferred and amortized as a yield adjustment over the lives of the related loans. Loans held for sale are carried at the lower of cost or fair value.

Troubled debt restructuring/loan modifications

A modified loan is considered a troubled debt restructuring (“TDR”) if the debtor is experiencing financial difficulties and the creditor grants a concession to the debtor that would not otherwise be considered. A TDR may include a transfer of real estate or other assets from the debtor to the creditor, or a modification of the term of the loan. Credit losses related to TDRs are accounted for under an individual evaluation methodology (see “Allowance for credit losses” below). Credit losses for anticipated TDRs are accounted for similarly to TDRs and are identified when there is a reasonable expectation that a TDR will be executed with the borrower and when we expect the modification to affect the timing or amount of payments and/or the payment term.

Due to the coronavirus pandemic, there have been two forms of relief provided for classifying loans as TDRs: The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and the Interagency Guidance (as defined below). Financial institutions

may account for eligible loan modifications either under the CARES Act or the Interagency Guidance. The Company has elected to apply both the CARES Act and the Interagency Guidance, as applicable, in providing borrowers with loan modification relief in response to the coronavirus pandemic.

The CARES Act, which became law on March 27, 2020, provides that financial institutions may, subject to certain conditions, elect to temporarily suspend the U.S. GAAP requirements with respect to loan modifications related to the coronavirus pandemic that were current as of Dec. 31, 2019 and that would otherwise be identified and treated as TDRs.

This TDR relief is applicable to modifications that were made from March 1, 2020 until the earlier of Dec. 31, 2020 or 60 days from the date the national emergency related to the coronavirus pandemic officially ends.

Various banking regulators issued guidance in the April 7, 2020 “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (revised)” (“Interagency Guidance”) on loan modification treatment pursuant to which financial institutions can apply the U.S. GAAP requirements for loan modifications. In accordance with this guidance, a loan modification is not considered a TDR if the modification is related to the coronavirus pandemic, the borrower had been current when the modification program was implemented, and the modification includes payment deferrals for not more than 6 months.

Nonperforming assets

Commercial loans are placed on nonaccrual status when principal or interest is past due 90 days or more, or when there is reasonable doubt that interest or principal will be collected.

When a first or second lien residential mortgage loan reaches 90 days delinquent, it is subject to an individual evaluation of credit loss and placed on nonaccrual status.

When a loan is placed on nonaccrual status, previously accrued and uncollected interest is reversed against current period interest revenue. Interest receipts on nonaccrual loans are recognized as interest revenue or are applied to principal when

we believe the ultimate collectability of principal is in doubt. Nonaccrual loans generally are restored to an accrual basis when principal and interest become current and remain current for a specified period.

“Allowance for credit losses” below provides additional information regarding the individual evaluation of credit losses for nonperforming loans.

Allowance for credit losses

The accounting policy for estimating credit losses related to financial assets measured at amortized cost, including loans and lending-related commitments changed beginning in the first quarter of 2020 as a result of the adoption of ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments. This ASU also included targeted amendments with respect to credit losses for available-for-sale debt securities. The accounting policy for determining the allowances has been identified as a “critical accounting estimate” as it requires us to make numerous complex and subjective estimates and assumptions relating to amounts which are judgmental and inherently uncertain.

Credit quality is monitored by management and is reflected within the allowance for credit losses. The allowance represents management’s estimate of expected credit losses over the expected contractual life of the financial instruments as of the balance sheet date. The allowance methodology is designed to provide procedural discipline in assessing the appropriateness of the allowance.

A quantitative methodology and qualitative framework is used to estimate the allowance for credit losses. The qualitative framework is described in further detail within “Allowance for credit losses - Other” below. The quantitative component of our estimate 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 allowance may be determined using various methods, including discounted cash flow methods, loss-rate methods, probability of default methods or other methods that we determine to be appropriate. We estimate our expected credit losses using the

probability of default method for the majority of our financial assets. We measure expected credit losses of financial assets on a collective (pool) basis when similar risk characteristics exist. For a financial asset that does not share risk characteristics with other assets, expected credit losses are measured based on an individual evaluation method.

In our estimate, with the exception of our small home equity line of credit portfolio, available-for-sale debt securities, and individually evaluated financial assets, we utilize a multi-scenario macroeconomic forecast which includes a weighting of baseline, stronger near-term growth and moderate recession scenarios. This approach allows us to develop our estimate using a wide span of economic input variables. Our baseline scenario reflects a view on likely performance of each global region and the other two scenarios are designed relative to the baseline scenario. The scenarios include both a reasonable and supportable forecast period as well as a reversion period. The reasonable and supportable forecast is typically over a two to three-year horizon, followed by a reversion period in which the economic data reverts to long-term historical experience. In general, the forecasts across the alternative economic scenarios tend to revert toward the long-term trends after the forecast period, which is the period in which the confidence interval is considered reasonable and supportable. The speed at which the scenario specific forecasts revert is based on observed historical patterns of mean reversion that are reflected in our model parameter estimates. Certain macroeconomic variables such as unemployment or home prices take longer to revert after a contraction, though specific recovery times are scenario-specific. Reversion will usually take longer the further away the scenario specific forecast is from the historical mean. On a quarterly basis, within a developed governance structure, we update these scenarios for current economic conditions and may adjust the scenario weighting based on our economic outlook.

Allowance for credit losses - Loans and lending-related commitments

The allowance for credit losses on loans is presented as a valuation allowance to loans, and the allowance for credit losses on lending-related commitments is recorded in other liabilities. The components of the allowance for credit losses on loans and lending-related commitments consist of the following three elements:

• a pooled allowance component for higher risk-rated and pass-rated commercial and institutional credits;

• a pooled allowance component for residential mortgage loans; and

• an asset-specific allowance component involving individually evaluated credits of $1 million or greater.

The first element, a pooled allowance component for higher risk-rated and pass-rated commercial and institutional credits, is based on our expected credit loss model. Individual credit analyses are performed on such loans before being assigned a credit rating. All borrowers are collectively evaluated based on their credit rating. The loss expected in each loan incorporates the borrower’s credit rating, facility rating and maturity. The loss given default, derived from the facility rating, incorporates a recovery expectation, and for unfunded lending exposures, an estimate of the use of the facility at default (usage given default). The borrower’s probability of default is derived from the associated credit rating. For each of the different parameters, specific credit models are developed for each segment of our portfolio, including commercial loans and lease financing, commercial real estate, financial institutions, and other. Segmentation is established based on risk characteristics of the loans and how risk is monitored. We use both internal and external data in the development of these parameters. In estimating the term of the exposures and resulting effect on the measurement of expected credit loss, we consider the impact of potential prepayments as well as the effect of borrower extension options. Borrower ratings are reviewed at least annually and are periodically mapped to third-party databases, including rating agency and default and recovery databases, to ensure ongoing consistency and validity. Higher risk-rated loans and lending-related commitments are reviewed quarterly.

The second element, a pooled allowance component for residential mortgage loans, is determined by first segregating our mortgage pools into two categories: (i) our wealth management mortgages and (ii) our legacy mortgage portfolio disclosed as other residential mortgages. We then apply models to each portfolio to predict prepayments, default rates and loss severity. We consider historical loss experience and use a loan-level, multi-period default model which further segments each portfolio by product

type including first lien fixed rate mortgages, first lien adjustable rate mortgages, second lien mortgages, and interest-only mortgages. We calculate the mortgage loss up to loan contractual maturity and embed a reasonable and supportable forecast and macroeconomic variable inputs which are described above. For home equity lines of credit, probability of default and loss given default are based on external data from third-party databases due to the small size of the portfolio and limited internal data. Our legacy mortgage portfolio and home equity line of credit portfolios represent small sub-segments of our mortgage loans.

The third element, individually evaluated credits, is based on individual analysis of loans of $1 million and greater which no longer share the risk characteristics with other loans. Factors we consider in measuring the extent of expected credit loss include the payment status, collateral value, the borrower’s financial condition, guarantor support, the probability of collecting scheduled principal and interest payments when due, anticipated modifications of payment structure or term for troubled borrowers, and recoveries if they can be reasonably estimated. We measure the expected credit loss as the difference between the amortized cost basis in the loan and the present value of the expected future cash flows from the borrower which is generally discounted at the loan’s effective interest rate, or the fair value of the collateral, if the loan is collateral dependent. We generally consider nonperforming loans as well as loans that have been or are anticipated to be modified under a troubled debt restructuring for individual evaluation given the risk characteristics of such loans.

Allowance for credit losses - Securities - Debt

When estimating expected credit losses, we segment our available-for-sale and held-to-maturity debt securities portfolios by major asset class. This is influenced by whether the security is structured or non-structured (i.e., direct obligation), as well as the issuer type.

Debt securities are classified as available-for-sale securities when we intend to hold the securities for an indefinite period of time or when the securities may be used for tactical asset/liability management purposes and may be sold from time to time to effectively manage interest rate exposure, prepayment risk and liquidity needs. Available-for-sale securities

are measured at fair value. The difference between fair value and amortized cost represents the unrealized gains or losses on assets classified as available-for-sale, and is recorded net of tax as an addition to, or deduction from, other comprehensive income, unless we determine that this difference or a portion thereof represents an expected credit loss. If we determine that a credit loss exists, the amount is recognized as an allowance for credit losses in securities - available-for sale, with a corresponding adjustment to the provision for credit losses. We evaluate credit losses at the individual security level and do not recognize credit losses if the fair value exceeds amortized cost, and if we determine that a credit loss exists, we limit the recognition of the loss to the difference between fair value and amortized cost. In our determination of whether an expected credit loss exists, we routinely conduct periodic reviews and examine various quantitative and qualitative factors that are unique to each portfolio, including the severity of the unrealized loss position, agency rating, credit enhancement, cash flow deterioration and other factors. The measurement of an expected credit loss is then based on the best estimate of the present value of cash flows to be collected from the debt security. Generally, cash flows are discounted at the effective interest rate implicit in the debt security. Changes to the present value of cash flows due to the passage of time are recognized within the allowance for credit losses.

We estimate expected credit losses for held-to-maturity debt securities using a similar methodology as described in the first allowance element within “Allowance for credit losses - Loans and lending-related commitments” above. The allowance for credit losses on held-to-maturity debt securities are recorded in securities - held-to-maturity. The components of the credit loss calculation for each major portfolio or asset class include a probability of default and loss given default and their values depend on the forecast behavior of variables in the macroeconomic environment. For structured debt securities, we estimated expected credit losses at the individual security level and use a cash flow model to project principal losses. Generally, cash flows are discounted at the effective interest rate implicit in the debt security. The difference is reflected in the allowance for credit losses, and changes to the present value of cash flows due to the passage of time are recognized within the allowance for credit losses.

We currently do not require an estimate of expected credit losses to be measured and recorded for U.S. Treasury securities, agency debt securities, as well as other debt securities that meet certain conditions that are based on a combination of factors such as guarantees, credit ratings, and other credit quality factors. These assets are monitored within our established governance structure on a recurring basis to determine if any changes are warranted.

Allowance for credit losses – Other financial instruments

We also estimate expected credit losses associated with margin loans, reverse repurchase agreements, security lending indemnifications, and deposits with third-party financial institutions using a similar methodology as described in the first allowance element within “Allowance for credit losses - Loans and lending-related commitments” above. The allowance for credit losses on reverse repurchase agreements are recorded in federal funds sold and securities purchased under resale agreements; the allowance for credit losses on securities lending indemnifications is recorded in other liabilities and the allowance for credit losses on deposits with third party financial institutions is recorded in cash and due from banks or interest-bearing deposits with banks. Our reverse repurchase agreements are short term and subject to continuous overcollateralization by our counterparties and timely collateral replenishment, when necessary. As a result, we estimate the expected credit loss related to the uncollateralized portion of the asset at the balance sheet date, if any, and when there is a reasonable expectation that the counterparty will not replenish the collateral in compliance with the terms of the repurchase agreement. This method is also applied to margin lending arrangements and securities lending indemnifications.

Allowance for credit losses - Other

We do not apply our credit loss measurement methodologies to accrued interest receivable balances related to our loan, debt securities and deposits with third party financial institutions assets given our nonaccrual policy that requires charge-off of interest receivable when deemed uncollectible. Accrued interest receivable related to these instruments is presented in total with other interest-bearing instruments in the consolidated balance sheet. Accrued interest receivable related to each major loan

class is disclosed within our credit quality disclosure in Note 5.

Our policy for credit losses related to purchased financial assets requires an evaluation to be performed prior to the effective purchase date to determine if more than an insignificant decline in credit quality has occurred during the period between the origination and purchase date, or in the case of debt securities, the period between the issuance and purchase date. If we purchase a financial asset with more than insignificant deterioration in credit quality, the measurement of expected credit loss is performed using the methodologies described above, and the credit loss is recorded as an allowance for credit losses on the purchase date. Subsequent to purchase, changes (favorable and unfavorable) in expected cash flows are recognized immediately in net income by adjusting the allowance. We evaluate various factors in the determination of whether a more than an insignificant decline in credit quality has occurred and these factors vary depending upon the type of asset purchased. Such factors include changes in risk rating and/or agency rating, collateral deterioration, payment status, purchase price, credit spreads, and other factors. We did not purchase any such assets during the first six months of 2020 and did not own such assets as of June 30, 2020.

We apply a separate credit loss methodology to accounts receivables to estimate the expected credit losses associated with these short-term receivables which historically have not resulted in significant credit losses. The allowance for credit losses on accounts receivable is reflected in other assets.

The qualitative component of our estimate for the allowance for credit losses is intended to capture expected losses that may not have been fully captured in the quantitative component. Through an established governance structure, management determines the qualitative allowance each period based on an evaluation of various internal and environmental factors which include: scenario weighting and sensitivity risk, credit concentration risk, economic conditions and other considerations. We may also make adjustments for idiosyncratic

risks. Once determined in the aggregate, our qualitative allowance is then allocated to each of our financial instrument portfolios except for debt securities and those instruments carried in other assets based on the respective instruments’ quantitative allowance balances. The allocation of this additional allowance for credit losses is inherently judgmental, and the entire allowance for credit losses is available to absorb credit losses regardless of the nature of the loss.

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Acquisitions and dispositions

6 Months Ended

Jun. 30, 2020

Business Combinations [Abstract]

Acquisitions and dispositions

Acquisitions and dispositions

We sometimes structure our acquisitions with both an initial payment and later contingent payments tied to post-closing revenue or income growth. Contingent payments totaled $3 million in the second quarter of 2020 and the first six months of 2020.

At June 30, 2020, we are potentially obligated to pay additional consideration which, using reasonable assumptions, could range from $5 million to $10 million over the next two years, but could be higher as certain of the arrangements do not contain a contractual maximum.

Transaction in 2019

On Nov. 8, 2019, BNY Mellon, along with the other holders of Promontory Interfinancial Network, LLC (“PIN”), completed the sale of their interests in PIN. BNY Mellon recorded an after-tax gain of $622 million on the sale of this equity investment.

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Securities

6 Months Ended

Jun. 30, 2020

Securities [Abstract]

Securities

Securities

On Jan. 1, 2020, we adopted ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments on a prospective basis. See Note 2 for the significant accounting policy related to securities.

The following tables present the amortized cost, the gross unrealized gains and losses and the fair value of securities at June 30, 2020 and Dec. 31, 2019.

Securities at June 30, 2020			Gross unrealized				Fair value
	Amortized cost
(in millions)			Gains		Losses
Available-for-sale:
Agency RMBS	$	26,005	$	516	$	84	$	26,437
U.S. Treasury	23,537		1,600		—		25,137
Sovereign debt/sovereign guaranteed	15,724		165		2		15,887
Agency commercial mortgage-backed securities (“MBS”)	9,357		633		2		9,988
Foreign covered bonds	5,469		53		3		5,519
Supranational	5,385		64		1		5,448
Collateralized loan obligations (“CLOs”)	4,526		4		98		4,432
Foreign government agencies	3,536		42		—		3,578
U.S. government agencies	2,635		173		2		2,806
Other asset-backed securities (“ABS”)	2,724		29		10		2,743
Non-agency commercial MBS	2,517		129		16		2,630
Commercial paper/certificates of deposit (“CDs”)	1,849		4		—		1,853
Non-agency RMBS (a)	1,464		149		15		1,598
State and political subdivisions	1,150		31		2		1,179
Corporate bonds	789		42		—		831
Other debt securities	1		—		—		1
Total securities available-for-sale (b)(c)	$	106,668	$	3,634	$	235	$	110,067
Held-to-maturity:
Agency RMBS	$	32,869	$	1,108	$	9	$	33,968
U.S. Treasury	4,687		114		1		4,800
U.S. government agencies	2,349		6		3		2,352
Agency commercial MBS	1,982		108		—		2,090
Commercial paper/CDs	1,537		2		—		1,539
Sovereign debt/sovereign guaranteed	974		41		—		1,015
Foreign covered bonds	79		—		—		79
Non-agency RMBS	73		3		2		74
Supranational	49		—		—		49
State and political subdivisions	16		1		—		17
Total securities held-to-maturity	$	44,615	$	1,383	$	15	$	45,983
Total securities	$	151,283	$	5,017	$	250	$	156,050

(a) Includes $538 million that was included in the former Grantor Trust.

(b) In the first quarter of 2020, we adopted new accounting guidance included in ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, on a prospective basis. The allowance for credit loss on available-for-sale securities of $12 million primarily relates to CLOs. See Note 2 for additional information.

(c) Includes gross unrealized gains of $28 million and gross unrealized losses of $55 million recorded in accumulated other comprehensive income related to securities that were transferred from available-for-sale to held-to-maturity. The unrealized gains and losses are primarily related to Agency RMBS and will be amortized into net interest revenue over the contractual lives of the securities.

Securities at Dec. 31, 2019			Gross unrealized
	Amortized cost						Fair value
(in millions)			Gains		Losses
Available-for-sale:
Agency RMBS	$	27,022	$	164	$	143	$	27,043
U.S. Treasury	14,979		472		20		15,431
Sovereign debt/sovereign guaranteed	12,548		109		11		12,646
Agency commercial MBS	9,231		203		17		9,417
Foreign covered bonds	4,189		15		7		4,197
CLOs	4,078		1		16		4,063
Supranational	3,697		18		6		3,709
Foreign government agencies	2,638		7		2		2,643
Non-agency commercial MBS	2,134		46		2		2,178
Other ABS	2,141		7		5		2,143
U.S. government agencies	1,890		61		2		1,949
Non-agency RMBS (a)	1,038		202		7		1,233
State and political subdivisions	1,017		27		—		1,044
Corporate bonds	832		21		—		853
Other debt securities	1		—		—		1
Total securities available-for-sale (b)	$	87,435	$	1,353	$	238	$	88,550
Held-to-maturity:
Agency RMBS	$	27,357	$	292	$	46	$	27,603
U.S. Treasury	3,818		28		3		3,843
Agency commercial MBS	1,326		21		3		1,344
U.S. government agencies	1,023		1		2		1,022
Sovereign debt/sovereign guaranteed	756		31		—		787
Non-agency RMBS	80		4		1		83
Foreign covered bonds	79		—		—		79
Supranational	27		—		—		27
State and political subdivisions	17		—		—		17
Total securities held-to-maturity	$	34,483	$	377	$	55	$	34,805
Total securities	$	121,918	$	1,730	$	293	$	123,355

(a) Includes $640 million that was included in the former Grantor Trust.

(b) Includes gross unrealized gains of $32 million and gross unrealized losses of $65 million recorded in accumulated other comprehensive income related to securities that were transferred from available-for-sale to held-to-maturity. The unrealized gains and losses are primarily related to Agency RMBS and will be amortized into net interest revenue over the contractual lives of the securities.

The following table presents the realized gains, losses and impairments, on a gross basis.

Net securities gains (losses)
(in millions)	2Q20			1Q20			2Q19			YTD20			YTD19
Realized gross gains	$	16		$	12		$	12		$	28		$	17
Realized gross losses	(7		)	(3		)	(5		)	(10		)	(9		)
Recognized gross impairments	—			—			—			—			—
Total net securities gains	$	9		$	9		$	7		$	18		$	8

The following table presents pre-tax net securities gains by type.

Net securities gains
(in millions)	2Q20		1Q20		2Q19		YTD20		YTD19
Supranational	$	6	$	—	$	—	$	6	$	—
U.S. Treasury	1		5		3		6		4
Other	2		4		4		6		4
Total net securities gains	$	9	$	9	$	7	$	18	$	8

Allowance for credit losses - Securities

In the first quarter of 2020, we adopted new accounting guidance included in ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, on a prospective basis. The allowance for credit losses related to securities was $7 million on Jan. 1, 2020 and $12 million at June 30, 2020. The increase reflects additional credit deterioration in the available-for-sale CLO portfolio. For additional information about the review of securities under previous other-than-temporary impairment guidance, refer to Notes 1 and 4, both Notes to Consolidated Financial Statements, in our 2019 Annual Report.

Credit quality indicators - Securities

At June 30, 2020, the gross unrealized losses on the securities portfolio were primarily attributable to an increase in credit spreads from the date of purchase, and for certain securities that were transferred from available-for-sale to held-to-maturity, an increase in interest rates through the date they were transferred. Specifically, $55 million of the unrealized losses at June 30, 2020 and $65 million at Dec. 31, 2019 reflected in the available-for-sale sections of the tables below relate to certain securities (primarily Agency RMBS) that were transferred in prior periods from available-for-sale to held-to-maturity. The unrealized losses will be amortized into net interest revenue over the contractual lives of the securities. The transfer created a new cost basis for the securities. As a result, if these securities have experienced unrealized losses since the date of transfer, the corresponding fair value and unrealized losses would be reflected in the held-to-maturity sections of the following tables. We do not intend to sell these securities, and it is not more likely than not that we will have to sell these securities.

The following table shows the aggregate fair value of available-for-sale securities with a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 months or more without an allowance for credit losses.

Available-for-sale securities in an unrealized loss position at June 30, 2020 (a)	Less than 12 months				12 months or more				Total
	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
(in millions)
Agency RMBS	$	2,809	$	5	$	6,030	$	79	$	8,839	$	84
Sovereign debt/sovereign guaranteed	1,952		2		110		—		2,062		2
Agency commercial MBS	266		—		350		2		616		2
Foreign covered bonds	1,003		2		281		1		1,284		3
Supranational	931		1		233		—		1,164		1
CLOs	3,522		68		575		19		4,097		87
U.S. government agencies	79		2		—		—		79		2
Other ABS	760		6		203		4		963		10
Non-agency commercial MBS	476		15		39		1		515		16
Non-agency RMBS (b)	508		7		96		7		604		14
State and political subdivisions	79		2		2		—		81		2
Total securities available-for-sale (c)	$	12,385	$	110	$	7,919	$	113	$	20,304	$	223

(a) Includes $530 million of securities with an unrealized loss of greater than $1 million.

(b) Includes $42 million of securities with an unrealized loss of $1 million for less than 12 months and $1 million of securities with an unrealized loss of less than $1 million for 12 months or more that were included in the former Grantor Trust.

(c) Includes gross unrealized losses of $55 million for 12 months or more recorded in accumulated other comprehensive income related to securities that were transferred from available-for-sale to held-to-maturity. The unrealized losses are primarily related to Agency RMBS and will be amortized into net interest revenue over the contractual lives of the securities. There were no gross unrealized losses for less than 12 months.

The following table presents the temporarily impaired securities under the disclosure guidance that existed prior to the adoption of ASU 2016-13 and shows the aggregate fair value of available-for-sale securities with a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 months or more.

Temporarily impaired securities at Dec. 31, 2019	Less than 12 months				12 months or more				Total
(in millions)	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Available-for-sale:
Agency RMBS	$	8,373	$	33	$	5,912	$	110	$	14,285	$	143
U.S. Treasury	1,976		16		766		4		2,742		20
Sovereign debt/sovereign guaranteed	4,045		10		225		1		4,270		11
Agency commercial MBS	1,960		12		775		5		2,735		17
Foreign covered bonds	1,009		4		690		3		1,699		7
CLOs	1,066		2		1,499		14		2,565		16
Supranational	1,336		6		360		—		1,696		6
Foreign government agencies	1,706		2		47		—		1,753		2
Non-agency commercial MBS	525		2		45		—		570		2
Other ABS	456		3		305		2		761		5
U.S. government agencies	377		2		—		—		377		2
Non-agency RMBS (a)	101		—		113		7		214		7
State and political subdivisions	—		—		16		—		16		—
Corporate bonds	82		—		21		—		103		—
Total securities available-for-sale (b)	$	23,012	$	92	$	10,774	$	146	$	33,786	$	238

(a) Includes $2 million of securities with an unrealized loss of less than $1 million for less than 12 months and $2 million of securities with an unrealized loss of less than $1 million for 12 months or more that were included in the former Grantor Trust.

(b) Includes gross unrealized losses of $65 million for 12 months or more recorded in accumulated other comprehensive income related to securities that were transferred from available-for-sale to held-to-maturity. The unrealized losses are primarily related to Agency RMBS and will be amortized into net interest revenue over the contractual lives of the securities. There were no gross unrealized losses for less than 12 months.

The following table shows the credit quality of the held-to-maturity securities. We have included certain credit ratings information because the information can indicate the degree of credit risk to which we are exposed. Significant changes in ratings classifications could indicate increased credit risk for us and could be accompanied by a reduction in the fair value of our securities portfolio.

Held-to-maturity securities portfolio at June 30, 2020 (a)					Ratings (b)
			Net unrealized gain								BB+ and lower		A1+/A2/SP-1+
(dollars in millions)	Amortized cost				AAA/ AA-		A+/ A-		BBB+/ BBB-						Not rated
Agency RMBS	$	32,869	$	1,099	100	%	—	%	—	%	—	%	—	%	—	%
U.S. Treasury	4,687		113		100		—		—		—		—		—
U.S. government agencies	2,349		3		100		—		—		—		—		—
Agency commercial MBS	1,982		108		100		—		—		—		—		—
Commercial paper/CDs	1,537		2		—		—		—		—		100		—
Sovereign debt/sovereign guaranteed (c)	974		41		100		—		—		—		—		—
Foreign covered bonds (d)	79		—		100		—		—		—		—		—
Non-agency RMBS	73		1		42		43		2		12		—		1
Supranational	49		—		100		—		—		—		—		—
State and political subdivisions	16		1		6		2		6		—		—		86
Total held-to-maturity securities	$	44,615	$	1,368	96	%	1	%	—	%	—	%	3	%	—	%

(a) In the first quarter of 2020, we adopted new accounting guidance included in ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, on a prospective basis. See Note 2 for additional information.

(b) Represents ratings by Standard & Poor’s (“S&P”) or the equivalent.

(c) Primarily consists of exposure to France, UK and Germany.

(d) Primarily consists of exposure to Canada.

Maturity distribution

The following table shows the maturity distribution by carrying amount and yield (on a tax equivalent basis) of our securities portfolio.

Maturity distribution and yields on securities at June 30, 2020	U.S. Treasury				U.S. government agencies				State and political subdivisions				Other bonds, notes and debentures				Mortgage/ asset-backed
(dollars in millions)	Amount		Yield (a)		Amount		Yield (a)		Amount		Yield (a)		Amount		Yield (a)		Amount		Yield (a)		Total
Securities available-for-sale:
One year or less	$	5,348	0.50	%	$	25	2.55	%	$	178	2.92	%	$	13,826	0.71	%	$	—	—	%	$	19,377
Over 1 through 5 years	10,350		1.52		1,038		1.22		646		3.29		16,098		0.68		—		—		28,132
Over 5 through 10 years	6,171		1.67		1,623		2.56		107		2.42		2,838		0.53		—		—		10,739
Over 10 years	3,268		3.11		120		2.06		248		2.37		355		0.97		—		—		3,991
Mortgage-backed securities	—		—		—		—		—		—		—		—		40,653		2.24		40,653
Asset-backed securities	—		—		—		—		—		—		—		—		7,175		2.18		7,175
Total	$	25,137	1.54	%	$	2,806	2.04	%	$	1,179	2.96	%	$	33,117	0.69	%	$	47,828	2.23	%	$	110,067
Securities held-to-maturity:
One year or less	$	1,899	0.41	%	$	—	—	%	$	—	—	%	$	1,646	1.21	%	$	—	—	%	$	3,545
Over 1 through 5 years	2,788		1.91		1,696		1.12		3		5.66		919		0.66		—		—		5,406
Over 5 through 10 years	—		—		212		1.98		—		—		31		0.92		—		—		243
Over 10 years	—		—		441		2.33		13		4.76		43		0.35		—		—		497
Mortgage-backed securities	—		—		—		—		—		—		—		—		34,924		2.87		34,924
Total	$	4,687	1.32	%	$	2,349	1.42	%	$	16	4.91	%	$	2,639	1.00	%	$	34,924	2.87	%	$	44,615

(a)

Yields are based upon the amortized cost of securities.

Pledged assets

At June 30, 2020, BNY Mellon had pledged assets of $139 billion, including $109 billion pledged as collateral for potential borrowings at the Federal Reserve Discount Window and $6 billion pledged as collateral for borrowing at the Federal Home Loan Bank. The components of the assets pledged at June 30, 2020 included $121 billion of securities, $12 billion of loans, $5 billion of trading assets and $1 billion of interest-bearing deposits with banks.

If there has been no borrowing at the Federal Reserve Discount Window, the Federal Reserve generally allows banks to freely move assets in and out of their pledged assets account to sell or repledge the assets for other purposes. BNY Mellon regularly moves assets in and out of its pledged assets account at the Federal Reserve.

At Dec. 31, 2019, BNY Mellon had pledged assets of $118 billion, including $80 billion pledged as collateral for potential borrowing at the Federal Reserve Discount Window and $6 billion pledged as collateral for borrowing at the Federal Home Loan Bank. The components of the assets pledged at Dec. 31, 2019 included $98 billion of securities, $13 billion of loans, $7 billion of trading assets and less than $1 billion of interest-bearing deposits with banks.

At June 30, 2020 and Dec. 31, 2019, pledged assets included $21 billion and $29 billion, respectively, for which the recipients were permitted to sell or repledge the assets delivered.

At June 30, 2020, we pledged commercial paper and CDs totaling $1.5 billion as collateral to the Federal Reserve Bank of Boston to secure non-recourse borrowings under the Federal Reserve’s Money Market Mutual Fund Liquidity Facility (“MMLF”) program.

We also obtain securities as collateral, including receipts under resale agreements, securities borrowed, derivative contracts and custody agreements, on terms which permit us to sell or repledge the securities to others. At June 30, 2020 and Dec. 31, 2019, the market value of the securities received that can be sold or repledged was $107 billion and $153 billion, respectively. We routinely sell or repledge these securities through delivery to third parties. As of June 30, 2020 and Dec. 31, 2019, the market value

of securities collateral sold or repledged was $72 billion and $107 billion, respectively.

Restricted cash and securities

Cash and securities may be segregated under federal and other regulations or requirements. At both June 30, 2020 and Dec. 31, 2019, cash segregated under federal and other regulations or requirements was $2 billion. Restricted cash is included in interest-bearing deposits with banks on the consolidated balance sheet. Securities segregated under federal and other regulations or requirements were $6 billion at June 30, 2020 and $1 billion at Dec. 31, 2019. Restricted securities were sourced from securities purchased under resale agreements and are included in federal funds sold and securities purchased under resale agreements on the consolidated balance sheet.

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Loans and asset quality

6 Months Ended

Jun. 30, 2020

Receivables [Abstract]

Loans and asset quality

Loans and asset quality

Loans

The table below provides the details of our loan portfolio.

Loans	June 30, 2020		Dec. 31, 2019
(in millions)
Domestic:
Commercial	$	2,192	$	1,442
Commercial real estate	6,217		5,575
Financial institutions	3,804		4,852
Lease financings	439		537
Wealth management loans and mortgages	15,753		16,050
Other residential mortgages	450		494
Overdrafts	1,073		524
Other	1,489		1,167
Margin loans	11,476		11,907
Total domestic	42,893		42,548
Foreign:
Commercial	253		347
Commercial real estate	11		7
Financial institutions	6,949		7,626
Lease financings	589		576
Wealth management loans and mortgages	122		140
Other (primarily overdrafts)	3,147		2,230
Margin loans	1,433		1,479
Total foreign	12,504		12,405
Total loans (a)	$	55,397	$	54,953

(a) Net of unearned income of $292 million at June 30, 2020 and $313 million at Dec. 31, 2019 primarily related to domestic and foreign lease financings.

Our loan portfolio consists of three portfolio segments: commercial, lease financings and mortgages. We manage our portfolio at the class level, which consists of six classes of financing receivables: commercial, commercial real estate, financial institutions, lease financings, wealth

management loans and mortgages, and other residential mortgages.

The following tables are presented for each class of financing receivables and provide additional information about our credit risks.

Allowance for credit losses

On Jan. 1, 2020, we adopted ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, on a prospective basis. See Note 2 for the significant accounting policy related to allowance for credit losses on loans and lending-related commitments.

Activity in the allowance for credit losses on loans and lending-related commitments is presented below.

Allowance for credit losses activity for the quarter ended June 30, 2020											Wealth management loans and mortgages			Other residential mortgages
(in millions)	Commercial		Commercial real estate		Financial institutions			Lease financings									Total
Beginning balance	$	26	$	208	$	18		$	13		$	9		$	14		$	288
Charge-offs	—		—		—			—			—			—			—
Recoveries	—		—		—			—			—			3			3
Net recoveries	—		—		—			—			—			3			3
Provision	14		164		(2		)	(10		)	2			(5		)	163
Ending balance (a)	$	40	$	372	$	16		$	3		$	11		$	12		$	454
Allowance for:
Loan losses	$	23	$	244	$	11		$	3		$	9		$	12		$	302
Lending-related commitments	17		128		5			—			2			—			152
Individually evaluated for impairment:
Loan balance	$	—	$	—	$	—		$	—		$	18	(b)	$	—		$	18
Allowance for loan losses	—		—		—			—			—			—			—

(a) Includes $11 million of allowance for credit losses related to foreign loans, primarily financial institutions.

(b) Includes collateral dependent loans of $18 million with $26 million of collateral at fair value.

Allowance for credit losses activity for the quarter ended March 31, 2020											Wealth management loans and mortgages				Other residential mortgages
(in millions)	Commercial			Commercial real estate		Financial institutions			Lease financings									Foreign			(a)	Total
Balance at Dec. 31, 2019	$	60		$	76	$	20		$	3	$	20			$	13		$	24			$	216
Impact of adopting ASU 2016-13	(43		)	14		(6		)	—		(12		)		2			(24		)		(69		)
Balance at Jan. 1, 2020	17			90		14			3		8				15			—				147
Charge-offs	—			—		—			—		—				—			—				—
Recoveries	—			—		—			—		—				—			—				—
Net (charge-offs) recoveries	—			—		—			—		—				—			—				—
Provision	9			118		4			10		1				(1		)	—				141
Ending balance (b)	$	26		$	208	$	18		$	13	$	9			$	14		$	—			$	288
Allowance for:
Loan losses	$	13		$	83	$	10		$	13	$	7			$	14		$	—			$	140
Lending-related commitments	13			125		8			—		2				—			—				148
Individually evaluated for impairment:
Loan balance	$	—		$	—	$	—		$	—	$	18		(c)	$	—		$	—			$	18
Allowance for loan losses	—			—		—			—		—				—			—				—

(a) The allowance related to foreign exposure has been reclassified to financial institutions ($10 million), commercial ($10 million) and lease financings ($4 million).

(b) Includes $12 million of allowance for credit losses related to foreign loans, primarily financial institutions.

(c) Includes collateral dependent loans of $18 million with $26 million of collateral at fair value.

Allowance for credit losses activity for the quarter ended June 30, 2019												Wealth management loans and mortgages			Other residential mortgages			All other			Foreign		Total
(in millions)	Commercial			Commercial real estate			Financial institutions			Lease financings
Beginning balance	$	82		$	74		$	23		$	4	$	21		$	15		$	—		$	29	$	248
Charge-offs	—			—			—			—		(1		)	—			—			—		(1		)
Recoveries	—			—			—			—		—			2			—			—		2
Net (charge-offs) recoveries	—			—			—			—		(1		)	2			—			—		1
Provision	(5		)	(2		)	(2		)	—		—			(3		)	—			4		(8		)
Ending balance	$	77		$	72		$	21		$	4	$	20		$	14		$	—		$	33	$	241
Allowance for:
Loan losses	$	23		$	57		$	8		$	4	$	17		$	14		$	—		$	23	$	146
Lending-related commitments	54			15			13			—		3			—			—			10		95
Individually evaluated for impairment:
Loan balance	$	96		$	—		$	—		$	—	$	16		$	—		$	—		$	—	$	112
Allowance for loan losses	10			—			—			—		—			—			—			—		10
Collectively evaluated for impairment:
Loan balance	$	1,356		$	5,192		$	4,574		$	662	$	15,563		$	549		$	12,849	(a)	$	11,539	$	52,284
Allowance for loan losses	13			57			8			4		17			14			—			23		136

(a) Includes $1,575 million of domestic overdrafts, $10,152 million of margin loans and $1,122 million of other loans at June 30, 2019.

Allowance for credit losses activity for the six months ended June 30, 2020											Wealth management loans and mortgages			Other residential mortgages			Foreign			Total
(in millions)	Commercial			Commercial real estate		Financial institutions			Lease financings
Balance at Dec. 31, 2019	$	60		$	76	$	20		$	3	$	20		$	13		$	24		$	216
Impact of adopting ASU 2016-13	(43		)	14		(6		)	—		(12		)	2			(24		)	(69		)
Balance at Jan. 1, 2020	17			90		14			3		8			15			—			147
Charge-offs	—			—		—			—		—			—			—			—
Recoveries	—			—		—			—		—			3			—			3
Net recoveries	—			—		—			—		—			3			—			3
Provision	23			282		2			—		3			(6		)	—			304
Ending balance	$	40		$	372	$	16		$	3	$	11		$	12		$	—		$	454

Allowance for credit losses activity for the six months ended June 30, 2019													Wealth management loans and mortgages			Other residential mortgages			All other		Foreign		Total
(in millions)	Commercial			Commercial real estate			Financial institutions			Lease financings
Beginning balance	$	81		$	75		$	22		$	5		$	21		$	16		$	—	$	32	$	252
Charge-offs	(11		)	—			—			—			(1		)	—			—		—		(12		)
Recoveries	—			—			—			—			—			2			—		—		2
Net (charge-offs) recoveries	(11		)	—			—			—			(1		)	2			—		—		(10		)
Provision	7			(3		)	(1		)	(1		)	—			(4		)	—		1		(1		)
Ending balance	$	77		$	72		$	21		$	4		$	20		$	14		$	—	$	33	$	241

Nonperforming assets

The table below presents our nonperforming assets. 

Nonperforming assets	June 30, 2020						Dec. 31, 2019
	Recorded investment
	With an allowance		Without an allowance
(in millions)					Total
Nonperforming loans:
Other residential mortgages	$	58	$	—	$	58	$	62
Wealth management loans and mortgages	10		18		28		24
Total nonperforming loans	68		18		86		86
Other assets owned	—		2		2		3
Total nonperforming assets	$	68	$	20	$	88	$	89

At June 30, 2020, undrawn commitments to borrowers whose loans were classified as nonaccrual or reduced rate were not material.

Past due loans

The table below presents our past due loans. 

Past due loans and still accruing interest	June 30, 2020								Dec. 31, 2019
	Days past due						Total past due		Days past due						Total past due
(in millions)	30-59		60-89		≥90				30-59		60-89		≥90
Wealth management loans and mortgages	$	31	$	6	$	—	$	37	$	22	$	5	$	—	$	27
Other residential mortgages	5		1		—		6		8		3		—		11
Financial institutions	—		—		—		—		1		30		—		31
Commercial real estate	—		—		—		—		6		12		—		18
Total past due loans	$	36	$	7	$	—	$	43	$	37	$	50	$	—	$	87

Loan modifications

Due to the coronavirus pandemic, there have been two forms of relief provided for classifying loans as TDRs: The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and the Interagency Guidance. See Note 2 for additional details on the CARES Act and Interagency Guidance. Financial institutions may account for eligible loan modifications either under the CARES Act or the Interagency Guidance. The Company has elected to apply both the CARES Act and the Interagency Guidance, as applicable, in providing borrowers with loan modification relief in response to the coronavirus pandemic. We modified loans totaling $282 million in the second quarter of 2020 by providing short-term loan payment forbearances or modified principal and/or interest payments. We did

not identify these modifications as troubled debt restructurings (“TDRs”). These loans were primarily residential mortgage and commercial real estate loans. During the loan modification period, these loans are not reported as nonperforming or past due. We modified other residential mortgage loans totaling $1 million in both the second quarter of 2019 and first quarter of 2020.

Credit quality indicators

Our credit strategy is to focus on investment-grade clients that are active users of our non-credit services. Each customer is assigned an internal credit rating, which is mapped to an external rating agency grade equivalent, if possible, based upon a number of dimensions, which are continually evaluated and may change over time.

The table below provides information about the credit profile of the loan portfolio by the period of origination.

Credit profile of the loan portfolio													June 30, 2020
													Revolving loans
	Originated, at amortized cost												Amortized cost		Converted to term loans - Amortized cost				Accrued interest receivable
(in millions)	YTD20		2019		2018		2017		2016		Prior to 2016						Total (a)
Commercial:
Investment grade	$	107	$	213	$	106	$	554	$	57	$	—	$	1,054	$	—	$	2,091
Non-investment grade	40		69		12		—		3		—		230		—		354
Total commercial	147		282		118		554		60		—		1,284		—		2,445		$	3
Commercial real estate:
Investment grade	500		1,212		806		550		431		422		292		—		4,213
Non-investment grade	77		410		459		179		421		212		228		29		2,015
Total commercial real estate	577		1,622		1,265		729		852		634		520		29		6,228		8
Financial institutions:
Investment grade	27		247		133		125		14		181		7,934		—		8,661
Non-investment grade	53		29		—		—		—		—		2,010		—		2,092
Total financial institutions	80		276		133		125		14		181		9,944		—		10,753		25
Wealth management loans and mortgages:
Investment grade	34		81		12		171		56		85		6,877		—		7,316
Non-investment grade	—		—		—		—		—		35		79		—		114
Wealth management mortgages	491		1,126		719		1,360		1,736		2,976		37		—		8,445
Total wealth management loans and mortgages	525		1,207		731		1,531		1,792		3,096		6,993		—		15,875		27
Lease financings	45		20		20		12		29		902		—		—		1,028		—
Other residential mortgages	—		—		—		—		—		450		—		—		450		2
Other loans	—		—		—		—		—		—		1,530		—		1,530		1
Margin loans	2,552		1,000		—		—		—		—		9,357		—		12,909		11
Total loans	$	3,926	$	4,407	$	2,267	$	2,951	$	2,747	$	5,263	$	29,628	$	29	$	51,218	$	77

(a) Excludes overdrafts of $4,179 million. Overdrafts occur on a daily basis primarily in the custody and securities clearance business and are generally repaid within two business days.

Commercial loans

The commercial loan portfolio is divided into investment grade and non-investment grade categories based on the assigned internal credit ratings, which are generally consistent with those of the public rating agencies. Customers with ratings consistent with BBB- (S&P)/Baa3 (Moody’s) or better are considered to be investment grade. Those clients with ratings lower than this threshold are considered to be non-investment grade.

Commercial real estate

Our income-producing commercial real estate facilities are focused on experienced owners and are structured with moderate leverage based on existing cash flows. Our commercial real estate lending activities also include construction and renovation facilities.

Financial institutions

Financial institution exposures are high quality, with 95% of the exposures meeting the investment grade equivalent criteria of our internal credit rating classification at June 30, 2020. In addition, 75% of the financial institutions exposure is secured. For example, securities industry clients and asset managers often borrow against marketable securities held in custody. The exposure to financial institutions is generally short-term with 90% expiring within one year.

Wealth management loans and mortgages

Wealth management non-mortgage loans are not typically rated by external rating agencies. A majority of the wealth management loans are secured by the customers’ investment management accounts or custody accounts. Eligible assets pledged for these loans are typically investment grade fixed-income securities, equities and/or mutual funds. Internal ratings for this portion of the wealth management

portfolio, therefore, would equate to investment grade external ratings. Wealth management loans are provided to select customers based on the pledge of other types of assets, including business assets, fixed assets or a modest amount of commercial real estate. For the loans collateralized by other assets, the credit quality of the obligor is carefully analyzed, but we do not consider this portfolio of loans to be investment grade.

Credit quality indicators for wealth management mortgages are not correlated to external ratings. Wealth management mortgages are typically loans to high-net-worth individuals, which are secured primarily by residential property. These loans are primarily interest-only, adjustable rate mortgages with a weighted-average loan-to-value ratio of 62% at origination. Delinquency rate is a key indicator of credit quality in the wealth management portfolio. At June 30, 2020, less than 1% of the mortgages were past due.

At June 30, 2020, the wealth management mortgage portfolio consisted of the following geographic concentrations: California - 23%; New York - 17%; Massachusetts - 10%; Florida - 8%; and other - 42%.

Lease financing

At June 30, 2020, the lease financings portfolio consisted of exposures backed by well-diversified assets, primarily large-ticket transportation equipment and real estate. The largest component of our lease residual value exposure is freight-related rail. Assets are both domestic and foreign-based, with primary concentrations in the U.S. and Germany.

Other residential mortgages

The other residential mortgage portfolio primarily consists of 1-4 family residential mortgage loans and totaled $450 million at June 30, 2020 and $494 million at Dec. 31, 2019. These loans are not

typically correlated to external ratings. Included in this portfolio at June 30, 2020 were $81 million of mortgage loans purchased in 2005, 2006 and the first quarter of 2007, of which 25% of the serviced loan balance was at least 60 days delinquent.

Overdrafts

Overdrafts primarily relate to custody and securities clearance clients and totaled $4.2 billion at June 30, 2020 and $2.7 billion at Dec. 31, 2019. Overdrafts occur on a daily basis and are generally repaid within two business days.

Other loans

Other loans primarily include loans to consumers that are fully collateralized with equities, mutual funds and fixed-income securities.

Margin loans

We had $12.9 billion of secured margin loans at June 30, 2020, compared with $13.4 billion at Dec. 31, 2019. Margin loans are collateralized with marketable securities, and borrowers are required to maintain a daily collateral margin in excess of 100% of the value of the loan. We have rarely suffered a loss on these types of loans.

Reverse repurchase agreements

Reverse repurchase agreements at June 30, 2020 were fully secured with high quality collateral. As a result, there was no allowance for credit losses related to these assets at June 30, 2020. This compares to an $18 million allowance at March 31, 2020.  The decrease is driven by a reduction in exposure and improvement in collateral liquidity and values related to reverse repurchase agreements collateralized by non-agency debt securities.

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Goodwill and intangible assets

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and intangible assets

Goodwill and intangible assets

Goodwill

The tables below provide a breakdown of goodwill by business.

Goodwill by business (in millions)	Investment Services			Investment and Wealth Management			Other			Consolidated
Balance at Dec. 31, 2019	$	8,332		$	9,007		$	47		$	17,386
Foreign currency translation	(24		)	(109		)	—			(133		)
Other (a)	47			—			(47		)	—
Balance at June 30, 2020	$	8,355		$	8,898		$	—		$	17,253

(a) Reflects the transfer of goodwill associated with the Capital Markets business.

Goodwill by business (in millions)	Investment Services			Investment and Wealth Management			Other		Consolidated
Balance at Dec. 31, 2018	$	8,333		$	8,970		$	47	$	17,350
Foreign currency translation	(6		)	(7		)	—		(13		)
Balance at June 30, 2019	$	8,327		$	8,963		$	47	$	17,337

Intangible assets

The tables below provide a breakdown of intangible assets by business.

Intangible assets – net carrying amount by business (in millions)	Investment Services			Investment and Wealth Management			Other		Consolidated
Balance at Dec. 31, 2019	$	678		$	1,580		$	849	$	3,107
Amortization	(36		)	(16		)	—		(52		)
Foreign currency translation	—			(10		)	—		(10		)
Balance at June 30, 2020	$	642		$	1,554		$	849	$	3,045

Intangible assets – net carrying amount by business (in millions)	Investment Services			Investment and Wealth Management			Other		Consolidated
Balance at Dec. 31, 2018	$	758		$	1,613		$	849	$	3,220
Amortization	(41		)	(18		)	—		(59		)
Foreign currency translation	—			(1		)	—		(1		)
Balance at June 30, 2019	$	717		$	1,594		$	849	$	3,160

The table below provides a breakdown of intangible assets by type.

Intangible assets	June 30, 2020								Dec. 31, 2019
(in millions)	Gross carrying amount		Accumulated amortization			Net carrying amount		Remaining weighted- average amortization period	Gross carrying amount		Accumulated amortization			Net carrying amount
Subject to amortization: (a)
Customer contracts—Investment Services	$	1,514	$	(1,244	)	$	270	10 years	$	1,520	$	(1,214	)	$	306
Customer relationships—Investment and Wealth Management	709		(554		)	155		10 years	712		(544		)	168
Other	64		(19		)	45		14 years	64		(16		)	48
Total subject to amortization	2,287		(1,817		)	470		10 years	2,296		(1,774		)	522
Not subject to amortization: (b)
Tradenames	1,291		N/A			1,291		N/A	1,293		N/A			1,293
Customer relationships	1,284		N/A			1,284		N/A	1,292		N/A			1,292
Total not subject to amortization	2,575		N/A			2,575		N/A	2,585		N/A			2,585
Total intangible assets	$	4,862	$	(1,817	)	$	3,045	N/A	$	4,881	$	(1,774	)	$	3,107

(a) Excludes fully amortized intangible assets.

(b) Intangible assets not subject to amortization have an indefinite life.

Estimated annual amortization expense for current intangibles for the next five years is as follows:

For the year ended Dec. 31,	Estimated amortization expense (in millions)
2020		$	104
2021		81
2022		63
2023		52
2024		45

Impairment testing

The goodwill impairment test is performed at least annually at the reporting unit level. Intangible assets not subject to amortization are tested for impairment annually or more often if events or circumstances indicate they may be impaired.

BNY Mellon’s three business segments include six reporting units for which goodwill impairment testing is performed on an annual basis. The Investment Services segment is comprised of four reporting units and the Investment and Wealth Management segment is comprised of two reporting units. As a result of the annual goodwill impairment test of the six reporting units conducted in the second quarter of 2020, no goodwill impairment was recognized.

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Other assets

6 Months Ended

Jun. 30, 2020

Other Assets [Abstract]

Other assets

Other assets

The following table provides the components of other assets presented on the consolidated balance sheet.

Other assets	June 30, 2020		Dec. 31, 2019
(in millions)
Corporate/bank-owned life insurance	$	5,245	$	5,219
Accounts receivable	3,404		3,802
Fails to deliver	3,201		1,671
Software	1,778		1,590
Prepaid pension assets	1,545		1,464
Equity in a joint venture and other investments	1,146		1,102
Renewable energy investments	1,083		1,144
Qualified affordable housing project investments	962		1,024
Prepaid expense	544		491
Federal Reserve Bank stock	477		466
Income taxes receivable	194		388
Seed capital	149		184
Fair value of hedging derivatives	137		21
Other (a)	1,441		1,655
Total other assets	$	21,306	$	20,221

(a)

At June 30, 2020 and Dec. 31, 2019, other assets include $7 million and $22 million, respectively, of Federal Home Loan Bank stock, at cost.

Non-readily marketable equity securities

Non-readily marketable equity securities do not have readily determinable fair values. These investments are valued using a measurement alternative where the investments are carried at cost, less any impairment, and plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. The observable price changes are recorded in investment and other income on the consolidated income statement. Our non-readily marketable equity securities totaled $106 million at June 30, 2020 and $61 million at Dec. 31, 2019 and are included in equity in a joint venture and other investments in the table above.

The following table presents the adjustments on the non-readily marketable equity securities.

Adjustments on non-readily marketable equity securities													Life-to-date
(in millions)	2Q20		1Q20		2Q19			YTD20		YTD19
Upward adjustments	$	2	$	4	$	2		$	6	$	2		$	38
Downward adjustments	—		—		(1		)	—		(1		)	(4		)
Net adjustments	$	2	$	4	$	1		$	6	$	1		$	34

Qualified affordable housing project investments

We invest in affordable housing projects primarily to satisfy the Company’s requirements under the Community Reinvestment Act. Our total investment in qualified affordable housing projects totaled $1.0 billion at both June 30, 2020 and Dec. 31, 2019. Commitments to fund future investments in qualified

affordable housing projects totaled $363 million at June 30, 2020 and $422 million at Dec. 31, 2019 and are recorded in other liabilities. A summary of the commitments to fund future investments is as follows: 2020 – $72 million; 2021 – $179 million; 2022 – $82 million; 2023 – $5 million; 2024 – $1 million; and 2025 and thereafter – $24 million.

Tax credits and other tax benefits recognized were $38 million in the second quarter of 2020, $38 million in the first quarter of 2020 and $39 million in the second quarter of 2019, $76 million in the first six months of 2020 and $78 million in the first six months of 2019.

Amortization expense included in the provision for income taxes was $31 million in the second quarter of 2020, $31 million in the first quarter of 2020 and $32 million in the second quarter of 2019, $62 million in the first six months of 2020 and $64 million in the first six months of 2019.

Investments valued using net asset value (“NAV”) per share

In our Investment and Wealth Management business, we make seed capital investments in certain funds we manage. We also hold private equity investments, specifically small business investment companies (“SBICs”), which are compliant with the Volcker Rule, and certain other corporate investments. Seed capital, private equity and other corporate investments are included in other assets on the consolidated balance sheet. The fair value of certain of these investments was estimated using the NAV per share for our ownership interest in the funds.

The table below presents information on our investments valued using NAV.

Investments valued using NAV	June 30, 2020					Dec. 31, 2019
(in millions)	Fair value		Unfunded  commitments			Fair value		Unfunded commitments
Seed capital (a)	$	56		$	12	$	59		$	—
Private equity investments (SBICs) (b)	91			58		89			55
Other (c)	40			—		33			—
Total	$	187		$	70	$	181		$	55

(a) Primarily includes leveraged loans and structured credit funds, which are generally not redeemable. Distributions from such investments will be received as the underlying investments in the funds, which have lives of six to 11 years at June 30, 2020 and lives of six years at Dec. 31, 2019, are liquidated.

(b) Private equity investments include Volcker Rule-compliant investments in SBICs that invest in various sectors of the economy. Private equity investments do not have redemption rights. Distributions from such investments will be received as the underlying investments in the private equity investments, which have a life of 10 years, are liquidated.

(c) Primarily includes investments in funds that relate to deferred compensation arrangements with employees. Investments in funds can be redeemed on a monthly to quarterly basis with redemption notice periods of up to 95 days.

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Contract revenue

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Contract revenue

Contract revenue

Fee revenue in Investment Services and Investment and Wealth Management is primarily variable, based on levels of assets under custody and/or administration, assets under management and the level of client-driven transactions, as specified in fee schedules. See Note 10 of the Notes to Consolidated Financial Statements in our 2019 Annual Report for information on the nature of our services and revenue recognition. See Note 24 of the Notes to Consolidated Financial Statements in our 2019 Annual Report for additional information on our principal businesses, Investment

Services and Investment and Wealth Management, and the primary services provided.

Disaggregation of contract revenue

Contract revenue is included in fee revenue on the consolidated income statement. The following table presents fee revenue related to contracts with customers, disaggregated by type of fee revenue, for each business segment. Business segment data has been determined on an internal management basis of accounting, rather than the generally accepted accounting principles used for consolidated financial reporting.

Disaggregation of contract revenue by business segment
	Quarter ended
	June 30, 2020											March 31, 2020											June 30, 2019 (a)
(in millions)	IS			IWM			Other			Total		IS			IWM			Other			Total		IS			IWM			Other			Total
Fee revenue - contract revenue:
Investment services fees:
Asset servicing fees	$	1,147		$	25		$	(15	)	$	1,157	$	1,127		$	23		$	(11	)	$	1,139	$	1,095		$	20		$	(6	)	$	1,109
Clearing services fees	431			—			—			431		470			—			—			470		411			—			(1		)	410
Issuer services fees	277			—			—			277		263			—			—			263		291			—			—			291
Treasury services fees	144			—			1			145		149			—			—			149		140			1			—			141
Total investment services fees	1,999			25			(14		)	2,010		2,009			23			(11		)	2,021		1,937			21			(7		)	1,951
Investment management and performance fees	4			792			(5		)	791		5			862			(4		)	863		4			833			(4		)	833
Financing-related fees	23			1			—			24		28			—			—			28		16			—			1			17
Distribution and servicing	(7		)	34			—			27		(12		)	43			—			31		(13		)	44			—			31
Investment and other income	62			(41		)	3			24		72			(50		)	—			22		69			(48		)	—			21
Total fee revenue - contract revenue	2,081			811			(16		)	2,876		2,102			878			(15		)	2,965		2,013			850			(10		)	2,853
Fee and other revenue - not in scope of Accounting Standards Codification (“ASC”) 606 (b)(c)	258			27			54			339		334			(32		)	45			347		220			4			41			265
Total fee and other revenue	$	2,339		$	838		$	38		$	3,215	$	2,436		$	846		$	30		$	3,312	$	2,233		$	854		$	31		$	3,118

(a) Restated to reflect the first quarter 2020 business segment reclassifications. There was no impact on total revenue, by type or in aggregate.

(b) Primarily includes foreign exchange and other trading revenue, investment and other income (loss), financing-related fees, asset servicing fees, net securities gains (losses), all of which are accounted for using other accounting guidance.

(c) The Investment and Wealth Management business includes income (loss) from consolidated investment management funds, net of noncontrolling interests, of $39 million in the second quarter of 2020, $(20) million in the first quarter of 2020 and $6 million in the second quarter of 2019.

IS - Investment Services segment.

IWM - Investment and Wealth Management segment.

Disaggregation of contract revenue by business segment	Year-to-date
	June 30, 2020											June 30, 2019 (a)
(in millions)	IS			IWM			Other			Total		IS			IWM			Other			Total
Fee revenue - contract revenue:
Investment services fees:
Asset servicing fees	$	2,274		$	48		$	(26	)	$	2,296	$	2,176		$	40		$	(14	)	$	2,202
Clearing services fees	901			—			—			901		809			—			(1		)	808
Issuer services fees	540			—			—			540		542			—			—			542
Treasury services fees	293			—			1			294		272			1			—			273
Total investment services fees	4,008			48			(25		)	4,031		3,799			41			(15		)	3,825
Investment management and performance fees	9			1,654			(9		)	1,654		8			1,674			(8		)	1,674
Financing-related fees	51			1			—			52		33			—			1			34
Distribution and servicing	(19		)	77			—			58		(27		)	89			—			62
Investment and other income	134			(91		)	3			46		138			(97		)	—			41
Total fee revenue - contract revenue	4,183			1,689			(31		)	5,841		3,951			1,707			(22		)	5,636
Fee and other revenue - not in scope of ASC 606 (b)(c)	592			(5		)	99			686		443			16			71			530
Total fee and other revenue	$	4,775		$	1,684		$	68		$	6,527	$	4,394		$	1,723		$	49		$	6,166

(a) Restated to reflect the first quarter 2020 business segment reclassifications. There was no impact on total revenue, by type or in aggregate.

(b) Primarily includes foreign exchange and other trading revenue, investment and other income (loss), financing-related fees, asset servicing fees, net securities gains (losses), all of which are accounted for using other accounting guidance.

(c) The Investment and Wealth Management business includes income from consolidated investment management funds, net of noncontrolling interests, of $19 million in the first six months of 2020 and $22 million in the first six months of 2019.

IS - Investment Services segment.

IWM - Investment and Wealth Management segment.

Contract balances

Our clients are billed based on fee schedules that are agreed upon in each customer contract. Receivables from customers were $2.4 billion at both June 30, 2020 and Dec. 31, 2019.

Contract assets represent accrued revenues that have not yet been billed to the customers due to certain contractual terms other than the passage of time and were $69 million at June 30, 2020 and $32 million at Dec. 31, 2019. Accrued revenues recorded as contract assets are usually billed on an annual basis.

Both receivables from customers and contract assets are included in other assets on the consolidated balance sheet.

Contract liabilities represent payments received in advance of providing services under certain contracts and were $195 million at June 30, 2020 and $168 million at Dec. 31, 2019. Contract liabilities are included in other liabilities on the consolidated balance sheet. Revenue recognized in the second quarter of 2020 relating to contract liabilities as of March 31, 2020 was $58 million. Revenue recognized in the first six months of 2020 relating to contract liabilities as of Dec. 31, 2019 was $78 million.

Changes in contract assets and liabilities primarily relate to either party’s performance under the contracts.

Contract costs

Incremental costs for obtaining contracts that are deemed recoverable are capitalized as contract costs. Such costs result from the payment of sales incentives, primarily in the Wealth Management business, and totaled $80 million at June 30, 2020 and $86 million at Dec. 31, 2019. Capitalized sales incentives are amortized based on the transfer of goods or services to which the assets relate and typically average nine years. The amortization of capitalized sales incentives, which is primarily included in staff expense on the consolidated income statement, totaled $5 million in the second quarter of 2020, second quarter of 2019 and first quarter of 2020 and $10 million in both the first six months of 2020 and first six months of 2019.

Costs to fulfill a contract are capitalized when they relate directly to an existing contract or a specific anticipated contract, generate or enhance resources that will be used to fulfill performance obligations, and are recoverable. Such costs generally represent set-up costs, which include any direct cost incurred at the inception of a contract which enables the fulfillment of the performance obligation, and totaled

$14 million at June 30, 2020 and $16 million at Dec. 31, 2019. These capitalized costs are amortized on a straight-line basis over the expected contract period, which generally ranges from seven to nine years. The amortization is included in other expense on the consolidated income statement and totaled $2 million in the second quarter of 2020 and second quarter of 2019, $1 million in the first quarter of 2020 and $3 million in the first six months of 2020 and first six months of 2019. There were no impairments recorded on capitalized contract costs in the first six months of 2020.

Unsatisfied performance obligations

We do not have any unsatisfied performance obligations other than those that are subject to a practical expedient election under ASC 606, Revenue From Contracts With Customers. The practical expedient election applies to (i) contracts with an original expected length of one year or less, and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

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Net interest revenue

6 Months Ended

Jun. 30, 2020

Interest Revenue (Expense), Net [Abstract]

Net interest revenue

Net interest revenue

The following table provides the components of net interest revenue presented on the consolidated income statement.

Net interest revenue	Quarter ended								Year-to-date
(in millions)	June 30, 2020			March 31, 2020		June 30, 2019			June 30, 2020		June 30, 2019
Interest revenue
Deposits with the Federal Reserve and other central banks	$	(7	)	$	80	$	113		$	73	$	252
Deposits with banks	40			58		64			98		127
Federal funds sold and securities purchased under resale agreements	61			396		568			457		1,042
Margin loans	40			87		119			127		254
Non-margin loans	230			309		365			539		720
Securities:
Taxable	556			594		687			1,150		1,393
Exempt from federal income taxes	6			6		10			12		22
Total securities	562			600		697			1,162		1,415
Trading securities	17			40		39			57		75
Total interest revenue	943			1,570		1,965			2,513		3,885
Interest expense
Deposits	(17		)	240		432			223		823
Federal funds purchased and securities sold under repurchase agreements	1			275		372			276		703
Trading liabilities	2			7		11			9		18
Other borrowed funds	7			4		20			11		44
Commercial paper	1			6		18			7		26
Customer payables	(1		)	30		69			29		139
Long-term debt	170			194		241			364		489
Total interest expense	163			756		1,163			919		2,242
Net interest revenue	780			814		802			1,594		1,643
Provision for credit losses	143			169		(8		)	312		(1		)
Net interest revenue after provision for credit losses	$	637		$	645	$	810		$	1,282	$	1,644

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Employee benefit plans

6 Months Ended

Jun. 30, 2020

Retirement Benefits [Abstract]

Employee benefit plans

Employee benefit plans

The components of net periodic benefit (credit) cost are presented below. The service cost component is reflected in staff expense, whereas the remaining components are reflected in other expense.

Net periodic benefit (credit) cost	Quarter ended
	June 30, 2020									March 31, 2020									June 30, 2019
(in millions)	Domestic pension benefits			Foreign pension benefits			Health care benefits			Domestic pension benefits			Foreign pension benefits			Health care benefits			Domestic pension benefits			Foreign pension benefits			Health care benefits
Service cost	$	—		$	3		$	—		$	—		$	3		$	—		$	—		$	3		$	—
Interest cost	39			6			1			39			7			1			45			8			1
Expected return on assets	(79		)	(9		)	(2		)	(80		)	(10		)	(1		)	(84		)	(12		)	(2		)
Other	21			3			—			22			3			(1		)	13			1			—
Net periodic benefit (credit) cost	$	(19	)	$	3		$	(1	)	$	(19	)	$	3		$	(1	)	$	(26	)	$	—		$	(1	)

Net periodic benefit (credit) cost	Year-to-date
	June 30, 2020									June 30, 2019
(in millions)	Domestic pension benefits			Foreign pension benefits			Health care benefits			Domestic pension benefits			Foreign pension benefits			Health care benefits
Service cost	$	—		$	6		$	—		$	—		$	6		$	—
Interest cost	78			13			2			89			16			3
Expected return on assets	(159		)	(19		)	(3		)	(168		)	(23		)	(4		)
Other	43			6			(1		)	26			1			(1		)
Net periodic benefit (credit) cost	$	(38	)	$	6		$	(2	)	$	(53	)	$	—		$	(2	)

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Income taxes

6 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income taxes

Income taxes

BNY Mellon recorded an income tax provision of $216 million (18.3% effective tax rate) in the second quarter of 2020, $264 million (20.5% effective tax rate) in the second quarter of 2019 and $265 million (21.6% effective tax rate) in the first quarter of 2020.

Our total tax reserves as of June 30, 2020 were $178 million compared with $173 million at Dec. 31, 2019. If these tax reserves were unnecessary, $178 million would affect the effective tax rate in future periods. We recognize accrued interest and penalties, if applicable, related to income taxes in income tax expense. Included in the balance sheet at June 30, 2020 is accrued interest, where applicable, of

$34 million. The additional tax expense related to interest for the six months ended June 30, 2020 was $3 million, compared with $6 million for the six months ended June 30, 2019.

It is reasonably possible the total reserve for uncertain tax positions could decrease within the next 12 months by approximately $100 million as a result of adjustments related to tax years that are still subject to examination.

Our federal income tax returns are closed to examination through 2016. Our New York State, New York City and UK income tax returns are closed to examination through 2012.

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Variable interest entities and securitization

6 Months Ended

Jun. 30, 2020

Securitizations And Variable Interest Entities Disclosure [Abstract]

Variable interest entities and securitization

Variable interest entities and securitization

We have variable interests in variable interest entities (“VIEs”), which include investments in retail, institutional and alternative investment funds, including CLO structures in which we provide asset management services, some of which are consolidated.

We earn management fees from these funds as well as performance fees in certain funds and may also provide start-up capital for new funds. The funds are primarily financed by our customers’ investments in the funds’ equity or debt.

Additionally, we invest in qualified affordable housing and renewable energy projects, which are designed to generate a return primarily through the realization of tax credits. The projects, which are structured as limited partnerships and limited liability companies, are also VIEs, but are not consolidated.

The following table presents the incremental assets and liabilities included in the consolidated balance sheet as of June 30, 2020 and Dec. 31, 2019. The net assets of any consolidated VIE are solely available to settle the liabilities of the VIE and to settle any investors’ ownership liquidation requests, including any seed capital we invested in the VIE.

Consolidated investments	June 30, 2020							Dec. 31, 2019
(in millions)	Investment Management funds			Securitization		Total consolidated investments		Investment Management funds			Securitization		Total consolidated investments
Trading assets	$	450		$	400	$	850	$	229		$	400	$	629
Other assets	10			—		10		16			—		16
Total assets	$	460	(a)	$	400	$	860	$	245	(b)	$	400	$	645
Other liabilities	$	4		$	399	$	403	$	1		$	387	$	388
Total liabilities	$	4	(a)	$	399	$	403	$	1	(b)	$	387	$	388
Nonredeemable noncontrolling interests	$	112	(a)	$	—	$	112	$	102	(b)	$	—	$	102

 

(a) Includes voting model entities (“VMEs”) with assets of $283 million, liabilities of $1 million and nonredeemable noncontrolling interests of $37 million.

(b) Includes VMEs with assets of $50 million, liabilities of $1 million and nonredeemable noncontrolling interests of $1 million.

We have not provided financial or other support that was not otherwise contractually required to be provided to our VIEs. Additionally, creditors of any consolidated VIEs do not have any recourse to the general credit of BNY Mellon.

Non-consolidated VIEs

As of June 30, 2020 and Dec. 31, 2019, the following assets and liabilities related to the VIEs where we are

not the primary beneficiary were included in our consolidated balance sheets and primarily related to accounting for our investments in qualified affordable housing and renewable energy projects.

The maximum loss exposure indicated in the table below relates solely to our investments in, and unfunded commitments to, the VIEs.

Non-consolidated VIEs	June 30, 2020						Dec. 31, 2019
(in millions)	Assets		Liabilities		Maximum loss exposure		Assets		Liabilities		Maximum loss exposure
Securities - Available-for-sale (a)	$	199	$	—	$	199	$	208	$	—	$	208
Other	2,237		363		2,609		2,400		422		2,822

(a)

Includes investments in the Company’s sponsored CLOs.

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Preferred stock

6 Months Ended

Jun. 30, 2020

Stockholders' Equity Note [Abstract]

Preferred stock

Preferred stock

The Parent has 100 million authorized shares of preferred stock with a par value of $0.01 per share. The following table summarizes the Parent’s preferred stock issued and outstanding at June 30, 2020 and Dec. 31, 2019.

Preferred stock summary (a)		Total shares issued and outstanding		Carrying value (b)
				(in millions)
		June 30, 2020	Dec. 31, 2019	June 30, 2020		Dec. 31, 2019
	Per annum dividend rate
Series A	Greater of (i) three-month LIBOR plus 0.565% for the related distribution period; or (ii) 4.000%	5,001	5,001	$	500	$	500
Series C	5.2%	5,825	5,825	568		568
Series D	4.50% to but excluding June 20, 2023, then a floating rate equal to the three-month LIBOR plus 2.46%	5,000	5,000	494		494
Series E	4.95% to but excluding June 20, 2020, then a floating rate equal to the three-month LIBOR plus 3.42%	10,000	10,000	990		990
Series F	4.625% to but excluding Sept. 20, 2026, then a floating rate equal to the three-month LIBOR plus 3.131%	10,000	10,000	990		990
Series G	4.70% to but excluding Sept. 20, 2025, then a floating rate equal to the five-year treasury rate plus 4.358%	10,000	—	990		—
Total		45,826	35,826	$	4,532	$	3,542

(a) All outstanding preferred stock is noncumulative perpetual preferred stock with a liquidation preference of $100,000 per share.

(b) The carrying value of the Series C, Series D, Series E, Series F and Series G preferred stock is recorded net of issuance costs.

In May 2020, the Parent issued 1,000,000 depositary shares, each representing a 1/100th interest in a share of the Parent’s Series G Noncumulative Perpetual Preferred Stock (the “Series G Preferred Stock”). The Parent will pay dividends on the Series G Preferred Stock, if declared by its board of directors on each March 20 and September 20, at an annual rate of 4.70%, from the original issue date to but

excluding Sept. 20, 2025; and at a floating rate equal to the five-year treasury rate on the date that is three business days prior to the reset date plus 4.358% for each reset period, from and including Sept. 20, 2025. The floating rate will initially reset on Sept. 20, 2025 and subsequently on each date falling on the fifth anniversary of the preceding reset date.

The table below presents the dividends paid on the Parent’s preferred stock.

Preferred dividends paid
(dollars in millions, except per share amounts)	Depositary shares per share		2Q20				1Q20				2Q19				YTD20				YTD19
			Per share		Total dividend		Per share		Total dividend		Per share		Total dividend		Per share		Total dividend		Per share		Total dividend
Series A	100	(a)	$	1,022.22	$	5	$	1,011.11	$	5	$	1,022.22	$	5	$	2,033.33	$	10	$	2,022.22	$	10
Series C	4,000		1,300.00		8		1,300.00		8		1,300.00		7		2,600.00		16		2,600.00		15
Series D	100		2,250.00		11		N/A		—		2,250.00		11		2,250.00		11		2,250.00		11
Series E	100		2,475.00		25		N/A		—		2,475.00		25		2,475.00		25		2,475.00		25
Series F	100		N/A		—		2,312.50		23		N/A		—		2,312.50		23		2,312.50		23
Total					$	49			$	36			$	48			$	85			$	84

(a) Represents Normal Preferred Capital Securities.

N/A - Not applicable.

For additional information on the preferred stock, see Note 15 of the Notes to Consolidated Financial Statements in our 2019 Annual Report.

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Other comprehensive income (loss)

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

Other comprehensive income (loss)

Other comprehensive income (loss)

Components of other comprehensive income (loss)	Quarter ended
	June 30, 2020									March 31, 2020									June 30, 2019
(in millions)	Pre-tax amount			Tax (expense) benefit			After-tax amount			Pre-tax amount			Tax (expense) benefit			After-tax amount			Pre-tax amount			Tax (expense) benefit			After-tax amount
Foreign currency translation:
Foreign currency translation adjustments arising during the period (a)	$	104		$	11		$	115		$	(265	)	$	(104	)	$	(369	)	$	29		$	(19	)	$	10
Total foreign currency translation	104			11			115			(265		)	(104		)	(369		)	29			(19		)	10
Unrealized gain (loss) on assets available-for-sale:
Unrealized gain (loss) arising during period	989			(236		)	753			243			(60		)	183			384			(97		)	287
Reclassification adjustment (b)	(9		)	2			(7		)	(9		)	2			(7		)	(7		)	2			(5		)
Net unrealized gain (loss) on assets available-for-sale	980			(234		)	746			234			(58		)	176			377			(95		)	282
Defined benefit plans:
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost (b)	24			(5		)	19			24			(6		)	18			12			(2		)	10
Total defined benefit plans	24			(5		)	19			24			(6		)	18			12			(2		)	10
Unrealized gain (loss) on cash flow hedges:
Unrealized hedge gain (loss) arising during period	3			(1		)	2			(13		)	3			(10		)	2			(2		)	—
Reclassification of net (gain) loss to net income:
Foreign exchange (“FX”) contracts - staff expense	3			(1		)	2			(1		)	—			(1		)	—			—			—
Total reclassifications to net income	3			(1		)	2			(1		)	—			(1		)	—			—			—
Net unrealized gain (loss) on cash flow hedges	6			(2		)	4			(14		)	3			(11		)	2			(2		)	—
Total other comprehensive income (loss)	$	1,114		$	(230	)	$	884		$	(21	)	$	(165	)	$	(186	)	$	420		$	(118	)	$	302

(a) Includes the impact of hedges of net investments in foreign subsidiaries. See Note 17 for additional information.

(b) The reclassification adjustment related to the unrealized gain (loss) on assets available-for-sale is recorded as net securities gains on the consolidated income statement. The amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost is recorded as staff expense on the consolidated income statement.

Components of other comprehensive income (loss)	Year-to-date
	June 30, 2020									June 30, 2019
(in millions)	Pre-tax amount			Tax (expense) benefit			After-tax amount			Pre-tax amount			Tax (expense) benefit			After-tax amount
Foreign currency translation:
Foreign currency translation adjustments arising during the period (a)	$	(161	)	$	(93	)	$	(254	)	$	56		$	(17	)	$	39
Total foreign currency translation	(161		)	(93		)	(254		)	56			(17		)	39
Unrealized gain (loss) on assets available-for-sale:
Unrealized gain (loss) arising during period	1,232			(296		)	936			706			(180		)	526
Reclassification adjustment (b)	(18		)	4			(14		)	(8		)	2			(6		)
Net unrealized gain (loss) on assets available-for-sale	1,214			(292		)	922			698			(178		)	520
Defined benefit plans:
Net gain (loss) arising during the period	—			—			—			(11		)	2			(9		)
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost (b)	48			(11		)	37			25			(5		)	20
Total defined benefit plans	48			(11		)	37			14			(3		)	11
Unrealized (loss) gain on cash flow hedges:
Unrealized hedge (loss) gain arising during period	(10		)	2			(8		)	8			(6		)	2
Reclassification of net loss (gain) to net income:
FX contracts - staff expense	2			(1		)	1			1			2			3
Total reclassifications to net income	2			(1		)	1			1			2			3
Net unrealized (loss) gain on cash flow hedges	(8		)	1			(7		)	9			(4		)	5
Total other comprehensive income (loss)	$	1,093		$	(395	)	$	698		$	777		$	(202	)	$	575

(a) Includes the impact of hedges of net investments in foreign subsidiaries. See Note 17 for additional information.

(b)

The reclassification adjustment related to the unrealized gain (loss) on assets available-for-sale is recorded as net securities gains on the consolidated income statement. The amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost is recorded as staff expense on the consolidated income statement.

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Fair value measurement

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Fair value measurement

Fair value measurement

Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. A three-level hierarchy for fair value measurements is utilized based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. BNY Mellon’s own creditworthiness is considered when valuing liabilities. See Note 20 of the Notes to Consolidated Financial Statements in our 2019 Annual Report for

information on how we determine fair value and the fair value hierarchy.

The following tables present the financial instruments carried at fair value at June 30, 2020 and Dec. 31, 2019, by caption on the consolidated balance sheet and by the three-level valuation hierarchy. We have included credit ratings information in certain of the tables because the information indicates the degree of credit risk to which we are exposed, and significant changes in ratings classifications could result in increased risk for us.

Assets measured at fair value on a recurring basis at June 30, 2020													Total carrying value
(dollars in millions)	Level 1			Level 2			Level 3			Netting (a)
Available-for-sale securities:
Agency RMBS	$	—		$	26,437		$	—		$	—		$	26,437
U.S. Treasury	25,137			—			—			—			25,137
Sovereign debt/sovereign guaranteed	8,570			7,317			—			—			15,887
Agency commercial MBS	—			9,988			—			—			9,988
Foreign covered bonds	—			5,519			—			—			5,519
Supranational	—			5,448			—			—			5,448
CLOs	—			4,432			—			—			4,432
Foreign government agencies	—			3,578			—			—			3,578
U.S. government agencies	—			2,806			—			—			2,806
Other ABS	—			2,743			—			—			2,743
Non-agency commercial MBS	—			2,630			—			—			2,630
Commercial paper/CDs	—			1,853			—			—			1,853
Non-agency RMBS (b)	—			1,598			—			—			1,598
State and political subdivisions	—			1,179			—			—			1,179
Corporate bonds	—			831			—			—			831
Other debt securities	—			1			—			—			1
Total available-for-sale securities	33,707			76,360			—			—			110,067
Trading assets:
Debt instruments	4,782			2,775			—			—			7,557
Equity instruments (c)	2,397			—			—			—			2,397
Derivative assets not designated as hedging:
Interest rate	5			5,496			—			(2,436		)	3,065
Foreign exchange	—			4,322			—			(3,204		)	1,118
Equity and other contracts	2			11			—			—			13
Total derivative assets not designated as hedging	7			9,829			—			(5,640		)	4,196
Total trading assets	7,186			12,604			—			(5,640		)	14,150
Other assets:
Derivative assets designated as hedging:
Foreign exchange	—			137			—			—			137
Total derivative assets designated as hedging	—			137			—			—			137
Other assets (d)	52			153			—			—			205
Assets measured at NAV (d)													187
Subtotal assets of operations at fair value	40,945			89,254			—			(5,640		)	124,746
Percentage of assets of operations prior to netting	31		%	69		%	—		%
Assets of consolidated investment management funds	416			44			—			—			460
Total assets	$	41,361		$	89,298		$	—		$	(5,640	)	$	125,206
Percentage of total assets prior to netting	32		%	68		%	—		%

Liabilities measured at fair value on a recurring basis at June 30, 2020													Total carrying value
(dollars in millions)	Level 1			Level 2			Level 3			Netting (a)
Trading liabilities:
Debt instruments	$	2,589		$	75		$	—		$	—		$	2,664
Equity instruments	20			—			—			—			20
Derivative liabilities not designated as hedging:
Interest rate	7			4,661			—			(2,680		)	1,988
Foreign exchange	—			4,036			—			(3,134		)	902
Equity and other contracts	1			23			—			(3		)	21
Total derivative liabilities not designated as hedging	8			8,720			—			(5,817		)	2,911
Total trading liabilities	2,617			8,795			—			(5,817		)	5,595
Long-term debt (c)	—			399			—			—			399
Other liabilities – derivative liabilities designated as hedging:
Interest rate	—			915			—			—			915
Foreign exchange	—			49			—			—			49
Total other liabilities – derivative liabilities designated as hedging	—			964			—			—			964
Subtotal liabilities of operations at fair value	2,617			10,158			—			(5,817		)	6,958
Percentage of liabilities of operations prior to netting	20		%	80		%	—		%
Liabilities of consolidated investment management funds	—			4			—			—			4
Total liabilities	$	2,617		$	10,162		$	—		$	(5,817	)	$	6,962
Percentage of total liabilities prior to netting	20		%	80		%	—		%

(a) ASC 815, Derivatives and Hedging, permits the netting of derivative receivables and derivative payables under legally enforceable master netting agreements and permits the netting of cash collateral. Netting is applicable to derivatives not designated as hedging instruments included in trading assets or trading liabilities and derivatives designated as hedging instruments included in other assets or other liabilities. Netting is allocated to the derivative products based on the net fair value of each product.

(b) Includes $538 million in Level 2 that was included in the former Grantor Trust.

(c) Includes certain interests in securitizations.

(d) Includes seed capital, private equity investments and other assets.

Assets measured at fair value on a recurring basis at Dec. 31, 2019													Total carrying value
(dollars in millions)	Level 1			Level 2			Level 3			Netting (a)
Available-for-sale securities:
Agency RMBS	$	—		$	27,043		$	—		$	—		$	27,043
U.S. Treasury	15,431			—			—			—			15,431
Sovereign debt/sovereign guaranteed	7,784			4,862			—			—			12,646
Agency commercial MBS	—			9,417			—			—			9,417
Foreign covered bonds	—			4,197			—			—			4,197
CLOs	—			4,063			—			—			4,063
Supranational	—			3,709			—			—			3,709
Foreign government agencies	—			2,643			—			—			2,643
Non-agency commercial MBS	—			2,178			—			—			2,178
Other ABS	—			2,143			—			—			2,143
U.S. government agencies	—			1,949			—			—			1,949
Non-agency RMBS (b)	—			1,233			—			—			1,233
State and political subdivisions	—			1,044			—			—			1,044
Corporate bonds	—			853			—			—			853
Other debt securities	—			1			—			—			1
Total available-for-sale securities	23,215			65,335			—			—			88,550
Trading assets:
Debt instruments	1,568			4,243			—			—			5,811
Equity instruments (c)	4,539			—			—			—			4,539
Derivative assets not designated as hedging:
Interest rate	4			3,686			—			(1,792		)	1,898
Foreign exchange	—			5,331			—			(4,021		)	1,310
Equity and other contracts	—			19			—			(6		)	13
Total derivative assets not designated as hedging	4			9,036			—			(5,819		)	3,221
Total trading assets	6,111			13,279			—			(5,819		)	13,571
Other assets:
Derivative assets designated as hedging:
Foreign exchange	—			21			—			—			21
Total derivative assets designated as hedging	—			21			—			—			21
Other assets (d)	38			179			—			—			217
Assets measured at NAV (d)													181
Subtotal assets of operations at fair value	29,364			78,814			—			(5,819		)	102,540
Percentage of assets of operations prior to netting	27		%	73		%	—		%
Assets of consolidated investment management funds	212			33			—			—			245
Total assets	$	29,576		$	78,847		$	—		$	(5,819	)	$	102,785
Percentage of total assets prior to netting	27		%	73		%	—		%

Liabilities measured at fair value on a recurring basis at Dec. 31, 2019													Total carrying value
(dollars in millions)	Level 1			Level 2			Level 3			Netting (a)
Trading liabilities:
Debt instruments	$	1,477		$	107		$	—		$	—		$	1,584
Equity instruments	73			—			—			—			73
Derivative liabilities not designated as hedging:
Interest rate	6			3,244			—			(1,986		)	1,264
Foreign exchange	—			5,340			—			(3,428		)	1,912
Equity and other contracts	3			6			—			(1		)	8
Total derivative liabilities not designated as hedging	9			8,590			—			(5,415		)	3,184
Total trading liabilities	1,559			8,697			—			(5,415		)	4,841
Long-term debt (c)	—			387			—			—			387
Other liabilities – derivative liabilities designated as hedging:
Interest rate	—			350			—			—			350
Foreign exchange	—			257			—			—			257
Total other liabilities – derivative liabilities designated as hedging	—			607			—			—			607
Subtotal liabilities of operations at fair value	1,559			9,691			—			(5,415		)	5,835
Percentage of liabilities of operations prior to netting	14		%	86		%	—		%
Liabilities of consolidated investment management funds	1			—			—			—			1
Total liabilities	$	1,560		$	9,691		$	—		$	(5,415	)	$	5,836
Percentage of total liabilities prior to netting	14		%	86		%	—		%

(a) ASC 815, Derivatives and Hedging, permits the netting of derivative receivables and derivative payables under legally enforceable master netting agreements and permits the netting of cash collateral. Netting is applicable to derivatives not designated as hedging instruments included in trading assets or trading liabilities and derivatives designated as hedging instruments included in other assets or other liabilities. Netting is allocated to the derivative products based on the net fair value of each product.

(b) Includes $640 million in Level 2 that was included in the former Grantor Trust.

(c) Includes certain interests in securitizations.

(d) Includes seed capital, private equity investments and other assets.

Details of certain available-for-sale securities measured at fair value on a recurring basis	June 30, 2020											Dec. 31, 2019
	Total carrying value			Ratings (a)								Total carrying value			Ratings (a)
				AAA/ AA-		A+/ A-		BBB+/ BBB-		BB+ and lower					AAA/ AA-		A+/ A-		BBB+/ BBB-		BB+ and lower
(dollars in millions)			(b)											(b)
Non-agency RMBS (c), originated in:
2007-2020	$	938		82	%	1	%	—	%	17	%	$	464		55	%	1	%	—	%	44	%
2006	250			—		22		—		78		291			—		21		—		79
2005	262			5		2		7		86		305			5		2		8		85
2004 and earlier	148			21		22		8		49		173			22		24		4		50
Total non-agency RMBS	$	1,598		51	%	6	%	2	%	41	%	$	1,233		25	%	9	%	3	%	63	%
Non-agency commercial MBS originated in:
2009-2020	$	2,630		100	%	—	%	—	%	—	%	$	2,178		98	%	2	%	—	%	—	%
Foreign covered bonds:
Canada	$	2,241		100	%	—	%	—	%	—	%	$	1,798		100	%	—	%	—	%	—	%
UK	1,093			100		—		—		—		984			100		—		—		—
Australia	750			100		—		—		—		431			100		—		—		—
Norway	533			100		—		—		—		287			100		—		—		—
Germany	407			100		—		—		—		357			100		—		—		—
Other	495			100		—		—		—		340			100		—		—		—
Total foreign covered bonds	$	5,519		100	%	—	%	—	%	—	%	$	4,197		100	%	—	%	—	%	—	%
Sovereign debt/sovereign guaranteed:
UK	$	3,773		100	%	—	%	—	%	—	%	$	3,318		100	%	—	%	—	%	—	%
Germany	2,346			100		—		—		—		1,997			100		—		—		—
France	2,238			100		—		—		—		1,272			100		—		—		—
Spain	1,961			—		4		96		—		1,453			—		6		94		—
Italy	1,069			—		—		100		—		1,260			—		—		100		—
Singapore	931			100		—		—		—		742			100		—		—		—
Ireland	676			29		71		—		—		301			—		100		—		—
Netherlands	564			100		—		—		—		791			100		—		—		—
Canada	502			100		—		—		—		271			100		—		—		—
Japan	434			—		100		—		—		274			—		100		—		—
Belgium	411			100		—		—		—		79			100		—		—		—
Austria	331			100		—		—		—		240			100		—		—		—
Hong Kong	330			100		—		—		—		411			100		—		—		—
Other (d)	321			45		—		21		34		237			39		4		—		57
Total sovereign debt/sovereign guaranteed	$	15,887		74	%	6	%	19	%	1	%	$	12,646		73	%	5	%	21	%	1	%
Foreign government agencies:
Germany	$	1,398		100	%	—	%	—	%	—	%	$	1,131		100	%	—	%	—	%	—	%
Netherlands	730			100		—		—		—		678			100		—		—		—
Canada	321			62		38		—		—		71			—		100		—		—
France	281			100		—		—		—		42			100		—		—		—
Sweden	276			100		—		—		—		202			100		—		—		—
Finland	241			100		—		—		—		245			100		—		—		—
Other	331			84		16		—		—		274			79		21		—		—
Total foreign government agencies	$	3,578		95	%	5	%	—	%	—	%	$	2,643		95	%	5	%	—	%	—	%

(a) Represents ratings by S&P or the equivalent.

(b) At June 30, 2020 and Dec. 31, 2019, sovereign debt/sovereign guaranteed securities were included in Level 1 and Level 2 in the valuation hierarchy. All other assets in the table are Level 2 assets in the valuation hierarchy.

(c) Includes $538 million at June 30, 2020 and $640 million at Dec. 31, 2019 that were included in the former Grantor Trust.

(d)

Includes non-investment grade sovereign debt/sovereign guaranteed securities related to Brazil of $109 million at June 30, 2020 and $134 million at Dec. 31, 2019.

Assets and liabilities measured at fair value on a nonrecurring basis

Under certain circumstances, we make adjustments to the fair value of our assets, liabilities and unfunded lending-related commitments although they are not measured at fair value on an ongoing basis.

Examples would be the recording of an impairment of an asset and non-readily marketable equity securities carried at cost with upward or downward adjustments.

The following table presents the financial instruments carried on the consolidated balance sheet by caption and level in the fair value hierarchy as of June 30, 2020 and Dec. 31, 2019.

Assets measured at fair value on a nonrecurring basis	June 30, 2020								Dec. 31, 2019
							Total carrying value								Total carrying value
(in millions)	Level 1		Level 2		Level 3				Level 1		Level 2		Level 3
Loans (a)	$	—	$	53	$	—	$	53	$	—	$	58	$	—	$	58
Other assets (b)	—		107		—		107		—		64		—		64
Total assets at fair value on a nonrecurring basis	$	—	$	160	$	—	$	160	$	—	$	122	$	—	$	122

 

(a) The fair value of these loans decreased less than $1 million in the second quarter of 2020 and the fourth quarter of 2019, based on the fair value of the underlying collateral, as required by guidance in ASC 326, Financial Instruments – Credit Losses, with an offset to the allowance for credit losses.

(b)

Includes non-readily marketable equity securities carried at cost with upward or downward adjustments and other assets received in satisfaction of debt.

Estimated fair value of financial instruments

The following tables present the estimated fair value and the carrying amount of financial instruments not carried at fair value on the consolidated balance sheet at June 30, 2020 and Dec. 31, 2019, by caption on the consolidated balance sheet and by the valuation hierarchy.

Summary of financial instruments	June 30, 2020
(in millions)	Level 1		Level 2		Level 3		Total estimated fair value		Carrying amount
Assets:
Interest-bearing deposits with the Federal Reserve and other central banks	$	—	$	112,728	$	—	$	112,728	$	112,728
Interest-bearing deposits with banks	—		18,063		—		18,063		18,045
Federal funds sold and securities purchased under resale agreements	—		36,638		—		36,638		36,638
Securities held-to-maturity	5,815		40,168		—		45,983		44,615
Loans (a)	—		54,377		—		54,377		54,067
Other financial assets	4,776		1,165		—		5,941		5,941
Total	$	10,591	$	263,139	$	—	$	273,730	$	272,034
Liabilities:
Noninterest-bearing deposits	$	—	$	78,100	$	—	$	78,100	$	78,100
Interest-bearing deposits	—		226,917		—		226,917		227,370
Federal funds purchased and securities sold under repurchase agreements	—		14,512		—		14,512		14,512
Payables to customers and broker-dealers	—		25,012		—		25,012		25,012
Commercial paper	—		665		—		665		665
Borrowings	—		1,852		—		1,852		1,852
Long-term debt	—		28,875		—		28,875		27,167
Total	$	—	$	375,933	$	—	$	375,933	$	374,678

(a) Does not include the leasing portfolio.

Summary of financial instruments	Dec. 31, 2019
(in millions)	Level 1		Level 2		Level 3		Total estimated fair value		Carrying amount
Assets:
Interest-bearing deposits with the Federal Reserve and other central banks	$	—	$	95,042	$	—	$	95,042	$	95,042
Interest-bearing deposits with banks	—		14,832		—		14,832		14,811
Federal funds sold and securities purchased under resale agreements	—		30,182		—		30,182		30,182
Securities held-to-maturity	4,630		30,175		—		34,805		34,483
Loans (a)	—		54,194		—		54,194		53,718
Other financial assets	4,830		1,233		—		6,063		6,063
Total	$	9,460	$	225,658	$	—	$	235,118	$	234,299
Liabilities:
Noninterest-bearing deposits	$	—	$	57,630	$	—	$	57,630	$	57,630
Interest-bearing deposits	—		200,846		—		200,846		201,836
Federal funds purchased and securities sold under repurchase agreements	—		11,401		—		11,401		11,401
Payables to customers and broker-dealers	—		18,758		—		18,758		18,758
Commercial paper	—		3,959		—		3,959		3,959
Borrowings	—		917		—		917		917
Long-term debt	—		27,858		—		27,858		27,114
Total	$	—	$	321,369	$	—	$	321,369	$	321,615

(a)

Does not include the leasing portfolio.

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Fair value option

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Fair value option

Fair value option

We elected fair value as an alternative measurement for selected financial assets and liabilities that are not otherwise required to be measured at fair value, including the assets and liabilities of consolidated investment management funds and certain long-term debt. The following table presents the assets and liabilities of consolidated investment management funds, at fair value.

Assets and liabilities of consolidated investment management funds, at fair value
	June 30, 2020		Dec. 31, 2019
(in millions)
Assets of consolidated investment management funds:
Trading assets	$	450	$	229
Other assets	10		16
Total assets of consolidated investment management funds	$	460	$	245
Liabilities of consolidated investment management funds:
Other liabilities	4		1
Total liabilities of consolidated investment management funds	$	4	$	1

BNY Mellon values the assets and liabilities of its consolidated investment management funds using quoted prices for identical assets or liabilities in active markets or observable inputs such as quoted

prices for similar assets or liabilities. Quoted prices for either identical or similar assets or liabilities in inactive markets may also be used. Accordingly, fair value best reflects the interests BNY Mellon holds in the economic performance of the consolidated investment management funds. Changes in the value of the assets and liabilities are recorded in the consolidated income statement as investment income of consolidated investment management funds and in the interest of investment management fund note holders, respectively.

We have elected the fair value option on $240 million of long-term debt. The fair value of this long-term debt was $399 million at June 30, 2020 and $387 million at Dec. 31, 2019. The long-term debt is valued using observable market inputs and is included in Level 2 of the valuation hierarchy.

The following table presents the changes in fair value of long-term debt recorded in foreign exchange and other trading revenue in the consolidated income statement.

Change in fair value of long-term debt (a)
(in millions)	2Q20			1Q20			2Q19			YTD20			YTD19
Foreign exchange and other trading revenue	$	(2	)	$	(10	)	$	(7	)	$	(12	)	$	(12	)

(a)

The changes in fair value are approximately offset by an economic hedge included in foreign exchange and other trading revenue.

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Derivative instruments

6 Months Ended

Jun. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative instruments

Derivative instruments

We use derivatives to manage exposure to market risk, including interest rate risk, equity price risk and foreign currency risk, as well as credit risk. Our trading activities are focused on acting as a market-maker for our customers and facilitating customer trades in compliance with the Volcker Rule.

The notional amounts for derivative financial instruments express the dollar volume of the transactions; however, credit risk is much smaller. We perform credit reviews and enter into netting agreements and collateral arrangements to minimize the credit risk of derivative financial instruments. We enter into offsetting positions to reduce exposure to foreign currency, interest rate and equity price risk.

Use of derivative financial instruments involves reliance on counterparties. Failure of a counterparty to honor its obligation under a derivative contract is a risk we assume whenever we engage in a derivative contract. There were no counterparty default losses recorded in the second quarter of 2020.

Hedging derivatives

We utilize interest rate swap agreements to manage our exposure to interest rate fluctuations. We enter into fair value hedges as an interest rate risk management strategy to reduce fair value variability by converting certain fixed rate interest payments associated with available-for-sale securities and long-term debt to floating interest rates. We also utilize interest rate swaps and forward exchange contracts as cash flow hedges to manage our exposure to interest rate and foreign exchange rate changes.

The available-for-sale securities hedged consist of U.S. Treasury, agency and non-agency commercial MBS, sovereign debt/sovereign guaranteed, corporate bonds and foreign covered bonds. At June 30, 2020, $13.9 billion par value of available-for-sale securities were hedged with interest rate swaps designated as fair value hedges that had notional values of $13.9 billion.

The fixed rate long-term debt instruments hedged generally have original maturities of five to 30 years. In fair value hedging relationships, debt is hedged with “receive fixed rate, pay variable rate” swaps. At June 30, 2020, $13.9 billion par value of debt was

hedged with interest rate swaps designated as fair value hedges that had notional values of $13.9 billion.

In addition, we utilize forward foreign exchange contracts as hedges to mitigate foreign exchange exposures. We use forward foreign exchange contracts as cash flow hedges to convert certain forecasted non-U.S. dollar revenue and expenses into U.S. dollars. We use forward foreign exchange contracts with maturities of 12 months or less as cash flow hedges to hedge our foreign exchange exposure to currencies such as Indian rupee, British pound, Hong Kong dollar, Singapore dollar and Polish zloty used in revenue and expense transactions for entities that have the U.S. dollar as their functional currency. As of June 30, 2020, the hedged forecasted foreign currency transactions and designated forward foreign exchange contract hedges were $312 million (notional), with a pre-tax loss of $3 million recorded in accumulated OCI. This loss will be reclassified to earnings over the next 12 months.

We also utilize forward foreign exchange contracts as fair value hedges of the foreign exchange risk associated with available-for-sale securities. Forward points are designated as an excluded component and amortized into earnings over the hedge period. The unamortized derivative value associated with the excluded component is recognized in accumulated OCI. At June 30, 2020, $131 million par value of available-for-sale securities was hedged with foreign currency forward contracts that had a notional value of $131 million.

Forward foreign exchange contracts are also used to hedge the value of our net investments in foreign subsidiaries. These forward foreign exchange contracts have maturities of less than one year. The derivatives employed are designated as hedges of changes in value of our foreign investments due to exchange rates. The change in fair market value of these forward foreign exchange contracts is reported within foreign currency translation adjustments in shareholders’ equity, net of tax. At June 30, 2020, forward foreign exchange contracts with notional amounts totaling $7.6 billion were designated as net investment hedges.

In addition to forward foreign exchange contracts, we also designate non-derivative financial instruments as hedges of our net investments in foreign subsidiaries. Those non-derivative financial instruments designated as hedges of our net investments in

foreign subsidiaries were all long-term liabilities of BNY Mellon and, at June 30, 2020, had a combined U.S. dollar equivalent carrying value of $172 million.

The following table presents the pre-tax gains (losses) related to our fair value and cash flow hedging activities recognized in the consolidated income statement.

Income statement impact of fair value and cash flow hedges
(in millions)	Location of gains (losses)	2Q20			1Q20			2Q19			YTD20			YTD19
Interest rate fair value hedges of available-for-sale securities
Derivative	Interest revenue	$	19		$	(1,033	)	$	(486	)	$	(1,014	)	$	(869	)
Hedged item	Interest revenue	(15		)	1,011			480			996			856
Interest rate fair value hedges of long-term debt
Derivative	Interest expense	47			714			300			761			485
Hedged item	Interest expense	(49		)	(708		)	(298		)	(757		)	(482		)
Foreign exchange fair value hedges of available-for-sale securities
Derivative (a)	Other revenue	5			7			(5		)	12			1
Hedged item	Other revenue	(5		)	(7		)	5			(12		)	—
Cash flow hedges of forecasted FX exposures
(Loss) gain reclassified from OCI into income	Staff expense	(3		)	1			—			(2		)	(1		)
(Loss) recognized in the consolidated income statement due to fair value and cash flow hedging relationships		$	(1	)	$	(15	)	$	(4	)	$	(16	)	$	(10	)

(a) Includes gains of less than $1 million in the second quarter of 2020 and first quarter of 2020, a de minimis gain in the second quarter of 2019, a gain of less than $1 million in the first six months of 2020 and a gain of $1 million in the first six months of 2019 associated with the amortization of the excluded component. At June 30, 2020 and Dec. 31, 2019, the remaining accumulated OCI balance associated with the excluded component was de minimis.

The following table presents the impact of hedging derivatives used in net investment hedging relationships.

Impact of derivative instruments used in net investment hedging relationships
(in millions)
Derivatives in net investment hedging relationships	Gain or (loss) recognized in accumulated OCI on derivatives											Location of gain or (loss) reclassified from accumulated OCI into income	Gain or (loss) reclassified from accumulated OCI into income
	2Q20			1Q20		2Q19		YTD20		YTD19			2Q20		1Q20		2Q19		YTD20		YTD19
FX contracts	$	(45	)	$	437	$	76	$	392	$	70	Net interest revenue	$	—	$	—	$	—	$	—	$	—

The following table presents information on the hedged items in fair value hedging relationships.

Hedged items in fair value hedging relationships	Carrying amount of hedged asset or liability				Hedge accounting basis adjustment increase (decrease) (a)
(in millions)	June 30, 2020		Dec. 31, 2019		June 30, 2020		Dec. 31, 2019
Available-for-sale securities (b)(c)	$	13,952	$	13,792	$	1,817	$	687
Long-term debt	$	14,956	$	13,945	$	919	$	116

(a) Includes $196 million and $53 million of basis adjustment increases on discontinued hedges associated with available-for-sale securities at June 30, 2020 and Dec. 31, 2019, respectively, and $156 million and $200 million of basis adjustment decreases on discontinued hedges associated with long-term debt at June 30, 2020 and Dec. 31, 2019, respectively.

(b) Excludes hedged items where only foreign currency risk is the designated hedged risk, as the basis adjustments related to foreign currency hedges will not reverse through the consolidated income statement in future periods. The carrying amount excluded for available-for-sale securities was $131 million at June 30, 2020 and $142 million at Dec. 31, 2019.

(c) Carrying amount represents the amortized cost.

The following table summarizes the notional amount and carrying values of our total derivative portfolio at June 30, 2020 and Dec. 31, 2019.

Impact of derivative instruments on the balance sheet	Notional value				Asset derivatives fair value						Liability derivatives fair value
	June 30, 2020		Dec. 31, 2019		June 30, 2020			Dec. 31, 2019			June 30, 2020			Dec. 31, 2019
(in millions)
Derivatives designated as hedging instruments: (a)(b)
Interest rate contracts	$	27,775	$	28,365	$	—		$	—		$	915		$	350
Foreign exchange contracts	8,040		8,390		137			21			49			257
Total derivatives designated as hedging instruments					$	137		$	21		$	964		$	607
Derivatives not designated as hedging instruments: (b)(c)
Interest rate contracts	$	217,613	$	306,790	$	5,501		$	3,690		$	4,668		$	3,250
Foreign exchange contracts	781,991		848,961		4,322			5,331			4,036			5,340
Equity contracts	1,657		3,189		13			19			22			5
Credit contracts	165		165		—			—			2			4
Total derivatives not designated as hedging instruments					$	9,836		$	9,040		$	8,728		$	8,599
Total derivatives fair value (d)					$	9,973		$	9,061		$	9,692		$	9,206
Effect of master netting agreements (e)					(5,640		)	(5,819		)	(5,817		)	(5,415		)
Fair value after effect of master netting agreements					$	4,333		$	3,242		$	3,875		$	3,791

(a) The fair value of asset derivatives and liability derivatives designated as hedging instruments is recorded as other assets and other liabilities, respectively, on the consolidated balance sheet.

(b) For derivative transactions settled at clearing organizations, cash collateral exchanged is deemed a settlement of the derivative each day. The settlement reduces the gross fair value of derivative assets and liabilities and results in a corresponding decrease in the effect of master netting agreements, with no impact to the consolidated balance sheet.

(c) The fair value of asset derivatives and liability derivatives not designated as hedging instruments is recorded as trading assets and trading liabilities, respectively, on the consolidated balance sheet.

(d) Fair values are on a gross basis, before consideration of master netting agreements, as required by ASC 815, Derivatives and Hedging.

(e) Effect of master netting agreements includes cash collateral received and paid of $869 million and $1,046 million, respectively, at June 30, 2020, and $1,022 million and $618 million, respectively, at Dec. 31, 2019.

Trading activities (including trading derivatives)

Our trading activities are focused on acting as a market-maker for our customers, facilitating customer trades and risk mitigating economic hedging in compliance with the Volcker Rule. The change in the fair value of the derivatives utilized in our trading activities is recorded in foreign exchange and other trading revenue on the consolidated income statement.

The following table presents our foreign exchange and other trading revenue.

Foreign exchange and other trading revenue
(in millions)	2Q20			1Q20		2Q19		YTD20		YTD19
Foreign exchange	$	174		$	253	$	150	$	427	$	310
Other trading (loss) revenue	(8		)	66		16		58		26
Total foreign exchange and other trading revenue	$	166		$	319	$	166	$	485	$	336

Foreign exchange revenue includes income from purchasing and selling foreign currencies and

currency forwards, futures and options. Other trading revenue reflects results from trading in cash instruments, including fixed income and equity securities and non-foreign exchange derivatives.

We also use derivative financial instruments as risk mitigating economic hedges, which are not formally designated as accounting hedges. This includes hedging the foreign currency, interest rate or market risks inherent in some of our balance sheet exposures, such as seed capital investments and deposits, as well as certain investment management fee revenue streams. We also use total return swaps to economically hedge obligations arising from the Company’s deferred compensation plan whereby the participants defer compensation and earn a return linked to the performance of investments they select. The gains or losses on these total return swaps are recorded in staff expense on the consolidated income statement and were gains of $28 million in the second quarter of 2020 and $5 million in the second quarter of 2019, losses of $41 million in the first quarter of 2020 and $13 million in the first six months of 2020 and a gain of $23 million in the first six months of 2019.

We manage trading risk through a system of position limits, a value-at-risk (“VaR”) methodology based on historical simulation and other market sensitivity measures. Risk is monitored and reported to senior management by a separate unit, independent from trading, on a daily basis. Based on certain assumptions, the VaR methodology is designed to capture the potential overnight pre-tax dollar loss from adverse changes in fair values of all trading positions. The calculation assumes a one-day holding period, utilizes a 99% confidence level and incorporates non-linear product characteristics. The VaR model is one of several statistical models used to develop economic capital results, which are allocated to lines of business for computing risk-adjusted performance.

VaR methodology does not evaluate risk attributable to extraordinary financial, economic or other occurrences. As a result, the risk assessment process includes a number of stress scenarios based upon the risk factors in the portfolio and management’s assessment of market conditions. Additional stress scenarios based upon historical market events are also performed. Stress tests may incorporate the impact of reduced market liquidity and the breakdown of historically observed correlations and extreme scenarios. VaR and other statistical measures, stress testing and sensitivity analysis are incorporated into other risk management materials.

Counterparty credit risk and collateral

We assess the credit risk of our counterparties through regular examination of their financial statements, confidential communication with the management of those counterparties and regular monitoring of publicly available credit rating information. This and other information is used to develop proprietary credit rating metrics used to assess credit quality.

Collateral requirements are determined after a comprehensive review of the credit quality of each counterparty. Collateral is generally held or pledged in the form of cash and/or highly liquid government securities. Collateral requirements are monitored and adjusted daily.

Additional disclosures concerning derivative financial instruments are provided in Note 15.

Disclosure of contingent features in over-the-counter (“OTC”) derivative instruments

Certain OTC derivative contracts and/or collateral agreements contain credit-risk contingent features triggered upon a rating downgrade in which the counterparty has the right to request additional collateral or the right to terminate the contracts in a net liability position.

The following table shows the aggregate fair value of OTC derivative contracts in net liability positions that contained credit-risk contingent features and the value of collateral that has been posted.

	June 30, 2020		Dec. 31, 2019
(in millions)
Aggregate fair value of OTC derivatives in net liability positions (a)	$	5,951	$	3,442
Collateral posted	$	6,372	$	3,671

(a) Before consideration of cash collateral.

The aggregate fair value of OTC derivative contracts containing credit-risk contingent features can fluctuate from quarter to quarter due to changes in market conditions, composition of counterparty trades, new business or changes to the contingent features.

The Bank of New York Mellon, our largest banking subsidiary, enters into the substantial majority of our OTC derivative contracts and/or collateral agreements. As such, the contingent features may be triggered if The Bank of New York Mellon’s long-term issuer rating was downgraded.

The following table shows the fair value of contracts falling under early termination provisions that were in net liability positions for three key ratings triggers.

Potential close-out exposures (fair value) (a)
	June 30, 2020		Dec. 31, 2019
(in millions)
If The Bank of New York Mellon’s rating changed to: (b)
A3/A-	$	31	$	56
Baa2/BBB	$	558	$	608
Ba1/BB+	$	2,981	$	2,084

(a) The amounts represent potential total close-out values if The Bank of New York Mellon’s long-term issuer rating were to immediately drop to the indicated levels, and do not reflect collateral posted.

(b) Represents ratings by Moody’s/S&P.

If The Bank of New York Mellon’s debt rating had fallen below investment grade on June 30, 2020 and Dec. 31, 2019, existing collateral arrangements would

have required us to post additional collateral of $31 million and $63 million, respectively.

The following tables present derivative and financial instruments and their related offsets. There were no derivative instruments or financial instruments subject to a legally enforceable netting agreement for which we are not currently netting.

Offsetting of derivative assets and financial assets at June 30, 2020
	Gross assets recognized		Gross amounts offset in the balance sheet			Net assets recognized in the balance sheet		Gross amounts not offset in the balance sheet
(in millions)					(a)			Financial instruments		Cash collateral received		Net amount
Derivatives subject to netting arrangements:
Interest rate contracts	$	3,549	$	2,436		$	1,113	$	384	$	—	$	729
Foreign exchange contracts	4,026		3,204			822		7		—		815
Equity and other contracts	9		—			9		1		—		8
Total derivatives subject to netting arrangements	7,584		5,640			1,944		392		—		1,552
Total derivatives not subject to netting arrangements	2,389		—			2,389		—		—		2,389
Total derivatives	9,973		5,640			4,333		392		—		3,941
Reverse repurchase agreements	72,781		48,615		(b)	24,166		24,140		—		26
Securities borrowing	12,472		—			12,472		11,843		—		629
Total	$	95,226	$	54,255		$	40,971	$	36,375	$	—	$	4,596

(a) Includes the effect of netting agreements and net cash collateral received. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions.

(b) Offsetting of reverse repurchase agreements relates to our involvement in the Fixed Income Clearing Corporation (“FICC”), where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.

Offsetting of derivative assets and financial assets at Dec. 31, 2019
	Gross assets recognized		Gross amounts offset in the balance sheet			Net assets recognized in the balance sheet		Gross amounts not offset in the balance sheet
(in millions)					(a)			Financial instruments		Cash collateral received		Net amount
Derivatives subject to netting arrangements:
Interest rate contracts	$	2,394	$	1,792		$	602	$	207	$	—	$	395
Foreign exchange contracts	4,861		4,021			840		44		—		796
Equity and other contracts	9		6			3		—		—		3
Total derivatives subject to netting arrangements	7,264		5,819			1,445		251		—		1,194
Total derivatives not subject to netting arrangements	1,797		—			1,797		—		—		1,797
Total derivatives	9,061		5,819			3,242		251		—		2,991
Reverse repurchase agreements	112,355		93,794		(b)	18,561		18,554		—		7
Securities borrowing	11,621		—			11,621		11,278		—		343
Total	$	133,037	$	99,613		$	33,424	$	30,083	$	—	$	3,341

(a) Includes the effect of netting agreements and net cash collateral received. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions.

(b) Offsetting of reverse repurchase agreements relates to our involvement in the FICC, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.

Offsetting of derivative liabilities and financial liabilities at June 30, 2020						Net liabilities recognized in the balance sheet
	Gross liabilities recognized		Gross amounts offset in the balance sheet					Gross amounts not offset in the balance sheet
(in millions)					(a)			Financial instruments		Cash collateral pledged		Net amount
Derivatives subject to netting arrangements:
Interest rate contracts	$	5,563	$	2,680		$	2,883	$	2,849	$	—	$	34
Foreign exchange contracts	3,690		3,134			556		150		—		406
Equity and other contracts	22		3			19		—		—		19
Total derivatives subject to netting arrangements	9,275		5,817			3,458		2,999		—		459
Total derivatives not subject to netting arrangements	417		—			417		—		—		417
Total derivatives	9,692		5,817			3,875		2,999		—		876
Repurchase agreements	59,794		48,615		(b)	11,179		11,175		—		4
Securities lending	982		—			982		962		—		20
Total	$	70,468	$	54,432		$	16,036	$	15,136	$	—	$	900

(a) Includes the effect of netting agreements and net cash collateral paid. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions.

(b) Offsetting of repurchase agreements relates to our involvement in the FICC, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.

Offsetting of derivative liabilities and financial liabilities at Dec. 31, 2019						Net liabilities recognized in the balance sheet
	Gross liabilities recognized		Gross amounts offset in the balance sheet					Gross amounts not offset in the balance sheet
(in millions)					(a)			Financial instruments		Cash collateral pledged		Net amount
Derivatives subject to netting arrangements:
Interest rate contracts	$	3,550	$	1,986		$	1,564	$	1,539	$	—	$	25
Foreign exchange contracts	4,873		3,428			1,445		74		—		1,371
Equity and other contracts	5		1			4		2		—		2
Total derivatives subject to netting arrangements	8,428		5,415			3,013		1,615		—		1,398
Total derivatives not subject to netting arrangements	778		—			778		—		—		778
Total derivatives	9,206		5,415			3,791		1,615		—		2,176
Repurchase agreements	104,451		93,794		(b)	10,657		10,657		—		—
Securities lending	718		—			718		694		—		24
Total	$	114,375	$	99,209		$	15,166	$	12,966	$	—	$	2,200

(a) Includes the effect of netting agreements and net cash collateral paid. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions.

(b)

Offsetting of repurchase agreements relates to our involvement in the FICC, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.

Secured borrowings

The following table presents the contract value of repurchase agreements and securities lending transactions accounted for as secured borrowings by the type of collateral provided to counterparties.

Repurchase agreements and securities lending transactions accounted for as secured borrowings
	June 30, 2020								Dec. 31, 2019
	Remaining contractual maturity						Total		Remaining contractual maturity						Total
(in millions)	Overnight and continuous		Up to 30 days		30 days or more				Overnight and continuous		Up to 30 days		30 days or more
Repurchase agreements:
U.S. Treasury	$	52,950	$	300	$	109	$	53,359	$	94,788	$	10	$	—	$	94,798
U.S. government agencies	642		—		—		642		594		16		—		610
Agency RMBS	1,384		—		149		1,533		4,234		774		—		5,008
Corporate bonds	195		23		1,272		1,490		266		236		1,617		2,119
Other debt securities	93		79		1,749		1,921		40		188		1,079		1,307
Equity securities	—		98		751		849		31		99		479		609
Total	$	55,264	$	500	$	4,030	$	59,794	$	99,953	$	1,323	$	3,175	$	104,451
Securities lending:
U.S. government agencies	$	21	$	—	$	—	$	21	$	19	$	—	$	—	$	19
Other debt securities	191		—		—		191		201		—		—		201
Equity securities	770		—		—		770		498		—		—		498
Total	$	982	$	—	$	—	$	982	$	718	$	—	$	—	$	718
Total secured borrowings	$	56,246	$	500	$	4,030	$	60,776	$	100,671	$	1,323	$	3,175	$	105,169

BNY Mellon’s repurchase agreements and securities lending transactions primarily encounter risk associated with liquidity. We are required to pledge collateral based on predetermined terms within the agreements. If we were to experience a decline in the fair value of the collateral pledged for these transactions, we could be required to provide additional collateral to the counterparty, therefore decreasing the amount of assets available for other liquidity needs that may arise. BNY Mellon also offers tri-party collateral agency services in the tri-party repo market where we are exposed to credit risk. In order to mitigate this risk, we require dealers to fully secure intraday credit.

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Commitments and contingent liabilities

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and contingent liabilities

Commitments and contingent liabilities

Off-balance sheet arrangements

In the normal course of business, various commitments and contingent liabilities are outstanding that are not reflected in the accompanying consolidated balance sheets.

Our significant trading and off-balance sheet risks are securities, foreign currency and interest rate risk management products, commercial lending commitments, letters of credit and securities lending

indemnifications. We assume these risks to reduce interest rate and foreign currency risks, to provide customers with the ability to meet credit and liquidity needs and to hedge foreign currency and interest rate risks. These items involve, to varying degrees, credit, foreign currency and interest rate risks not recognized on the balance sheet. Our off-balance sheet risks are managed and monitored in manners similar to those used for on-balance sheet risks.

The following table presents a summary of our off-balance sheet credit risks.

Off-balance sheet credit risks	June 30, 2020		Dec. 31, 2019
(in millions)
Lending commitments	$	49,147	$	49,119
Standby letters of credit (“SBLC”) (a)	2,291		2,298
Commercial letters of credit	59		74
Securities lending indemnifications (b)(c)	417,924		408,378

(a) Net of participations totaling $145 million at June 30, 2020 and $146 million at Dec. 31, 2019.

(b) Excludes the indemnification for securities for which BNY Mellon acts as an agent on behalf of CIBC Mellon clients, which totaled $58 billion at June 30, 2020 and $57 billion at Dec. 31, 2019.

(c) Includes cash collateral, invested in indemnified repurchase agreements, held by us as securities lending agent of $40 billion at June 30, 2020 and $37 billion at Dec. 31, 2019.

The total potential loss on undrawn lending commitments, standby and commercial letters of credit, and securities lending indemnifications is equal to the total notional amount if drawn upon, which does not consider the value of any collateral.

Since many of the lending commitments are expected to expire without being drawn upon, the total amount does not necessarily represent future cash requirements. A summary of lending commitment maturities is as follows: $32.6 billion in less than one year, $16.2 billion in one to five years and $319 million over five years.

SBLCs principally support obligations of corporate clients and were collateralized with cash and securities of $185 million at June 30, 2020 and $184 million at Dec. 31, 2019. At June 30, 2020, $1.7 billion of the SBLCs will expire within one year, $545 million in one to five years and $7 million over five years.

We must recognize, at the inception of an SBLC and foreign and other guarantees, a liability for the fair value of the obligation undertaken in issuing the guarantee. The fair value of the liability, which was recorded with a corresponding asset in other assets, was estimated as the present value of contractual customer fees. The estimated liability for losses related to SBLCs and foreign and other guarantees, if any, is included in the allowance for lending-related commitments.

Payment/performance risk of SBLCs is monitored using both historical performance and internal ratings criteria. BNY Mellon’s historical experience is that SBLCs typically expire without being funded. SBLCs below investment grade are monitored closely for payment/performance risk. The table below shows SBLCs by investment grade:

Standby letters of credit	June 30, 2020		Dec. 31, 2019
Investment grade	89	%	90	%
Non-investment grade	11	%	10	%

A commercial letter of credit is normally a short-term instrument used to finance a commercial contract for the shipment of goods from a seller to a buyer. Although the commercial letter of credit is contingent upon the satisfaction of specified conditions, it represents a credit exposure if the buyer defaults on

the underlying transaction. As a result, the total contractual amounts do not necessarily represent future cash requirements. Commercial letters of credit totaled $59 million at June 30, 2020 and $74 million at Dec. 31, 2019.

We expect many of the lending commitments and letters of credit to expire without the need to advance any cash. The revenue associated with guarantees frequently depends on the credit rating of the obligor and the structure of the transaction, including collateral, if any. The allowance for lending-related commitments was $152 million at June 30, 2020 and $94 million at Dec. 31, 2019.

A securities lending transaction is a fully collateralized transaction in which the owner of a security agrees to lend the security (typically through an agent, in our case, The Bank of New York Mellon) to a borrower, usually a broker-dealer or bank, on an open, overnight or term basis, under the terms of a prearranged contract.

We typically lend securities with indemnification against borrower default. We generally require the borrower to provide collateral with a minimum value of 102% of the fair value of the securities borrowed, which is monitored on a daily basis, thus reducing credit risk. Market risk can also arise in securities lending transactions. These risks are controlled through policies limiting the level of risk that can be undertaken. Securities lending transactions are generally entered into only with highly rated counterparties. Securities lending indemnifications were secured by collateral of $438 billion at June 30, 2020 and $428 billion at Dec. 31, 2019.

CIBC Mellon, a joint venture between BNY Mellon and the Canadian Imperial Bank of Commerce (“CIBC”), engages in securities lending activities.  CIBC Mellon, BNY Mellon and CIBC jointly and severally indemnify securities lenders against specific types of borrower default. At June 30, 2020 and Dec. 31, 2019, $58 billion and $57 billion, respectively, of borrowings at CIBC Mellon, for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, were secured by collateral of $62 billion and $61 billion, respectively. If, upon a default, a borrower’s collateral was not sufficient to cover its related obligations, certain losses related to the indemnification could be covered by the indemnitors.

Unsettled repurchase and reverse repurchase agreements

In the normal course of business, we enter into repurchase agreements and reverse repurchase agreements that settle at a future date. In repurchase agreements, BNY Mellon receives cash from and provides securities as collateral to a counterparty at settlement. In reverse repurchase agreements, BNY Mellon advances cash to and receives securities as collateral from the counterparty at settlement. These transactions are recorded on the consolidated balance sheet on the settlement date. At June 30, 2020, we had no unsettled repurchase agreements and no unsettled reverse repurchase agreements.

Industry concentrations

We have significant industry concentrations related to credit exposure at June 30, 2020. The tables below present our credit exposure in the financial institutions and commercial portfolios.

Financial institutions portfolio exposure (in billions)	June 30, 2020
	Loans		Unfunded commitments		Total exposure
Securities industry	$	1.6	$	24.5	$	26.1
Banks	7.0		1.1		8.1
Asset managers	1.3		6.3		7.6
Insurance	0.1		2.7		2.8
Government	0.1		0.2		0.3
Other	0.7		0.7		1.4
Total	$	10.8	$	35.5	$	46.3

 

Commercial portfolio exposure (in billions)	June 30, 2020
	Loans		Unfunded commitments		Total exposure
Manufacturing	$	1.1	$	3.5	$	4.6
Services and other	1.1		3.3		4.4
Energy and utilities	0.1		4.1		4.2
Media and telecom	0.1		0.9		1.0
Total	$	2.4	$	11.8	$	14.2

Major concentrations in securities lending are primarily to broker-dealers and are generally collateralized with cash and/or securities.

Sponsored Member Repo Program

BNY Mellon is a sponsoring member in the FICC sponsored member program, where we submit eligible overnight repurchase and reverse repurchase transactions in U.S. Treasury securities (“Sponsored

Member Transactions”) between BNY Mellon and our sponsored member clients for novation and clearing through FICC pursuant to the FICC Government Securities Division rulebook (the “FICC Rules”). We also guarantee to FICC the prompt and full payment and performance of our sponsored member clients’ respective obligations under the FICC Rules in connection with such clients’ Sponsored Member Transactions. We minimize our credit exposure under this guaranty by obtaining a security interest in our sponsored member clients’ collateral and rights under Sponsored Member Transactions. See “Offsetting assets and liabilities” in Note 17 for additional information on our repurchase and reverse repurchase agreements.

Indemnification arrangements

We have provided standard representations for underwriting agreements, acquisition and divestiture agreements, sales of loans and commitments, and other similar types of arrangements and customary indemnification for claims and legal proceedings related to providing financial services that are not otherwise included above. Insurance has been purchased to mitigate certain of these risks. Generally, there are no stated or notional amounts included in these indemnifications and the contingencies triggering the obligation for indemnification are not expected to occur. Furthermore, often counterparties to these transactions provide us with comparable indemnifications. We are unable to develop an estimate of the maximum payout under these indemnifications for several reasons. In addition to the lack of a stated or notional amount in a majority of such indemnifications, we are unable to predict the nature of events that would trigger indemnification or the level of indemnification for a certain event. We believe, however, that the possibility that we will have to make any material payments for these indemnifications is remote. At June 30, 2020 and Dec. 31, 2019, we have not recorded any material liabilities under these arrangements.

Clearing and settlement exchanges

We are a noncontrolling equity investor in, and/or member of, several industry clearing or settlement exchanges through which foreign exchange, securities, derivatives or other transactions settle. Certain of these industry clearing and settlement exchanges require their members to guarantee their

obligations and liabilities and/or to provide liquidity support in the event other members do not honor their obligations. We believe the likelihood that a clearing or settlement exchange (of which we are a member) would become insolvent is remote. Additionally, certain settlement exchanges have implemented loss allocation policies that enable the exchange to allocate settlement losses to the members of the exchange. It is not possible to quantify such mark-to-market loss until the loss occurs. Any ancillary costs that occur as a result of any mark-to-market loss cannot be quantified. In addition, we also sponsor clients as members on clearing and settlement exchanges and guarantee their obligations. At June 30, 2020 and Dec. 31, 2019, we did not record any material liabilities under these arrangements.

Legal proceedings

In the ordinary course of business, The Bank of New York Mellon Corporation and its subsidiaries are routinely named as defendants in or made parties to pending and potential legal actions. We also are subject to governmental and regulatory examinations, information-gathering requests, investigations and proceedings (both formal and informal). Claims for significant monetary damages are often asserted in many of these legal actions, while claims for disgorgement, restitution, penalties and/or other remedial actions or sanctions may be sought in governmental and regulatory matters. It is inherently difficult to predict the eventual outcomes of such matters given their complexity and the particular facts and circumstances at issue in each of these matters. However, on the basis of our current knowledge and understanding, we do not believe that judgments, settlements or orders, if any, arising from these matters (either individually or in the aggregate, after giving effect to applicable reserves and insurance coverage) will have a material adverse effect on the consolidated financial position or liquidity of BNY Mellon, although they could have a material effect on our results of operations in a given period.

In view of the inherent unpredictability of outcomes in litigation and regulatory matters, particularly where (i) the damages sought are substantial or indeterminate, (ii) the proceedings are in the early stages, or (iii) the matters involve novel legal theories or a large number of parties, as a matter of course there is considerable uncertainty surrounding the timing or ultimate resolution of litigation and regulatory matters, including a possible eventual loss,

fine, penalty or business impact, if any, associated with each such matter. In accordance with applicable accounting guidance, we establish accruals for litigation and regulatory matters when those matters proceed to a stage where they present loss contingencies that are both probable and reasonably estimable. In such cases, there may be a possible exposure to loss in excess of any amounts accrued. We regularly monitor such matters for developments that could affect the amount of the accrual, and will adjust the accrual amount as appropriate. If the loss contingency in question is not both probable and reasonably estimable, we do not establish an accrual and the matter continues to be monitored for any developments that would make the loss contingency both probable and reasonably estimable. We believe that our accruals for legal proceedings are appropriate and, in the aggregate, are not material to the consolidated financial position of BNY Mellon, although future accruals could have a material effect on the results of operations in a given period. In addition, if we have the potential to recover a portion of an estimated loss from a third party, we record a receivable up to the amount of the accrual that is probable of recovery.

For certain of those matters described here for which a loss contingency may, in the future, be reasonably possible (whether in excess of a related accrued liability or where there is no accrued liability), BNY Mellon is currently unable to estimate a range of reasonably possible loss. For those matters described here where BNY Mellon is able to estimate a reasonably possible loss, the aggregate range of such reasonably possible loss is up to $730 million in excess of the accrued liability (if any) related to those matters. For matters where a reasonably possible loss is denominated in a foreign currency, our estimate is adjusted quarterly based on prevailing exchange rates. We do not consider potential recoveries when estimating reasonably possible losses.

The following describes certain judicial, regulatory and arbitration proceedings involving BNY Mellon:

Mortgage-Securitization Trusts Proceedings

The Bank of New York Mellon has been named as a defendant in a number of legal actions brought by MBS investors alleging that the trustee has expansive duties under the governing agreements, including the duty to investigate and pursue breach of representation and warranty claims against other parties to the MBS transactions. Four actions

commenced in August 2014, December 2014, December 2015 and February 2017 are pending in New York federal court; and one action commenced in May 2016 is pending in New York state court.

Matters Related to R. Allen Stanford

In late December 2005, Pershing LLC (“Pershing”) became a clearing firm for Stanford Group Co. (“SGC”), a registered broker-dealer that was part of a group of entities ultimately controlled by R. Allen Stanford (“Stanford”). Stanford International Bank (“SIB”), also controlled by Stanford, issued certificates of deposit (“CDs”). Some investors allegedly wired funds from their SGC accounts to purchase CDs. In 2009, the Securities and Exchange Commission (“SEC”) charged Stanford with operating a Ponzi scheme in connection with the sale of CDs, and SGC was placed into receivership. Alleged purchasers of CDs have filed two putative class action proceedings against Pershing: one in November 2009 in Texas federal court, and one in May 2016 in New Jersey federal court. Thirteen lawsuits have been filed against Pershing in Louisiana, Florida and New Jersey federal courts in January 2010, January and February 2015, October 2015 and May 2016. The purchasers allege that Pershing, as SGC’s clearing firm, assisted Stanford in a fraudulent scheme and assert contractual, statutory and common law claims. In March 2019, a group of investors filed a putative class action against The Bank of New York Mellon in New Jersey federal court, making the same allegations as in the prior actions brought against Pershing. All of the cases that have been brought in federal court against Pershing and the case brought against The Bank of New York Mellon have been consolidated in Texas federal court for discovery purposes. On Dec. 19, 2019, the Court of Appeals for the Fifth Circuit affirmed the dismissal of six individual federal lawsuits brought under Florida law, which will also apply to four other similarly situated cases. On March 18, 2020, the plaintiffs in those lawsuits filed a Petition for Writ of Certiorari seeking permission to appeal to the United States Supreme Court. Financial Industry Regulatory Authority, Inc. (“FINRA”) arbitration proceedings also have been initiated by alleged purchasers asserting similar claims.

Brazilian Postalis Litigation

BNY Mellon Servicos Financeiros DTVM S.A. (“DTVM”), a subsidiary that provides asset services in Brazil, acts as administrator for certain investment funds in which a public pension fund for postal

workers called Postalis-Instituto de Seguridade Social dos Correios e Telégrafos (“Postalis”) invested. On Aug. 22, 2014, Postalis sued DTVM in Rio de Janeiro, Brazil for losses related to a Postalis fund for which DTVM is administrator. Postalis alleges that DTVM failed to properly perform duties, including to conduct due diligence of and exert control over the manager. On March 12, 2015, Postalis filed a lawsuit in Rio de Janeiro against DTVM and BNY Mellon Administração de Ativos Ltda. (“Ativos”) alleging failure to properly perform duties relating to another fund of which DTVM is administrator and Ativos is manager. On Dec. 14, 2015, Associacão dos Profissionais dos Correios (“ADCAP”), a Brazilian postal workers association, filed a lawsuit in São Paulo against DTVM and other defendants alleging that DTVM improperly contributed to Postalis investment losses. On March 20, 2017, the lawsuit was dismissed without prejudice, and ADCAP has appealed that decision. On Dec. 17, 2015, Postalis filed three lawsuits in Rio de Janeiro against DTVM and Ativos alleging failure to properly perform duties with respect to investments in several other funds. On Feb. 4, 2016, Postalis filed a lawsuit in Brasilia against DTVM, Ativos and BNY Mellon Alocação de Patrimônio Ltda. (“Alocação de Patrimônio”), an investment management subsidiary, alleging failure to properly perform duties and liability for losses with respect to investments in various funds of which the defendants were administrator and/or manager. On Jan. 16, 2018, the Brazilian Federal Prosecution Service (“MPF”) filed a civil lawsuit in São Paulo against DTVM alleging liability for Postalis losses based on alleged failures to properly perform certain duties as administrator to certain funds in which Postalis invested or as controller of Postalis’s own investment portfolio. On April 18, 2018, the court dismissed the lawsuit without prejudice, and the MPF has appealed that decision. In addition, the Tribunal de Contas da Uniao, an administrative tribunal, has initiated two proceedings with the purpose of determining liability for losses to two investment funds administered by DTVM in which Postalis was the exclusive investor. On Oct. 4, 2019, Postalis and another pension fund filed a request for arbitration in São Paulo against DTVM and Ativos alleging liability for losses to an investment fund for which DTVM was administrator and Ativos was manager. On Oct. 25, 2019, Postalis filed a lawsuit in Rio de Janeiro against DTVM and Alocação de Patrimônio, alleging liability for losses in another fund for which DTVM was administrator and Alocação de Patrimônio and Ativos were managers.

Brazilian Silverado Litigation

DTVM acts as administrator for the Fundo de Investimento em Direitos Creditórios Multisetorial Silverado Maximum (“Silverado Maximum Fund”), which invests in commercial credit receivables. On June 2, 2016, the Silverado Maximum Fund sued DTVM in its capacity as administrator, along with Deutsche Bank S.A. - Banco Alemão in its capacity as custodian and Silverado Gestão e Investimentos Ltda. in its capacity as investment manager. The Fund alleges that each of the defendants failed to fulfill its respective duty, and caused losses to the Fund for which the defendants are jointly and severally liable.

German Tax Matters

German authorities are investigating past “cum/ex” trading, which involved the purchase of equity securities on or shortly before the dividend date, but settled after that date, potentially resulting in an unwarranted refund of withholding tax. German authorities have taken the view that past cum/ex trading may have resulted in tax avoidance or evasion. European subsidiaries of BNY Mellon have been informed by German authorities about investigations into potential cum/ex trading by certain third-party investment funds, where one of the subsidiaries had acquired entities that served as depositary and/or fund manager for those third-party investment funds. We have received information requests from the authorities relating to pre-acquisition activity and are cooperating fully with those requests. We have not received any tax demand concerning cum/ex trading. In August 2019, the District Court of Bonn ordered that one of these subsidiaries be joined as a secondary party in connection with the prosecution of unrelated individual defendants. Trial commenced in September 2019. In March 2020, the court stated that it would refrain from taking action against the subsidiary in order to expedite the conclusion of the trial. The court convicted the unrelated individual defendants, and determined that the cum/ex trading activities of the relevant third-party investment funds were unlawful. In connection with the acquisition of the subject entities, we obtained an indemnity for liabilities from the sellers that we intend to pursue as necessary.

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Lines of business

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Lines of business

Lines of business

We have an internal information system that produces performance data along product and service lines for our two principal businesses and the Other segment. The primary products and services and types of revenue for our principal businesses and a description of the Other segment are presented in Note 24 of the Notes to Consolidated Financial Statements in our 2019 Annual Report.

Business accounting principles

Our business data has been determined on an internal management basis of accounting, rather than the generally accepted accounting principles used for consolidated financial reporting. These measurement principles are designed so that reported results of the businesses will track their economic performance.

Business results are subject to reclassification when organizational changes are made. There were no significant organizational changes in the second quarter of 2020. The results are also subject to refinements in revenue and expense allocation methodologies, which are typically reflected on a prospective basis.

In the first quarter of 2020, we reclassified the results of certain services provided between the segments from noninterest expense to fee and other revenue. This activity is offset in the Other segment and relates to services that are also provided to third parties and provides consistency with the reporting of the revenues. This adjustment had no impact on income before taxes of the businesses. Also in the first quarter of 2020, we reclassified the results related to certain lending activities from the Wealth Management business to the Pershing business. These loans were originated by the Wealth Management business as a service to Pershing clients. This resulted in an increase in total revenue, noninterest expense and income before taxes in the Pershing business and corresponding decrease in the Wealth Management business. Prior periods were restated in the first quarter of 2020 for both reclassifications.

The accounting policies of the businesses are the same as those described in Note 1 of the Notes to Consolidated Financial Statements in our 2019 Annual Report.

The results of our businesses are presented and analyzed on an internal management reporting basis.

• Revenue amounts reflect fee and other revenue generated by each business and include revenue for services provided between the segments that are also provided to third parties. Fee and other revenue transferred between businesses under revenue transfer agreements is included within other revenue in each business.

• Revenues and expenses associated with specific client bases are included in those businesses. For example, foreign exchange activity associated with clients using custody products is included in Investment Services.

• Net interest revenue is allocated to businesses based on the yields on the assets and liabilities generated by each business. We employ a funds transfer pricing system that matches funds with the specific assets and liabilities of each business based on their interest sensitivity and maturity characteristics.

• The provision for credit losses associated with the respective credit portfolios is reflected in each business segment.

• Incentives expense related to restricted stock is allocated to the businesses.

• Support and other indirect expenses, including services provided between segments that are not provided to third parties or not subject to a revenue transfer agreement, are allocated to businesses based on internally developed methodologies and reflected in noninterest expense.

• Recurring FDIC expense is allocated to the businesses based on average deposits generated within each business.

• Litigation expense is generally recorded in the business in which the charge occurs.

• Management of the securities portfolio is a shared service contained in the Other segment. As a result, gains and losses associated with the valuation of the securities portfolio are generally included in the Other segment.

• Client deposits serve as the primary funding source for our securities portfolio. We typically allocate all interest revenue to the businesses generating the deposits. Accordingly, accretion related to the portion of the securities portfolio restructured in 2009 has been included in the results of the businesses.

• Balance sheet assets and liabilities and their related income or expense are specifically assigned to each business. Businesses with a net liability position have been allocated assets.

• Goodwill and intangible assets are reflected within individual businesses.

The following consolidating schedules present the contribution of our businesses to our overall profitability.

For the quarter ended June 30, 2020	Investment Services			Investment and Wealth Management				Other			Consolidated
(dollars in millions)
Total fee and other revenue	$	2,339		$	838		(a)	$	38		$	3,215		(a)
Net interest revenue (expense)	768			48				(36		)	780
Total revenue	3,107			886			(a)	2			3,995			(a)
Provision for credit losses	145			7				(9		)	143
Noninterest expense	1,989			658				39			2,686
Income (loss) before income taxes	$	973		$	221		(a)	$	(28	)	$	1,166		(a)
Pre-tax operating margin (b)	31		%	25		%		N/M			29		%
Average assets	$	335,288		$	30,327			$	49,744		$	415,359

(a) Total fee and other revenue includes net income from consolidated investment management funds of $39 million, representing $54 million of income and noncontrolling interests of $15 million. Total revenue and income before income taxes are net of noncontrolling interests of $15 million.

(b) Income before income taxes divided by total revenue.

N/M - Not meaningful.

For the quarter ended March 31, 2020	Investment Services			Investment and Wealth Management				Other			Consolidated
(dollars in millions)
Total fee and other revenue	$	2,436		$	846		(a)	$	30		$	3,312		(a)
Net interest revenue (expense)	806			52				(44		)	814
Total revenue (loss)	3,242			898			(a)	(14		)	4,126			(a)
Provision for credit losses	149			9				11			169
Noninterest expense	1,987			695				30			2,712
Income (loss) before income taxes	$	1,106		$	194		(a)	$	(55	)	$	1,245		(a)
Pre-tax operating margin (b)	34		%	22		%		N/M			30		%
Average assets	$	304,089		$	30,543			$	50,646		$	385,278

(a) Total fee and other revenue includes net loss from consolidated investment management funds of $20 million, representing $38 million of losses and a loss attributable to noncontrolling interests of $18 million. Total revenue and income before income taxes are net of a loss attributable to noncontrolling interests of $18 million.

(b) Income before income taxes divided by total revenue.

N/M - Not meaningful.

For the quarter ended June 30, 2019	Investment Services			Investment and Wealth Management				Other			Consolidated
(dollars in millions)
Total fee and other revenue	$	2,233		$	854		(a)	$	31		$	3,118		(a)
Net interest revenue (expense)	783			59				(40		)	802
Total revenue (loss)	3,016			913			(a)	(9		)	3,920			(a)
Provision for credit losses	(4		)	(2		)		(2		)	(8		)
Noninterest expense	1,963			655				29			2,647
Income (loss) before income taxes	$	1,057		$	260		(a)	$	(36	)	$	1,281		(a)
Pre-tax operating margin (b)	35		%	29		%		N/M			33		%
Average assets	$	264,781		$	29,793			$	47,810		$	342,384

(a) Total fee and other revenue includes net income from consolidated investment management funds of $6 million, representing $10 million of income and noncontrolling interests of $4 million. Total revenue and income before income taxes are net of noncontrolling interests of $4 million.

(b) Income before income taxes divided by total revenue.

N/M - Not meaningful.

For the six months ended June 30, 2020	Investment Services			Investment and Wealth Management				Other			Consolidated
(dollars in millions)
Total fee and other revenue	$	4,775		$	1,684		(a)	$	68		$	6,527		(a)
Net interest revenue (expense)	1,574			100				(80		)	1,594
Total revenue (loss)	6,349			1,784			(a)	(12		)	8,121			(a)
Provision for credit losses	294			16				2			312
Noninterest expense	3,976			1,353				69			5,398
Income (loss) before income taxes	$	2,079		$	415		(a)	$	(83	)	$	2,411		(a)
Pre-tax operating margin (b)	33		%	23		%		N/M			30		%
Average assets	$	319,689		$	30,435			$	50,194		$	400,318

(a) Total fee and other revenue includes net income from consolidated investment management funds of $19 million, representing $16 million of income and a loss attributable to noncontrolling interests of $3 million. Total revenue and income before income taxes are net of a loss attributable to noncontrolling interests of $3 million.

(b) Income before income taxes divided by total revenue.

N/M - Not meaningful.

For the six months ended June 30, 2019	Investment Services			Investment and Wealth Management				Other			Consolidated
(dollars in millions)
Total fee and other revenue	$	4,394		$	1,723		(a)	$	49		$	6,166		(a)
Net interest revenue (expense)	1,587			126				(70		)	1,643
Total revenue (loss)	5,981			1,849			(a)	(21		)	7,809			(a)
Provision for credit losses	4			(1		)		(4		)	(1		)
Noninterest expense	3,944			1,324				78			5,346
Income (loss) before income taxes	$	2,033		$	526		(a)	$	(95	)	$	2,464		(a)
Pre-tax operating margin (b)	34		%	28		%		N/M			32		%
Average assets	$	260,432		$	30,819			$	48,041		$	339,292

(a) Total fee and other revenue includes net income from consolidated investment management funds of $22 million, representing $36 million of income and noncontrolling interests of $14 million. Total revenue and income before income taxes are net of noncontrolling interests of $14 million.

(b) Income before income taxes divided by total revenue.

N/M - Not meaningful.

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Supplemental information to the Consolidated Statement of Cash Flows

6 Months Ended

Jun. 30, 2020

Supplemental Cash Flow Information [Abstract]

Supplemental information to the Consolidated Statement of Cash Flows

Supplemental information to the Consolidated Statement of Cash Flows

Non-cash investing and financing transactions that, appropriately, are not reflected in the consolidated statement of cash flows are listed below.

Non-cash investing and financing transactions	Six months ended June 30,
(in millions)	2020		2019
Change in assets of consolidated investment management funds	$	215	$	76
Change in liabilities of consolidated investment management funds	3		4
Change in nonredeemable noncontrolling interests of consolidated investment management funds	10		65
Securities purchased not settled	1,730		1,113
Securities matured not settled	—		10
Premises and equipment/capitalized software funded by finance lease obligations	—		14
Premises and equipment/operating lease obligations	66		1,272		(a)
Investment redemptions not settled	—		—

 

(a)

Includes $1,244 million related to the adoption of ASU 2016-02, Leases, and $28 million related to new or modified leases.

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Basis of presentation (Policies)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Basis of presentation

Basis of presentation

The accounting and financial reporting policies of BNY Mellon, a global financial services company, conform to U.S. generally accepted accounting principles (“GAAP”) and prevailing industry practices. For information on our significant accounting and reporting policies, see Note 1 in our 2019 Annual Report.

The accompanying consolidated financial statements are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of financial position, results of operations and cash flows for the periods presented have been made. These financial statements should be read in conjunction with our 2019 Annual Report.

Reclassifications

Certain immaterial reclassifications have been made to prior periods to place them on a basis comparable with the current period presentation.

Use of estimates

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates based upon assumptions about future economic and market conditions which affect reported amounts and related disclosures in our financial statements. Although our current estimates contemplate current conditions and how we expect them to change in the future, it is reasonably possible that actual conditions could be worse than anticipated in those estimates, which could materially affect our results of operations and financial condition.

Fair value measurement

Fair value measurement

Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. A three-level hierarchy for fair value measurements is utilized based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. BNY Mellon’s own creditworthiness is considered when valuing liabilities. See Note 20 of the Notes to Consolidated Financial Statements in our 2019 Annual Report for

information on how we determine fair value and the fair value hierarchy.

The following tables present the financial instruments carried at fair value at June 30, 2020 and Dec. 31, 2019, by caption on the consolidated balance sheet and by the three-level valuation hierarchy. We have included credit ratings information in certain of the tables because the information indicates the degree of credit risk to which we are exposed, and significant changes in ratings classifications could result in increased risk for us.

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Accounting changes and new accounting guidance (Policies)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Loans

Loans

Loans are reported at amortized cost, net of any unearned income and deferred fees and costs. Certain loan origination and upfront commitment fees, as well as certain direct loan origination and commitment costs, are deferred and amortized as a yield adjustment over the lives of the related loans. Loans held for sale are carried at the lower of cost or fair value.

Troubled debt restructuring/loan modifications

Troubled debt restructuring/loan modifications

A modified loan is considered a troubled debt restructuring (“TDR”) if the debtor is experiencing financial difficulties and the creditor grants a concession to the debtor that would not otherwise be considered. A TDR may include a transfer of real estate or other assets from the debtor to the creditor, or a modification of the term of the loan. Credit losses related to TDRs are accounted for under an individual evaluation methodology (see “Allowance for credit losses” below). Credit losses for anticipated TDRs are accounted for similarly to TDRs and are identified when there is a reasonable expectation that a TDR will be executed with the borrower and when we expect the modification to affect the timing or amount of payments and/or the payment term.

Due to the coronavirus pandemic, there have been two forms of relief provided for classifying loans as TDRs: The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and the Interagency Guidance (as defined below). Financial institutions

may account for eligible loan modifications either under the CARES Act or the Interagency Guidance. The Company has elected to apply both the CARES Act and the Interagency Guidance, as applicable, in providing borrowers with loan modification relief in response to the coronavirus pandemic.

The CARES Act, which became law on March 27, 2020, provides that financial institutions may, subject to certain conditions, elect to temporarily suspend the U.S. GAAP requirements with respect to loan modifications related to the coronavirus pandemic that were current as of Dec. 31, 2019 and that would otherwise be identified and treated as TDRs.

This TDR relief is applicable to modifications that were made from March 1, 2020 until the earlier of Dec. 31, 2020 or 60 days from the date the national emergency related to the coronavirus pandemic officially ends.

Various banking regulators issued guidance in the April 7, 2020 “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (revised)” (“Interagency Guidance”) on loan modification treatment pursuant to which financial institutions can apply the U.S. GAAP requirements for loan modifications. In accordance with this guidance, a loan modification is not considered a TDR if the modification is related to the coronavirus pandemic, the borrower had been current when the modification program was implemented, and the modification includes payment deferrals for not more than 6 months.

Nonperforming assets

Nonperforming assets

Commercial loans are placed on nonaccrual status when principal or interest is past due 90 days or more, or when there is reasonable doubt that interest or principal will be collected.

When a first or second lien residential mortgage loan reaches 90 days delinquent, it is subject to an individual evaluation of credit loss and placed on nonaccrual status.

When a loan is placed on nonaccrual status, previously accrued and uncollected interest is reversed against current period interest revenue. Interest receipts on nonaccrual loans are recognized as interest revenue or are applied to principal when

we believe the ultimate collectability of principal is in doubt. Nonaccrual loans generally are restored to an accrual basis when principal and interest become current and remain current for a specified period.

“Allowance for credit losses” below provides additional information regarding the individual evaluation of credit losses for nonperforming loans.

Allowance for credit losses

Allowance for credit losses

The accounting policy for estimating credit losses related to financial assets measured at amortized cost, including loans and lending-related commitments changed beginning in the first quarter of 2020 as a result of the adoption of ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments. This ASU also included targeted amendments with respect to credit losses for available-for-sale debt securities. The accounting policy for determining the allowances has been identified as a “critical accounting estimate” as it requires us to make numerous complex and subjective estimates and assumptions relating to amounts which are judgmental and inherently uncertain.

Credit quality is monitored by management and is reflected within the allowance for credit losses. The allowance represents management’s estimate of expected credit losses over the expected contractual life of the financial instruments as of the balance sheet date. The allowance methodology is designed to provide procedural discipline in assessing the appropriateness of the allowance.

A quantitative methodology and qualitative framework is used to estimate the allowance for credit losses. The qualitative framework is described in further detail within “Allowance for credit losses - Other” below. The quantitative component of our estimate 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 allowance may be determined using various methods, including discounted cash flow methods, loss-rate methods, probability of default methods or other methods that we determine to be appropriate. We estimate our expected credit losses using the

probability of default method for the majority of our financial assets. We measure expected credit losses of financial assets on a collective (pool) basis when similar risk characteristics exist. For a financial asset that does not share risk characteristics with other assets, expected credit losses are measured based on an individual evaluation method.

In our estimate, with the exception of our small home equity line of credit portfolio, available-for-sale debt securities, and individually evaluated financial assets, we utilize a multi-scenario macroeconomic forecast which includes a weighting of baseline, stronger near-term growth and moderate recession scenarios. This approach allows us to develop our estimate using a wide span of economic input variables. Our baseline scenario reflects a view on likely performance of each global region and the other two scenarios are designed relative to the baseline scenario. The scenarios include both a reasonable and supportable forecast period as well as a reversion period. The reasonable and supportable forecast is typically over a two to three-year horizon, followed by a reversion period in which the economic data reverts to long-term historical experience. In general, the forecasts across the alternative economic scenarios tend to revert toward the long-term trends after the forecast period, which is the period in which the confidence interval is considered reasonable and supportable. The speed at which the scenario specific forecasts revert is based on observed historical patterns of mean reversion that are reflected in our model parameter estimates. Certain macroeconomic variables such as unemployment or home prices take longer to revert after a contraction, though specific recovery times are scenario-specific. Reversion will usually take longer the further away the scenario specific forecast is from the historical mean. On a quarterly basis, within a developed governance structure, we update these scenarios for current economic conditions and may adjust the scenario weighting based on our economic outlook.

Allowance for credit losses - Loans and lending-related commitments

The allowance for credit losses on loans is presented as a valuation allowance to loans, and the allowance for credit losses on lending-related commitments is recorded in other liabilities. The components of the allowance for credit losses on loans and lending-related commitments consist of the following three elements:

• a pooled allowance component for higher risk-rated and pass-rated commercial and institutional credits;

• a pooled allowance component for residential mortgage loans; and

• an asset-specific allowance component involving individually evaluated credits of $1 million or greater.

The first element, a pooled allowance component for higher risk-rated and pass-rated commercial and institutional credits, is based on our expected credit loss model. Individual credit analyses are performed on such loans before being assigned a credit rating. All borrowers are collectively evaluated based on their credit rating. The loss expected in each loan incorporates the borrower’s credit rating, facility rating and maturity. The loss given default, derived from the facility rating, incorporates a recovery expectation, and for unfunded lending exposures, an estimate of the use of the facility at default (usage given default). The borrower’s probability of default is derived from the associated credit rating. For each of the different parameters, specific credit models are developed for each segment of our portfolio, including commercial loans and lease financing, commercial real estate, financial institutions, and other. Segmentation is established based on risk characteristics of the loans and how risk is monitored. We use both internal and external data in the development of these parameters. In estimating the term of the exposures and resulting effect on the measurement of expected credit loss, we consider the impact of potential prepayments as well as the effect of borrower extension options. Borrower ratings are reviewed at least annually and are periodically mapped to third-party databases, including rating agency and default and recovery databases, to ensure ongoing consistency and validity. Higher risk-rated loans and lending-related commitments are reviewed quarterly.

The second element, a pooled allowance component for residential mortgage loans, is determined by first segregating our mortgage pools into two categories: (i) our wealth management mortgages and (ii) our legacy mortgage portfolio disclosed as other residential mortgages. We then apply models to each portfolio to predict prepayments, default rates and loss severity. We consider historical loss experience and use a loan-level, multi-period default model which further segments each portfolio by product

type including first lien fixed rate mortgages, first lien adjustable rate mortgages, second lien mortgages, and interest-only mortgages. We calculate the mortgage loss up to loan contractual maturity and embed a reasonable and supportable forecast and macroeconomic variable inputs which are described above. For home equity lines of credit, probability of default and loss given default are based on external data from third-party databases due to the small size of the portfolio and limited internal data. Our legacy mortgage portfolio and home equity line of credit portfolios represent small sub-segments of our mortgage loans.

The third element, individually evaluated credits, is based on individual analysis of loans of $1 million and greater which no longer share the risk characteristics with other loans. Factors we consider in measuring the extent of expected credit loss include the payment status, collateral value, the borrower’s financial condition, guarantor support, the probability of collecting scheduled principal and interest payments when due, anticipated modifications of payment structure or term for troubled borrowers, and recoveries if they can be reasonably estimated. We measure the expected credit loss as the difference between the amortized cost basis in the loan and the present value of the expected future cash flows from the borrower which is generally discounted at the loan’s effective interest rate, or the fair value of the collateral, if the loan is collateral dependent. We generally consider nonperforming loans as well as loans that have been or are anticipated to be modified under a troubled debt restructuring for individual evaluation given the risk characteristics of such loans.

Allowance for credit losses - Securities - Debt

When estimating expected credit losses, we segment our available-for-sale and held-to-maturity debt securities portfolios by major asset class. This is influenced by whether the security is structured or non-structured (i.e., direct obligation), as well as the issuer type.

Debt securities are classified as available-for-sale securities when we intend to hold the securities for an indefinite period of time or when the securities may be used for tactical asset/liability management purposes and may be sold from time to time to effectively manage interest rate exposure, prepayment risk and liquidity needs. Available-for-sale securities

are measured at fair value. The difference between fair value and amortized cost represents the unrealized gains or losses on assets classified as available-for-sale, and is recorded net of tax as an addition to, or deduction from, other comprehensive income, unless we determine that this difference or a portion thereof represents an expected credit loss. If we determine that a credit loss exists, the amount is recognized as an allowance for credit losses in securities - available-for sale, with a corresponding adjustment to the provision for credit losses. We evaluate credit losses at the individual security level and do not recognize credit losses if the fair value exceeds amortized cost, and if we determine that a credit loss exists, we limit the recognition of the loss to the difference between fair value and amortized cost. In our determination of whether an expected credit loss exists, we routinely conduct periodic reviews and examine various quantitative and qualitative factors that are unique to each portfolio, including the severity of the unrealized loss position, agency rating, credit enhancement, cash flow deterioration and other factors. The measurement of an expected credit loss is then based on the best estimate of the present value of cash flows to be collected from the debt security. Generally, cash flows are discounted at the effective interest rate implicit in the debt security. Changes to the present value of cash flows due to the passage of time are recognized within the allowance for credit losses.

We estimate expected credit losses for held-to-maturity debt securities using a similar methodology as described in the first allowance element within “Allowance for credit losses - Loans and lending-related commitments” above. The allowance for credit losses on held-to-maturity debt securities are recorded in securities - held-to-maturity. The components of the credit loss calculation for each major portfolio or asset class include a probability of default and loss given default and their values depend on the forecast behavior of variables in the macroeconomic environment. For structured debt securities, we estimated expected credit losses at the individual security level and use a cash flow model to project principal losses. Generally, cash flows are discounted at the effective interest rate implicit in the debt security. The difference is reflected in the allowance for credit losses, and changes to the present value of cash flows due to the passage of time are recognized within the allowance for credit losses.

We currently do not require an estimate of expected credit losses to be measured and recorded for U.S. Treasury securities, agency debt securities, as well as other debt securities that meet certain conditions that are based on a combination of factors such as guarantees, credit ratings, and other credit quality factors. These assets are monitored within our established governance structure on a recurring basis to determine if any changes are warranted.

Allowance for credit losses – Other financial instruments

We also estimate expected credit losses associated with margin loans, reverse repurchase agreements, security lending indemnifications, and deposits with third-party financial institutions using a similar methodology as described in the first allowance element within “Allowance for credit losses - Loans and lending-related commitments” above. The allowance for credit losses on reverse repurchase agreements are recorded in federal funds sold and securities purchased under resale agreements; the allowance for credit losses on securities lending indemnifications is recorded in other liabilities and the allowance for credit losses on deposits with third party financial institutions is recorded in cash and due from banks or interest-bearing deposits with banks. Our reverse repurchase agreements are short term and subject to continuous overcollateralization by our counterparties and timely collateral replenishment, when necessary. As a result, we estimate the expected credit loss related to the uncollateralized portion of the asset at the balance sheet date, if any, and when there is a reasonable expectation that the counterparty will not replenish the collateral in compliance with the terms of the repurchase agreement. This method is also applied to margin lending arrangements and securities lending indemnifications.

Allowance for credit losses - Other

We do not apply our credit loss measurement methodologies to accrued interest receivable balances related to our loan, debt securities and deposits with third party financial institutions assets given our nonaccrual policy that requires charge-off of interest receivable when deemed uncollectible. Accrued interest receivable related to these instruments is presented in total with other interest-bearing instruments in the consolidated balance sheet. Accrued interest receivable related to each major loan

class is disclosed within our credit quality disclosure in Note 5.

Our policy for credit losses related to purchased financial assets requires an evaluation to be performed prior to the effective purchase date to determine if more than an insignificant decline in credit quality has occurred during the period between the origination and purchase date, or in the case of debt securities, the period between the issuance and purchase date. If we purchase a financial asset with more than insignificant deterioration in credit quality, the measurement of expected credit loss is performed using the methodologies described above, and the credit loss is recorded as an allowance for credit losses on the purchase date. Subsequent to purchase, changes (favorable and unfavorable) in expected cash flows are recognized immediately in net income by adjusting the allowance. We evaluate various factors in the determination of whether a more than an insignificant decline in credit quality has occurred and these factors vary depending upon the type of asset purchased. Such factors include changes in risk rating and/or agency rating, collateral deterioration, payment status, purchase price, credit spreads, and other factors. We did not purchase any such assets during the first six months of 2020 and did not own such assets as of June 30, 2020.

We apply a separate credit loss methodology to accounts receivables to estimate the expected credit losses associated with these short-term receivables which historically have not resulted in significant credit losses. The allowance for credit losses on accounts receivable is reflected in other assets.

The qualitative component of our estimate for the allowance for credit losses is intended to capture expected losses that may not have been fully captured in the quantitative component. Through an established governance structure, management determines the qualitative allowance each period based on an evaluation of various internal and environmental factors which include: scenario weighting and sensitivity risk, credit concentration risk, economic conditions and other considerations. We may also make adjustments for idiosyncratic

risks. Once determined in the aggregate, our qualitative allowance is then allocated to each of our financial instrument portfolios except for debt securities and those instruments carried in other assets based on the respective instruments’ quantitative allowance balances. The allocation of this additional allowance for credit losses is inherently judgmental, and the entire allowance for credit losses is available to absorb credit losses regardless of the nature of the loss.

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Accounting changes and new accounting guidance (Tables)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Reconciliation of Allowance for Credit Losses

The table below presents the reconciliation of the allowance for credit losses (pre-tax).

Allowance for credit losses
(in millions)
Allowance for credit losses – Dec. 31, 2019	$	216
Impact of adopting ASU 2016-13:
Securities	7
Loans (a)	(69		)
Other	3
Total impact of adoption of ASU 2016-13	(59		)
Reclassification of credit-related reserves on accounts receivable	4
Allowance for credit losses – Jan. 1, 2020	$	161

(a)

Includes $48 million related to loans and $21 million for lending-related commitments.

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Securities (Tables)

6 Months Ended

Jun. 30, 2020

Securities [Abstract]

Amortized Cost and Fair Values of Securities

The following tables present the amortized cost, the gross unrealized gains and losses and the fair value of securities at June 30, 2020 and Dec. 31, 2019.

Securities at June 30, 2020			Gross unrealized				Fair value
	Amortized cost
(in millions)			Gains		Losses
Available-for-sale:
Agency RMBS	$	26,005	$	516	$	84	$	26,437
U.S. Treasury	23,537		1,600		—		25,137
Sovereign debt/sovereign guaranteed	15,724		165		2		15,887
Agency commercial mortgage-backed securities (“MBS”)	9,357		633		2		9,988
Foreign covered bonds	5,469		53		3		5,519
Supranational	5,385		64		1		5,448
Collateralized loan obligations (“CLOs”)	4,526		4		98		4,432
Foreign government agencies	3,536		42		—		3,578
U.S. government agencies	2,635		173		2		2,806
Other asset-backed securities (“ABS”)	2,724		29		10		2,743
Non-agency commercial MBS	2,517		129		16		2,630
Commercial paper/certificates of deposit (“CDs”)	1,849		4		—		1,853
Non-agency RMBS (a)	1,464		149		15		1,598
State and political subdivisions	1,150		31		2		1,179
Corporate bonds	789		42		—		831
Other debt securities	1		—		—		1
Total securities available-for-sale (b)(c)	$	106,668	$	3,634	$	235	$	110,067
Held-to-maturity:
Agency RMBS	$	32,869	$	1,108	$	9	$	33,968
U.S. Treasury	4,687		114		1		4,800
U.S. government agencies	2,349		6		3		2,352
Agency commercial MBS	1,982		108		—		2,090
Commercial paper/CDs	1,537		2		—		1,539
Sovereign debt/sovereign guaranteed	974		41		—		1,015
Foreign covered bonds	79		—		—		79
Non-agency RMBS	73		3		2		74
Supranational	49		—		—		49
State and political subdivisions	16		1		—		17
Total securities held-to-maturity	$	44,615	$	1,383	$	15	$	45,983
Total securities	$	151,283	$	5,017	$	250	$	156,050

(a) Includes $538 million that was included in the former Grantor Trust.

(b) In the first quarter of 2020, we adopted new accounting guidance included in ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, on a prospective basis. The allowance for credit loss on available-for-sale securities of $12 million primarily relates to CLOs. See Note 2 for additional information.

(c) Includes gross unrealized gains of $28 million and gross unrealized losses of $55 million recorded in accumulated other comprehensive income related to securities that were transferred from available-for-sale to held-to-maturity. The unrealized gains and losses are primarily related to Agency RMBS and will be amortized into net interest revenue over the contractual lives of the securities.

Securities at Dec. 31, 2019			Gross unrealized
	Amortized cost						Fair value
(in millions)			Gains		Losses
Available-for-sale:
Agency RMBS	$	27,022	$	164	$	143	$	27,043
U.S. Treasury	14,979		472		20		15,431
Sovereign debt/sovereign guaranteed	12,548		109		11		12,646
Agency commercial MBS	9,231		203		17		9,417
Foreign covered bonds	4,189		15		7		4,197
CLOs	4,078		1		16		4,063
Supranational	3,697		18		6		3,709
Foreign government agencies	2,638		7		2		2,643
Non-agency commercial MBS	2,134		46		2		2,178
Other ABS	2,141		7		5		2,143
U.S. government agencies	1,890		61		2		1,949
Non-agency RMBS (a)	1,038		202		7		1,233
State and political subdivisions	1,017		27		—		1,044
Corporate bonds	832		21		—		853
Other debt securities	1		—		—		1
Total securities available-for-sale (b)	$	87,435	$	1,353	$	238	$	88,550
Held-to-maturity:
Agency RMBS	$	27,357	$	292	$	46	$	27,603
U.S. Treasury	3,818		28		3		3,843
Agency commercial MBS	1,326		21		3		1,344
U.S. government agencies	1,023		1		2		1,022
Sovereign debt/sovereign guaranteed	756		31		—		787
Non-agency RMBS	80		4		1		83
Foreign covered bonds	79		—		—		79
Supranational	27		—		—		27
State and political subdivisions	17		—		—		17
Total securities held-to-maturity	$	34,483	$	377	$	55	$	34,805
Total securities	$	121,918	$	1,730	$	293	$	123,355

(a) Includes $640 million that was included in the former Grantor Trust.

(b)

Includes gross unrealized gains of $32 million and gross unrealized losses of $65 million recorded in accumulated other comprehensive income related to securities that were transferred from available-for-sale to held-to-maturity. The unrealized gains and losses are primarily related to Agency RMBS and will be amortized into net interest revenue over the contractual lives of the securities.

Schedule of Realized Gains, Losses, and Impairments

The following table presents the realized gains, losses and impairments, on a gross basis.

Net securities gains (losses)
(in millions)	2Q20			1Q20			2Q19			YTD20			YTD19
Realized gross gains	$	16		$	12		$	12		$	28		$	17
Realized gross losses	(7		)	(3		)	(5		)	(10		)	(9		)
Recognized gross impairments	—			—			—			—			—
Total net securities gains	$	9		$	9		$	7		$	18		$	8

Pre-Tax Securities Gains (Losses) by Type

The following table presents pre-tax net securities gains by type.

Net securities gains
(in millions)	2Q20		1Q20		2Q19		YTD20		YTD19
Supranational	$	6	$	—	$	—	$	6	$	—
U.S. Treasury	1		5		3		6		4
Other	2		4		4		6		4
Total net securities gains	$	9	$	9	$	7	$	18	$	8

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value

The following table shows the aggregate fair value of available-for-sale securities with a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 months or more without an allowance for credit losses.

Available-for-sale securities in an unrealized loss position at June 30, 2020 (a)	Less than 12 months				12 months or more				Total
	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
(in millions)
Agency RMBS	$	2,809	$	5	$	6,030	$	79	$	8,839	$	84
Sovereign debt/sovereign guaranteed	1,952		2		110		—		2,062		2
Agency commercial MBS	266		—		350		2		616		2
Foreign covered bonds	1,003		2		281		1		1,284		3
Supranational	931		1		233		—		1,164		1
CLOs	3,522		68		575		19		4,097		87
U.S. government agencies	79		2		—		—		79		2
Other ABS	760		6		203		4		963		10
Non-agency commercial MBS	476		15		39		1		515		16
Non-agency RMBS (b)	508		7		96		7		604		14
State and political subdivisions	79		2		2		—		81		2
Total securities available-for-sale (c)	$	12,385	$	110	$	7,919	$	113	$	20,304	$	223

(a) Includes $530 million of securities with an unrealized loss of greater than $1 million.

(b) Includes $42 million of securities with an unrealized loss of $1 million for less than 12 months and $1 million of securities with an unrealized loss of less than $1 million for 12 months or more that were included in the former Grantor Trust.

(c) Includes gross unrealized losses of $55 million for 12 months or more recorded in accumulated other comprehensive income related to securities that were transferred from available-for-sale to held-to-maturity. The unrealized losses are primarily related to Agency RMBS and will be amortized into net interest revenue over the contractual lives of the securities. There were no gross unrealized losses for less than 12 months.

The following table presents the temporarily impaired securities under the disclosure guidance that existed prior to the adoption of ASU 2016-13 and shows the aggregate fair value of available-for-sale securities with a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 months or more.

Temporarily impaired securities at Dec. 31, 2019	Less than 12 months				12 months or more				Total
(in millions)	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Available-for-sale:
Agency RMBS	$	8,373	$	33	$	5,912	$	110	$	14,285	$	143
U.S. Treasury	1,976		16		766		4		2,742		20
Sovereign debt/sovereign guaranteed	4,045		10		225		1		4,270		11
Agency commercial MBS	1,960		12		775		5		2,735		17
Foreign covered bonds	1,009		4		690		3		1,699		7
CLOs	1,066		2		1,499		14		2,565		16
Supranational	1,336		6		360		—		1,696		6
Foreign government agencies	1,706		2		47		—		1,753		2
Non-agency commercial MBS	525		2		45		—		570		2
Other ABS	456		3		305		2		761		5
U.S. government agencies	377		2		—		—		377		2
Non-agency RMBS (a)	101		—		113		7		214		7
State and political subdivisions	—		—		16		—		16		—
Corporate bonds	82		—		21		—		103		—
Total securities available-for-sale (b)	$	23,012	$	92	$	10,774	$	146	$	33,786	$	238

(a) Includes $2 million of securities with an unrealized loss of less than $1 million for less than 12 months and $2 million of securities with an unrealized loss of less than $1 million for 12 months or more that were included in the former Grantor Trust.

(b)

Includes gross unrealized losses of $65 million for 12 months or more recorded in accumulated other comprehensive income related to securities that were transferred from available-for-sale to held-to-maturity. The unrealized losses are primarily related to Agency RMBS and will be amortized into net interest revenue over the contractual lives of the securities. There were no gross unrealized losses for less than 12 months.

Debt Securities, Held-to-maturity, Credit Quality Indicator

The following table shows the credit quality of the held-to-maturity securities. We have included certain credit ratings information because the information can indicate the degree of credit risk to which we are exposed. Significant changes in ratings classifications could indicate increased credit risk for us and could be accompanied by a reduction in the fair value of our securities portfolio.

Held-to-maturity securities portfolio at June 30, 2020 (a)					Ratings (b)
			Net unrealized gain								BB+ and lower		A1+/A2/SP-1+
(dollars in millions)	Amortized cost				AAA/ AA-		A+/ A-		BBB+/ BBB-						Not rated
Agency RMBS	$	32,869	$	1,099	100	%	—	%	—	%	—	%	—	%	—	%
U.S. Treasury	4,687		113		100		—		—		—		—		—
U.S. government agencies	2,349		3		100		—		—		—		—		—
Agency commercial MBS	1,982		108		100		—		—		—		—		—
Commercial paper/CDs	1,537		2		—		—		—		—		100		—
Sovereign debt/sovereign guaranteed (c)	974		41		100		—		—		—		—		—
Foreign covered bonds (d)	79		—		100		—		—		—		—		—
Non-agency RMBS	73		1		42		43		2		12		—		1
Supranational	49		—		100		—		—		—		—		—
State and political subdivisions	16		1		6		2		6		—		—		86
Total held-to-maturity securities	$	44,615	$	1,368	96	%	1	%	—	%	—	%	3	%	—	%

(a) In the first quarter of 2020, we adopted new accounting guidance included in ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, on a prospective basis. See Note 2 for additional information.

(b) Represents ratings by Standard & Poor’s (“S&P”) or the equivalent.

(c) Primarily consists of exposure to France, UK and Germany.

(d)

Primarily consists of exposure to Canada.

Maturity Distribution by Carrying Amount and Yield (on Tax Equivalent Basis) of Investment Securities Portfolio

The following table shows the maturity distribution by carrying amount and yield (on a tax equivalent basis) of our securities portfolio.

Maturity distribution and yields on securities at June 30, 2020	U.S. Treasury				U.S. government agencies				State and political subdivisions				Other bonds, notes and debentures				Mortgage/ asset-backed
(dollars in millions)	Amount		Yield (a)		Amount		Yield (a)		Amount		Yield (a)		Amount		Yield (a)		Amount		Yield (a)		Total
Securities available-for-sale:
One year or less	$	5,348	0.50	%	$	25	2.55	%	$	178	2.92	%	$	13,826	0.71	%	$	—	—	%	$	19,377
Over 1 through 5 years	10,350		1.52		1,038		1.22		646		3.29		16,098		0.68		—		—		28,132
Over 5 through 10 years	6,171		1.67		1,623		2.56		107		2.42		2,838		0.53		—		—		10,739
Over 10 years	3,268		3.11		120		2.06		248		2.37		355		0.97		—		—		3,991
Mortgage-backed securities	—		—		—		—		—		—		—		—		40,653		2.24		40,653
Asset-backed securities	—		—		—		—		—		—		—		—		7,175		2.18		7,175
Total	$	25,137	1.54	%	$	2,806	2.04	%	$	1,179	2.96	%	$	33,117	0.69	%	$	47,828	2.23	%	$	110,067
Securities held-to-maturity:
One year or less	$	1,899	0.41	%	$	—	—	%	$	—	—	%	$	1,646	1.21	%	$	—	—	%	$	3,545
Over 1 through 5 years	2,788		1.91		1,696		1.12		3		5.66		919		0.66		—		—		5,406
Over 5 through 10 years	—		—		212		1.98		—		—		31		0.92		—		—		243
Over 10 years	—		—		441		2.33		13		4.76		43		0.35		—		—		497
Mortgage-backed securities	—		—		—		—		—		—		—		—		34,924		2.87		34,924
Total	$	4,687	1.32	%	$	2,349	1.42	%	$	16	4.91	%	$	2,639	1.00	%	$	34,924	2.87	%	$	44,615

(a) Yields are based upon the amortized cost of securities.

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Loans and asset quality (Tables)

6 Months Ended

Jun. 30, 2020

Receivables [Abstract]

Schedule of Loan Portfolio and Industry Concentrations of Credit Risk

The table below provides the details of our loan portfolio.

Loans	June 30, 2020		Dec. 31, 2019
(in millions)
Domestic:
Commercial	$	2,192	$	1,442
Commercial real estate	6,217		5,575
Financial institutions	3,804		4,852
Lease financings	439		537
Wealth management loans and mortgages	15,753		16,050
Other residential mortgages	450		494
Overdrafts	1,073		524
Other	1,489		1,167
Margin loans	11,476		11,907
Total domestic	42,893		42,548
Foreign:
Commercial	253		347
Commercial real estate	11		7
Financial institutions	6,949		7,626
Lease financings	589		576
Wealth management loans and mortgages	122		140
Other (primarily overdrafts)	3,147		2,230
Margin loans	1,433		1,479
Total foreign	12,504		12,405
Total loans (a)	$	55,397	$	54,953

(a)

Net of unearned income of $292 million at June 30, 2020 and $313 million at Dec. 31, 2019 primarily related to domestic and foreign lease financings.

Summary of Transactions in the Allowance for Credit Losses

Activity in the allowance for credit losses on loans and lending-related commitments is presented below.

Allowance for credit losses activity for the quarter ended June 30, 2020											Wealth management loans and mortgages			Other residential mortgages
(in millions)	Commercial		Commercial real estate		Financial institutions			Lease financings									Total
Beginning balance	$	26	$	208	$	18		$	13		$	9		$	14		$	288
Charge-offs	—		—		—			—			—			—			—
Recoveries	—		—		—			—			—			3			3
Net recoveries	—		—		—			—			—			3			3
Provision	14		164		(2		)	(10		)	2			(5		)	163
Ending balance (a)	$	40	$	372	$	16		$	3		$	11		$	12		$	454
Allowance for:
Loan losses	$	23	$	244	$	11		$	3		$	9		$	12		$	302
Lending-related commitments	17		128		5			—			2			—			152
Individually evaluated for impairment:
Loan balance	$	—	$	—	$	—		$	—		$	18	(b)	$	—		$	18
Allowance for loan losses	—		—		—			—			—			—			—

(a) Includes $11 million of allowance for credit losses related to foreign loans, primarily financial institutions.

(b) Includes collateral dependent loans of $18 million with $26 million of collateral at fair value.

Allowance for credit losses activity for the quarter ended March 31, 2020											Wealth management loans and mortgages				Other residential mortgages
(in millions)	Commercial			Commercial real estate		Financial institutions			Lease financings									Foreign			(a)	Total
Balance at Dec. 31, 2019	$	60		$	76	$	20		$	3	$	20			$	13		$	24			$	216
Impact of adopting ASU 2016-13	(43		)	14		(6		)	—		(12		)		2			(24		)		(69		)
Balance at Jan. 1, 2020	17			90		14			3		8				15			—				147
Charge-offs	—			—		—			—		—				—			—				—
Recoveries	—			—		—			—		—				—			—				—
Net (charge-offs) recoveries	—			—		—			—		—				—			—				—
Provision	9			118		4			10		1				(1		)	—				141
Ending balance (b)	$	26		$	208	$	18		$	13	$	9			$	14		$	—			$	288
Allowance for:
Loan losses	$	13		$	83	$	10		$	13	$	7			$	14		$	—			$	140
Lending-related commitments	13			125		8			—		2				—			—				148
Individually evaluated for impairment:
Loan balance	$	—		$	—	$	—		$	—	$	18		(c)	$	—		$	—			$	18
Allowance for loan losses	—			—		—			—		—				—			—				—

(a) The allowance related to foreign exposure has been reclassified to financial institutions ($10 million), commercial ($10 million) and lease financings ($4 million).

(b) Includes $12 million of allowance for credit losses related to foreign loans, primarily financial institutions.

(c) Includes collateral dependent loans of $18 million with $26 million of collateral at fair value.

Allowance for credit losses activity for the quarter ended June 30, 2019												Wealth management loans and mortgages			Other residential mortgages			All other			Foreign		Total
(in millions)	Commercial			Commercial real estate			Financial institutions			Lease financings
Beginning balance	$	82		$	74		$	23		$	4	$	21		$	15		$	—		$	29	$	248
Charge-offs	—			—			—			—		(1		)	—			—			—		(1		)
Recoveries	—			—			—			—		—			2			—			—		2
Net (charge-offs) recoveries	—			—			—			—		(1		)	2			—			—		1
Provision	(5		)	(2		)	(2		)	—		—			(3		)	—			4		(8		)
Ending balance	$	77		$	72		$	21		$	4	$	20		$	14		$	—		$	33	$	241
Allowance for:
Loan losses	$	23		$	57		$	8		$	4	$	17		$	14		$	—		$	23	$	146
Lending-related commitments	54			15			13			—		3			—			—			10		95
Individually evaluated for impairment:
Loan balance	$	96		$	—		$	—		$	—	$	16		$	—		$	—		$	—	$	112
Allowance for loan losses	10			—			—			—		—			—			—			—		10
Collectively evaluated for impairment:
Loan balance	$	1,356		$	5,192		$	4,574		$	662	$	15,563		$	549		$	12,849	(a)	$	11,539	$	52,284
Allowance for loan losses	13			57			8			4		17			14			—			23		136

(a) Includes $1,575 million of domestic overdrafts, $10,152 million of margin loans and $1,122 million of other loans at June 30, 2019.

Allowance for credit losses activity for the six months ended June 30, 2020											Wealth management loans and mortgages			Other residential mortgages			Foreign			Total
(in millions)	Commercial			Commercial real estate		Financial institutions			Lease financings
Balance at Dec. 31, 2019	$	60		$	76	$	20		$	3	$	20		$	13		$	24		$	216
Impact of adopting ASU 2016-13	(43		)	14		(6		)	—		(12		)	2			(24		)	(69		)
Balance at Jan. 1, 2020	17			90		14			3		8			15			—			147
Charge-offs	—			—		—			—		—			—			—			—
Recoveries	—			—		—			—		—			3			—			3
Net recoveries	—			—		—			—		—			3			—			3
Provision	23			282		2			—		3			(6		)	—			304
Ending balance	$	40		$	372	$	16		$	3	$	11		$	12		$	—		$	454

Allowance for credit losses activity for the six months ended June 30, 2019													Wealth management loans and mortgages			Other residential mortgages			All other		Foreign		Total
(in millions)	Commercial			Commercial real estate			Financial institutions			Lease financings
Beginning balance	$	81		$	75		$	22		$	5		$	21		$	16		$	—	$	32	$	252
Charge-offs	(11		)	—			—			—			(1		)	—			—		—		(12		)
Recoveries	—			—			—			—			—			2			—		—		2
Net (charge-offs) recoveries	(11		)	—			—			—			(1		)	2			—		—		(10		)
Provision	7			(3		)	(1		)	(1		)	—			(4		)	—		1		(1		)
Ending balance	$	77		$	72		$	21		$	4		$	20		$	14		$	—	$	33	$	241

Distribution of Nonperforming Assets

The table below presents our nonperforming assets. 

Nonperforming assets	June 30, 2020						Dec. 31, 2019
	Recorded investment
	With an allowance		Without an allowance
(in millions)					Total
Nonperforming loans:
Other residential mortgages	$	58	$	—	$	58	$	62
Wealth management loans and mortgages	10		18		28		24
Total nonperforming loans	68		18		86		86
Other assets owned	—		2		2		3
Total nonperforming assets	$	68	$	20	$	88	$	89

Information about Past Due Loans

The table below presents our past due loans. 

Past due loans and still accruing interest	June 30, 2020								Dec. 31, 2019
	Days past due						Total past due		Days past due						Total past due
(in millions)	30-59		60-89		≥90				30-59		60-89		≥90
Wealth management loans and mortgages	$	31	$	6	$	—	$	37	$	22	$	5	$	—	$	27
Other residential mortgages	5		1		—		6		8		3		—		11
Financial institutions	—		—		—		—		1		30		—		31
Commercial real estate	—		—		—		—		6		12		—		18
Total past due loans	$	36	$	7	$	—	$	43	$	37	$	50	$	—	$	87

 

Credit Profile of Loan Portfolio by Origination

The table below provides information about the credit profile of the loan portfolio by the period of origination.

Credit profile of the loan portfolio													June 30, 2020
													Revolving loans
	Originated, at amortized cost												Amortized cost		Converted to term loans - Amortized cost				Accrued interest receivable
(in millions)	YTD20		2019		2018		2017		2016		Prior to 2016						Total (a)
Commercial:
Investment grade	$	107	$	213	$	106	$	554	$	57	$	—	$	1,054	$	—	$	2,091
Non-investment grade	40		69		12		—		3		—		230		—		354
Total commercial	147		282		118		554		60		—		1,284		—		2,445		$	3
Commercial real estate:
Investment grade	500		1,212		806		550		431		422		292		—		4,213
Non-investment grade	77		410		459		179		421		212		228		29		2,015
Total commercial real estate	577		1,622		1,265		729		852		634		520		29		6,228		8
Financial institutions:
Investment grade	27		247		133		125		14		181		7,934		—		8,661
Non-investment grade	53		29		—		—		—		—		2,010		—		2,092
Total financial institutions	80		276		133		125		14		181		9,944		—		10,753		25
Wealth management loans and mortgages:
Investment grade	34		81		12		171		56		85		6,877		—		7,316
Non-investment grade	—		—		—		—		—		35		79		—		114
Wealth management mortgages	491		1,126		719		1,360		1,736		2,976		37		—		8,445
Total wealth management loans and mortgages	525		1,207		731		1,531		1,792		3,096		6,993		—		15,875		27
Lease financings	45		20		20		12		29		902		—		—		1,028		—
Other residential mortgages	—		—		—		—		—		450		—		—		450		2
Other loans	—		—		—		—		—		—		1,530		—		1,530		1
Margin loans	2,552		1,000		—		—		—		—		9,357		—		12,909		11
Total loans	$	3,926	$	4,407	$	2,267	$	2,951	$	2,747	$	5,263	$	29,628	$	29	$	51,218	$	77

(a)

Excludes overdrafts of $4,179 million. Overdrafts occur on a daily basis primarily in the custody and securities clearance business and are generally repaid within two business days.

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Goodwill and intangible assets (Tables)

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Breakdown of Goodwill by Business

The tables below provide a breakdown of goodwill by business.

Goodwill by business (in millions)	Investment Services			Investment and Wealth Management			Other			Consolidated
Balance at Dec. 31, 2019	$	8,332		$	9,007		$	47		$	17,386
Foreign currency translation	(24		)	(109		)	—			(133		)
Other (a)	47			—			(47		)	—
Balance at June 30, 2020	$	8,355		$	8,898		$	—		$	17,253

(a) Reflects the transfer of goodwill associated with the Capital Markets business.

Goodwill by business (in millions)	Investment Services			Investment and Wealth Management			Other		Consolidated
Balance at Dec. 31, 2018	$	8,333		$	8,970		$	47	$	17,350
Foreign currency translation	(6		)	(7		)	—		(13		)
Balance at June 30, 2019	$	8,327		$	8,963		$	47	$	17,337

Breakdown of Intangible Assets by Business

The tables below provide a breakdown of intangible assets by business.

Intangible assets – net carrying amount by business (in millions)	Investment Services			Investment and Wealth Management			Other		Consolidated
Balance at Dec. 31, 2019	$	678		$	1,580		$	849	$	3,107
Amortization	(36		)	(16		)	—		(52		)
Foreign currency translation	—			(10		)	—		(10		)
Balance at June 30, 2020	$	642		$	1,554		$	849	$	3,045

Intangible assets – net carrying amount by business (in millions)	Investment Services			Investment and Wealth Management			Other		Consolidated
Balance at Dec. 31, 2018	$	758		$	1,613		$	849	$	3,220
Amortization	(41		)	(18		)	—		(59		)
Foreign currency translation	—			(1		)	—		(1		)
Balance at June 30, 2019	$	717		$	1,594		$	849	$	3,160

Breakdown of Intangible Assets by Type

The table below provides a breakdown of intangible assets by type.

Intangible assets	June 30, 2020								Dec. 31, 2019
(in millions)	Gross carrying amount		Accumulated amortization			Net carrying amount		Remaining weighted- average amortization period	Gross carrying amount		Accumulated amortization			Net carrying amount
Subject to amortization: (a)
Customer contracts—Investment Services	$	1,514	$	(1,244	)	$	270	10 years	$	1,520	$	(1,214	)	$	306
Customer relationships—Investment and Wealth Management	709		(554		)	155		10 years	712		(544		)	168
Other	64		(19		)	45		14 years	64		(16		)	48
Total subject to amortization	2,287		(1,817		)	470		10 years	2,296		(1,774		)	522
Not subject to amortization: (b)
Tradenames	1,291		N/A			1,291		N/A	1,293		N/A			1,293
Customer relationships	1,284		N/A			1,284		N/A	1,292		N/A			1,292
Total not subject to amortization	2,575		N/A			2,575		N/A	2,585		N/A			2,585
Total intangible assets	$	4,862	$	(1,817	)	$	3,045	N/A	$	4,881	$	(1,774	)	$	3,107

(a) Excludes fully amortized intangible assets.

(b) Intangible assets not subject to amortization have an indefinite life.

Estimated Annual Amortization Expense

Estimated annual amortization expense for current intangibles for the next five years is as follows:

For the year ended Dec. 31,	Estimated amortization expense (in millions)
2020		$	104
2021		81
2022		63
2023		52
2024		45

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Other assets (Tables)

6 Months Ended

Jun. 30, 2020

Other Assets [Abstract]

Summary of Other Assets Presented on the Consolidated Balance Sheet

The following table provides the components of other assets presented on the consolidated balance sheet.

Other assets	June 30, 2020		Dec. 31, 2019
(in millions)
Corporate/bank-owned life insurance	$	5,245	$	5,219
Accounts receivable	3,404		3,802
Fails to deliver	3,201		1,671
Software	1,778		1,590
Prepaid pension assets	1,545		1,464
Equity in a joint venture and other investments	1,146		1,102
Renewable energy investments	1,083		1,144
Qualified affordable housing project investments	962		1,024
Prepaid expense	544		491
Federal Reserve Bank stock	477		466
Income taxes receivable	194		388
Seed capital	149		184
Fair value of hedging derivatives	137		21
Other (a)	1,441		1,655
Total other assets	$	21,306	$	20,221

(a)

At June 30, 2020 and Dec. 31, 2019, other assets include $7 million and $22 million, respectively, of Federal Home Loan Bank stock, at cost.

Equity Securities without Readily Determinable Fair Value

The following table presents the adjustments on the non-readily marketable equity securities.

Adjustments on non-readily marketable equity securities													Life-to-date
(in millions)	2Q20		1Q20		2Q19			YTD20		YTD19
Upward adjustments	$	2	$	4	$	2		$	6	$	2		$	38
Downward adjustments	—		—		(1		)	—		(1		)	(4		)
Net adjustments	$	2	$	4	$	1		$	6	$	1		$	34

Summary of Investments Valued Using NAV

The table below presents information on our investments valued using NAV.

Investments valued using NAV	June 30, 2020					Dec. 31, 2019
(in millions)	Fair value		Unfunded  commitments			Fair value		Unfunded commitments
Seed capital (a)	$	56		$	12	$	59		$	—
Private equity investments (SBICs) (b)	91			58		89			55
Other (c)	40			—		33			—
Total	$	187		$	70	$	181		$	55

(a) Primarily includes leveraged loans and structured credit funds, which are generally not redeemable. Distributions from such investments will be received as the underlying investments in the funds, which have lives of six to 11 years at June 30, 2020 and lives of six years at Dec. 31, 2019, are liquidated.

(b) Private equity investments include Volcker Rule-compliant investments in SBICs that invest in various sectors of the economy. Private equity investments do not have redemption rights. Distributions from such investments will be received as the underlying investments in the private equity investments, which have a life of 10 years, are liquidated.

(c) Primarily includes investments in funds that relate to deferred compensation arrangements with employees. Investments in funds can be redeemed on a monthly to quarterly basis with redemption notice periods of up to 95 days.

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Contract revenue (Tables)

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table presents fee revenue related to contracts with customers, disaggregated by type of fee revenue, for each business segment. Business segment data has been determined on an internal management basis of accounting, rather than the generally accepted accounting principles used for consolidated financial reporting.

Disaggregation of contract revenue by business segment
	Quarter ended
	June 30, 2020											March 31, 2020											June 30, 2019 (a)
(in millions)	IS			IWM			Other			Total		IS			IWM			Other			Total		IS			IWM			Other			Total
Fee revenue - contract revenue:
Investment services fees:
Asset servicing fees	$	1,147		$	25		$	(15	)	$	1,157	$	1,127		$	23		$	(11	)	$	1,139	$	1,095		$	20		$	(6	)	$	1,109
Clearing services fees	431			—			—			431		470			—			—			470		411			—			(1		)	410
Issuer services fees	277			—			—			277		263			—			—			263		291			—			—			291
Treasury services fees	144			—			1			145		149			—			—			149		140			1			—			141
Total investment services fees	1,999			25			(14		)	2,010		2,009			23			(11		)	2,021		1,937			21			(7		)	1,951
Investment management and performance fees	4			792			(5		)	791		5			862			(4		)	863		4			833			(4		)	833
Financing-related fees	23			1			—			24		28			—			—			28		16			—			1			17
Distribution and servicing	(7		)	34			—			27		(12		)	43			—			31		(13		)	44			—			31
Investment and other income	62			(41		)	3			24		72			(50		)	—			22		69			(48		)	—			21
Total fee revenue - contract revenue	2,081			811			(16		)	2,876		2,102			878			(15		)	2,965		2,013			850			(10		)	2,853
Fee and other revenue - not in scope of Accounting Standards Codification (“ASC”) 606 (b)(c)	258			27			54			339		334			(32		)	45			347		220			4			41			265
Total fee and other revenue	$	2,339		$	838		$	38		$	3,215	$	2,436		$	846		$	30		$	3,312	$	2,233		$	854		$	31		$	3,118

(a) Restated to reflect the first quarter 2020 business segment reclassifications. There was no impact on total revenue, by type or in aggregate.

(b) Primarily includes foreign exchange and other trading revenue, investment and other income (loss), financing-related fees, asset servicing fees, net securities gains (losses), all of which are accounted for using other accounting guidance.

(c) The Investment and Wealth Management business includes income (loss) from consolidated investment management funds, net of noncontrolling interests, of $39 million in the second quarter of 2020, $(20) million in the first quarter of 2020 and $6 million in the second quarter of 2019.

IS - Investment Services segment.

IWM - Investment and Wealth Management segment.

Disaggregation of contract revenue by business segment	Year-to-date
	June 30, 2020											June 30, 2019 (a)
(in millions)	IS			IWM			Other			Total		IS			IWM			Other			Total
Fee revenue - contract revenue:
Investment services fees:
Asset servicing fees	$	2,274		$	48		$	(26	)	$	2,296	$	2,176		$	40		$	(14	)	$	2,202
Clearing services fees	901			—			—			901		809			—			(1		)	808
Issuer services fees	540			—			—			540		542			—			—			542
Treasury services fees	293			—			1			294		272			1			—			273
Total investment services fees	4,008			48			(25		)	4,031		3,799			41			(15		)	3,825
Investment management and performance fees	9			1,654			(9		)	1,654		8			1,674			(8		)	1,674
Financing-related fees	51			1			—			52		33			—			1			34
Distribution and servicing	(19		)	77			—			58		(27		)	89			—			62
Investment and other income	134			(91		)	3			46		138			(97		)	—			41
Total fee revenue - contract revenue	4,183			1,689			(31		)	5,841		3,951			1,707			(22		)	5,636
Fee and other revenue - not in scope of ASC 606 (b)(c)	592			(5		)	99			686		443			16			71			530
Total fee and other revenue	$	4,775		$	1,684		$	68		$	6,527	$	4,394		$	1,723		$	49		$	6,166

(a) Restated to reflect the first quarter 2020 business segment reclassifications. There was no impact on total revenue, by type or in aggregate.

(b) Primarily includes foreign exchange and other trading revenue, investment and other income (loss), financing-related fees, asset servicing fees, net securities gains (losses), all of which are accounted for using other accounting guidance.

(c) The Investment and Wealth Management business includes income from consolidated investment management funds, net of noncontrolling interests, of $19 million in the first six months of 2020 and $22 million in the first six months of 2019.

IS - Investment Services segment.

IWM - Investment and Wealth Management segment.

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Net interest revenue (Tables)

6 Months Ended

Jun. 30, 2020

Interest Revenue (Expense), Net [Abstract]

Components of Net Interest Revenue

The following table provides the components of net interest revenue presented on the consolidated income statement.

Net interest revenue	Quarter ended								Year-to-date
(in millions)	June 30, 2020			March 31, 2020		June 30, 2019			June 30, 2020		June 30, 2019
Interest revenue
Deposits with the Federal Reserve and other central banks	$	(7	)	$	80	$	113		$	73	$	252
Deposits with banks	40			58		64			98		127
Federal funds sold and securities purchased under resale agreements	61			396		568			457		1,042
Margin loans	40			87		119			127		254
Non-margin loans	230			309		365			539		720
Securities:
Taxable	556			594		687			1,150		1,393
Exempt from federal income taxes	6			6		10			12		22
Total securities	562			600		697			1,162		1,415
Trading securities	17			40		39			57		75
Total interest revenue	943			1,570		1,965			2,513		3,885
Interest expense
Deposits	(17		)	240		432			223		823
Federal funds purchased and securities sold under repurchase agreements	1			275		372			276		703
Trading liabilities	2			7		11			9		18
Other borrowed funds	7			4		20			11		44
Commercial paper	1			6		18			7		26
Customer payables	(1		)	30		69			29		139
Long-term debt	170			194		241			364		489
Total interest expense	163			756		1,163			919		2,242
Net interest revenue	780			814		802			1,594		1,643
Provision for credit losses	143			169		(8		)	312		(1		)
Net interest revenue after provision for credit losses	$	637		$	645	$	810		$	1,282	$	1,644

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Employee benefit plans (Tables)

6 Months Ended

Jun. 30, 2020

Retirement Benefits [Abstract]

Combined Data for Domestic and Foreign Defined Benefit Pension and Post Retirement Healthcare Plans

The components of net periodic benefit (credit) cost are presented below. The service cost component is reflected in staff expense, whereas the remaining components are reflected in other expense.

Net periodic benefit (credit) cost	Quarter ended
	June 30, 2020									March 31, 2020									June 30, 2019
(in millions)	Domestic pension benefits			Foreign pension benefits			Health care benefits			Domestic pension benefits			Foreign pension benefits			Health care benefits			Domestic pension benefits			Foreign pension benefits			Health care benefits
Service cost	$	—		$	3		$	—		$	—		$	3		$	—		$	—		$	3		$	—
Interest cost	39			6			1			39			7			1			45			8			1
Expected return on assets	(79		)	(9		)	(2		)	(80		)	(10		)	(1		)	(84		)	(12		)	(2		)
Other	21			3			—			22			3			(1		)	13			1			—
Net periodic benefit (credit) cost	$	(19	)	$	3		$	(1	)	$	(19	)	$	3		$	(1	)	$	(26	)	$	—		$	(1	)

Net periodic benefit (credit) cost	Year-to-date
	June 30, 2020									June 30, 2019
(in millions)	Domestic pension benefits			Foreign pension benefits			Health care benefits			Domestic pension benefits			Foreign pension benefits			Health care benefits
Service cost	$	—		$	6		$	—		$	—		$	6		$	—
Interest cost	78			13			2			89			16			3
Expected return on assets	(159		)	(19		)	(3		)	(168		)	(23		)	(4		)
Other	43			6			(1		)	26			1			(1		)
Net periodic benefit (credit) cost	$	(38	)	$	6		$	(2	)	$	(53	)	$	—		$	(2	)

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Variable interest entities and securitization (Tables)

6 Months Ended

Jun. 30, 2020

Securitizations And Variable Interest Entities Disclosure [Abstract]

Incremental Assets and Liabilities Included in Consolidated Financial Statements

The following table presents the incremental assets and liabilities included in the consolidated balance sheet as of June 30, 2020 and Dec. 31, 2019. The net assets of any consolidated VIE are solely available to settle the liabilities of the VIE and to settle any investors’ ownership liquidation requests, including any seed capital we invested in the VIE.

Consolidated investments	June 30, 2020							Dec. 31, 2019
(in millions)	Investment Management funds			Securitization		Total consolidated investments		Investment Management funds			Securitization		Total consolidated investments
Trading assets	$	450		$	400	$	850	$	229		$	400	$	629
Other assets	10			—		10		16			—		16
Total assets	$	460	(a)	$	400	$	860	$	245	(b)	$	400	$	645
Other liabilities	$	4		$	399	$	403	$	1		$	387	$	388
Total liabilities	$	4	(a)	$	399	$	403	$	1	(b)	$	387	$	388
Nonredeemable noncontrolling interests	$	112	(a)	$	—	$	112	$	102	(b)	$	—	$	102

 

(a) Includes voting model entities (“VMEs”) with assets of $283 million, liabilities of $1 million and nonredeemable noncontrolling interests of $37 million.

(b)

Includes VMEs with assets of $50 million, liabilities of $1 million and nonredeemable noncontrolling interests of $1 million.

Schedule of Variable Interest Entities

As of June 30, 2020 and Dec. 31, 2019, the following assets and liabilities related to the VIEs where we are

not the primary beneficiary were included in our consolidated balance sheets and primarily related to accounting for our investments in qualified affordable housing and renewable energy projects.

The maximum loss exposure indicated in the table below relates solely to our investments in, and unfunded commitments to, the VIEs.

Non-consolidated VIEs	June 30, 2020						Dec. 31, 2019
(in millions)	Assets		Liabilities		Maximum loss exposure		Assets		Liabilities		Maximum loss exposure
Securities - Available-for-sale (a)	$	199	$	—	$	199	$	208	$	—	$	208
Other	2,237		363		2,609		2,400		422		2,822

(a)

Includes investments in the Company’s sponsored CLOs.

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Preferred stock (Tables)

6 Months Ended

Jun. 30, 2020

Stockholders' Equity Note [Abstract]

Preferred Stock Summary

The following table summarizes the Parent’s preferred stock issued and outstanding at June 30, 2020 and Dec. 31, 2019.

Preferred stock summary (a)		Total shares issued and outstanding		Carrying value (b)
				(in millions)
		June 30, 2020	Dec. 31, 2019	June 30, 2020		Dec. 31, 2019
	Per annum dividend rate
Series A	Greater of (i) three-month LIBOR plus 0.565% for the related distribution period; or (ii) 4.000%	5,001	5,001	$	500	$	500
Series C	5.2%	5,825	5,825	568		568
Series D	4.50% to but excluding June 20, 2023, then a floating rate equal to the three-month LIBOR plus 2.46%	5,000	5,000	494		494
Series E	4.95% to but excluding June 20, 2020, then a floating rate equal to the three-month LIBOR plus 3.42%	10,000	10,000	990		990
Series F	4.625% to but excluding Sept. 20, 2026, then a floating rate equal to the three-month LIBOR plus 3.131%	10,000	10,000	990		990
Series G	4.70% to but excluding Sept. 20, 2025, then a floating rate equal to the five-year treasury rate plus 4.358%	10,000	—	990		—
Total		45,826	35,826	$	4,532	$	3,542

(a) All outstanding preferred stock is noncumulative perpetual preferred stock with a liquidation preference of $100,000 per share.

(b)

The carrying value of the Series C, Series D, Series E, Series F and Series G preferred stock is recorded net of issuance costs.

Summary of Preferred Dividends Paid

The table below presents the dividends paid on the Parent’s preferred stock.

Preferred dividends paid
(dollars in millions, except per share amounts)	Depositary shares per share		2Q20				1Q20				2Q19				YTD20				YTD19
			Per share		Total dividend		Per share		Total dividend		Per share		Total dividend		Per share		Total dividend		Per share		Total dividend
Series A	100	(a)	$	1,022.22	$	5	$	1,011.11	$	5	$	1,022.22	$	5	$	2,033.33	$	10	$	2,022.22	$	10
Series C	4,000		1,300.00		8		1,300.00		8		1,300.00		7		2,600.00		16		2,600.00		15
Series D	100		2,250.00		11		N/A		—		2,250.00		11		2,250.00		11		2,250.00		11
Series E	100		2,475.00		25		N/A		—		2,475.00		25		2,475.00		25		2,475.00		25
Series F	100		N/A		—		2,312.50		23		N/A		—		2,312.50		23		2,312.50		23
Total					$	49			$	36			$	48			$	85			$	84

(a) Represents Normal Preferred Capital Securities.

N/A - Not applicable.

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Other comprehensive income (loss) (Tables)

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

Components of Other Comprehensive Income (Loss)

Components of other comprehensive income (loss)	Quarter ended
	June 30, 2020									March 31, 2020									June 30, 2019
(in millions)	Pre-tax amount			Tax (expense) benefit			After-tax amount			Pre-tax amount			Tax (expense) benefit			After-tax amount			Pre-tax amount			Tax (expense) benefit			After-tax amount
Foreign currency translation:
Foreign currency translation adjustments arising during the period (a)	$	104		$	11		$	115		$	(265	)	$	(104	)	$	(369	)	$	29		$	(19	)	$	10
Total foreign currency translation	104			11			115			(265		)	(104		)	(369		)	29			(19		)	10
Unrealized gain (loss) on assets available-for-sale:
Unrealized gain (loss) arising during period	989			(236		)	753			243			(60		)	183			384			(97		)	287
Reclassification adjustment (b)	(9		)	2			(7		)	(9		)	2			(7		)	(7		)	2			(5		)
Net unrealized gain (loss) on assets available-for-sale	980			(234		)	746			234			(58		)	176			377			(95		)	282
Defined benefit plans:
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost (b)	24			(5		)	19			24			(6		)	18			12			(2		)	10
Total defined benefit plans	24			(5		)	19			24			(6		)	18			12			(2		)	10
Unrealized gain (loss) on cash flow hedges:
Unrealized hedge gain (loss) arising during period	3			(1		)	2			(13		)	3			(10		)	2			(2		)	—
Reclassification of net (gain) loss to net income:
Foreign exchange (“FX”) contracts - staff expense	3			(1		)	2			(1		)	—			(1		)	—			—			—
Total reclassifications to net income	3			(1		)	2			(1		)	—			(1		)	—			—			—
Net unrealized gain (loss) on cash flow hedges	6			(2		)	4			(14		)	3			(11		)	2			(2		)	—
Total other comprehensive income (loss)	$	1,114		$	(230	)	$	884		$	(21	)	$	(165	)	$	(186	)	$	420		$	(118	)	$	302

(a) Includes the impact of hedges of net investments in foreign subsidiaries. See Note 17 for additional information.

(b) The reclassification adjustment related to the unrealized gain (loss) on assets available-for-sale is recorded as net securities gains on the consolidated income statement. The amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost is recorded as staff expense on the consolidated income statement.

Components of other comprehensive income (loss)	Year-to-date
	June 30, 2020									June 30, 2019
(in millions)	Pre-tax amount			Tax (expense) benefit			After-tax amount			Pre-tax amount			Tax (expense) benefit			After-tax amount
Foreign currency translation:
Foreign currency translation adjustments arising during the period (a)	$	(161	)	$	(93	)	$	(254	)	$	56		$	(17	)	$	39
Total foreign currency translation	(161		)	(93		)	(254		)	56			(17		)	39
Unrealized gain (loss) on assets available-for-sale:
Unrealized gain (loss) arising during period	1,232			(296		)	936			706			(180		)	526
Reclassification adjustment (b)	(18		)	4			(14		)	(8		)	2			(6		)
Net unrealized gain (loss) on assets available-for-sale	1,214			(292		)	922			698			(178		)	520
Defined benefit plans:
Net gain (loss) arising during the period	—			—			—			(11		)	2			(9		)
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost (b)	48			(11		)	37			25			(5		)	20
Total defined benefit plans	48			(11		)	37			14			(3		)	11
Unrealized (loss) gain on cash flow hedges:
Unrealized hedge (loss) gain arising during period	(10		)	2			(8		)	8			(6		)	2
Reclassification of net loss (gain) to net income:
FX contracts - staff expense	2			(1		)	1			1			2			3
Total reclassifications to net income	2			(1		)	1			1			2			3
Net unrealized (loss) gain on cash flow hedges	(8		)	1			(7		)	9			(4		)	5
Total other comprehensive income (loss)	$	1,093		$	(395	)	$	698		$	777		$	(202	)	$	575

(a) Includes the impact of hedges of net investments in foreign subsidiaries. See Note 17 for additional information.

(b)

The reclassification adjustment related to the unrealized gain (loss) on assets available-for-sale is recorded as net securities gains on the consolidated income statement. The amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost is recorded as staff expense on the consolidated income statement.

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Fair value measurement (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Financial Instruments Carried at Fair Value on Recurring Basis

The following tables present the financial instruments carried at fair value at June 30, 2020 and Dec. 31, 2019, by caption on the consolidated balance sheet and by the three-level valuation hierarchy. We have included credit ratings information in certain of the tables because the information indicates the degree of credit risk to which we are exposed, and significant changes in ratings classifications could result in increased risk for us.

Assets measured at fair value on a recurring basis at June 30, 2020													Total carrying value
(dollars in millions)	Level 1			Level 2			Level 3			Netting (a)
Available-for-sale securities:
Agency RMBS	$	—		$	26,437		$	—		$	—		$	26,437
U.S. Treasury	25,137			—			—			—			25,137
Sovereign debt/sovereign guaranteed	8,570			7,317			—			—			15,887
Agency commercial MBS	—			9,988			—			—			9,988
Foreign covered bonds	—			5,519			—			—			5,519
Supranational	—			5,448			—			—			5,448
CLOs	—			4,432			—			—			4,432
Foreign government agencies	—			3,578			—			—			3,578
U.S. government agencies	—			2,806			—			—			2,806
Other ABS	—			2,743			—			—			2,743
Non-agency commercial MBS	—			2,630			—			—			2,630
Commercial paper/CDs	—			1,853			—			—			1,853
Non-agency RMBS (b)	—			1,598			—			—			1,598
State and political subdivisions	—			1,179			—			—			1,179
Corporate bonds	—			831			—			—			831
Other debt securities	—			1			—			—			1
Total available-for-sale securities	33,707			76,360			—			—			110,067
Trading assets:
Debt instruments	4,782			2,775			—			—			7,557
Equity instruments (c)	2,397			—			—			—			2,397
Derivative assets not designated as hedging:
Interest rate	5			5,496			—			(2,436		)	3,065
Foreign exchange	—			4,322			—			(3,204		)	1,118
Equity and other contracts	2			11			—			—			13
Total derivative assets not designated as hedging	7			9,829			—			(5,640		)	4,196
Total trading assets	7,186			12,604			—			(5,640		)	14,150
Other assets:
Derivative assets designated as hedging:
Foreign exchange	—			137			—			—			137
Total derivative assets designated as hedging	—			137			—			—			137
Other assets (d)	52			153			—			—			205
Assets measured at NAV (d)													187
Subtotal assets of operations at fair value	40,945			89,254			—			(5,640		)	124,746
Percentage of assets of operations prior to netting	31		%	69		%	—		%
Assets of consolidated investment management funds	416			44			—			—			460
Total assets	$	41,361		$	89,298		$	—		$	(5,640	)	$	125,206
Percentage of total assets prior to netting	32		%	68		%	—		%

Liabilities measured at fair value on a recurring basis at June 30, 2020													Total carrying value
(dollars in millions)	Level 1			Level 2			Level 3			Netting (a)
Trading liabilities:
Debt instruments	$	2,589		$	75		$	—		$	—		$	2,664
Equity instruments	20			—			—			—			20
Derivative liabilities not designated as hedging:
Interest rate	7			4,661			—			(2,680		)	1,988
Foreign exchange	—			4,036			—			(3,134		)	902
Equity and other contracts	1			23			—			(3		)	21
Total derivative liabilities not designated as hedging	8			8,720			—			(5,817		)	2,911
Total trading liabilities	2,617			8,795			—			(5,817		)	5,595
Long-term debt (c)	—			399			—			—			399
Other liabilities – derivative liabilities designated as hedging:
Interest rate	—			915			—			—			915
Foreign exchange	—			49			—			—			49
Total other liabilities – derivative liabilities designated as hedging	—			964			—			—			964
Subtotal liabilities of operations at fair value	2,617			10,158			—			(5,817		)	6,958
Percentage of liabilities of operations prior to netting	20		%	80		%	—		%
Liabilities of consolidated investment management funds	—			4			—			—			4
Total liabilities	$	2,617		$	10,162		$	—		$	(5,817	)	$	6,962
Percentage of total liabilities prior to netting	20		%	80		%	—		%

(a) ASC 815, Derivatives and Hedging, permits the netting of derivative receivables and derivative payables under legally enforceable master netting agreements and permits the netting of cash collateral. Netting is applicable to derivatives not designated as hedging instruments included in trading assets or trading liabilities and derivatives designated as hedging instruments included in other assets or other liabilities. Netting is allocated to the derivative products based on the net fair value of each product.

(b) Includes $538 million in Level 2 that was included in the former Grantor Trust.

(c) Includes certain interests in securitizations.

(d) Includes seed capital, private equity investments and other assets.

Assets measured at fair value on a recurring basis at Dec. 31, 2019													Total carrying value
(dollars in millions)	Level 1			Level 2			Level 3			Netting (a)
Available-for-sale securities:
Agency RMBS	$	—		$	27,043		$	—		$	—		$	27,043
U.S. Treasury	15,431			—			—			—			15,431
Sovereign debt/sovereign guaranteed	7,784			4,862			—			—			12,646
Agency commercial MBS	—			9,417			—			—			9,417
Foreign covered bonds	—			4,197			—			—			4,197
CLOs	—			4,063			—			—			4,063
Supranational	—			3,709			—			—			3,709
Foreign government agencies	—			2,643			—			—			2,643
Non-agency commercial MBS	—			2,178			—			—			2,178
Other ABS	—			2,143			—			—			2,143
U.S. government agencies	—			1,949			—			—			1,949
Non-agency RMBS (b)	—			1,233			—			—			1,233
State and political subdivisions	—			1,044			—			—			1,044
Corporate bonds	—			853			—			—			853
Other debt securities	—			1			—			—			1
Total available-for-sale securities	23,215			65,335			—			—			88,550
Trading assets:
Debt instruments	1,568			4,243			—			—			5,811
Equity instruments (c)	4,539			—			—			—			4,539
Derivative assets not designated as hedging:
Interest rate	4			3,686			—			(1,792		)	1,898
Foreign exchange	—			5,331			—			(4,021		)	1,310
Equity and other contracts	—			19			—			(6		)	13
Total derivative assets not designated as hedging	4			9,036			—			(5,819		)	3,221
Total trading assets	6,111			13,279			—			(5,819		)	13,571
Other assets:
Derivative assets designated as hedging:
Foreign exchange	—			21			—			—			21
Total derivative assets designated as hedging	—			21			—			—			21
Other assets (d)	38			179			—			—			217
Assets measured at NAV (d)													181
Subtotal assets of operations at fair value	29,364			78,814			—			(5,819		)	102,540
Percentage of assets of operations prior to netting	27		%	73		%	—		%
Assets of consolidated investment management funds	212			33			—			—			245
Total assets	$	29,576		$	78,847		$	—		$	(5,819	)	$	102,785
Percentage of total assets prior to netting	27		%	73		%	—		%

Liabilities measured at fair value on a recurring basis at Dec. 31, 2019													Total carrying value
(dollars in millions)	Level 1			Level 2			Level 3			Netting (a)
Trading liabilities:
Debt instruments	$	1,477		$	107		$	—		$	—		$	1,584
Equity instruments	73			—			—			—			73
Derivative liabilities not designated as hedging:
Interest rate	6			3,244			—			(1,986		)	1,264
Foreign exchange	—			5,340			—			(3,428		)	1,912
Equity and other contracts	3			6			—			(1		)	8
Total derivative liabilities not designated as hedging	9			8,590			—			(5,415		)	3,184
Total trading liabilities	1,559			8,697			—			(5,415		)	4,841
Long-term debt (c)	—			387			—			—			387
Other liabilities – derivative liabilities designated as hedging:
Interest rate	—			350			—			—			350
Foreign exchange	—			257			—			—			257
Total other liabilities – derivative liabilities designated as hedging	—			607			—			—			607
Subtotal liabilities of operations at fair value	1,559			9,691			—			(5,415		)	5,835
Percentage of liabilities of operations prior to netting	14		%	86		%	—		%
Liabilities of consolidated investment management funds	1			—			—			—			1
Total liabilities	$	1,560		$	9,691		$	—		$	(5,415	)	$	5,836
Percentage of total liabilities prior to netting	14		%	86		%	—		%

(a) ASC 815, Derivatives and Hedging, permits the netting of derivative receivables and derivative payables under legally enforceable master netting agreements and permits the netting of cash collateral. Netting is applicable to derivatives not designated as hedging instruments included in trading assets or trading liabilities and derivatives designated as hedging instruments included in other assets or other liabilities. Netting is allocated to the derivative products based on the net fair value of each product.

(b) Includes $640 million in Level 2 that was included in the former Grantor Trust.

(c) Includes certain interests in securitizations.

(d)

Includes seed capital, private equity investments and other assets.

Details Of Certain Items Measured At Fair Value on Recurring Basis

Details of certain available-for-sale securities measured at fair value on a recurring basis	June 30, 2020											Dec. 31, 2019
	Total carrying value			Ratings (a)								Total carrying value			Ratings (a)
				AAA/ AA-		A+/ A-		BBB+/ BBB-		BB+ and lower					AAA/ AA-		A+/ A-		BBB+/ BBB-		BB+ and lower
(dollars in millions)			(b)											(b)
Non-agency RMBS (c), originated in:
2007-2020	$	938		82	%	1	%	—	%	17	%	$	464		55	%	1	%	—	%	44	%
2006	250			—		22		—		78		291			—		21		—		79
2005	262			5		2		7		86		305			5		2		8		85
2004 and earlier	148			21		22		8		49		173			22		24		4		50
Total non-agency RMBS	$	1,598		51	%	6	%	2	%	41	%	$	1,233		25	%	9	%	3	%	63	%
Non-agency commercial MBS originated in:
2009-2020	$	2,630		100	%	—	%	—	%	—	%	$	2,178		98	%	2	%	—	%	—	%
Foreign covered bonds:
Canada	$	2,241		100	%	—	%	—	%	—	%	$	1,798		100	%	—	%	—	%	—	%
UK	1,093			100		—		—		—		984			100		—		—		—
Australia	750			100		—		—		—		431			100		—		—		—
Norway	533			100		—		—		—		287			100		—		—		—
Germany	407			100		—		—		—		357			100		—		—		—
Other	495			100		—		—		—		340			100		—		—		—
Total foreign covered bonds	$	5,519		100	%	—	%	—	%	—	%	$	4,197		100	%	—	%	—	%	—	%
Sovereign debt/sovereign guaranteed:
UK	$	3,773		100	%	—	%	—	%	—	%	$	3,318		100	%	—	%	—	%	—	%
Germany	2,346			100		—		—		—		1,997			100		—		—		—
France	2,238			100		—		—		—		1,272			100		—		—		—
Spain	1,961			—		4		96		—		1,453			—		6		94		—
Italy	1,069			—		—		100		—		1,260			—		—		100		—
Singapore	931			100		—		—		—		742			100		—		—		—
Ireland	676			29		71		—		—		301			—		100		—		—
Netherlands	564			100		—		—		—		791			100		—		—		—
Canada	502			100		—		—		—		271			100		—		—		—
Japan	434			—		100		—		—		274			—		100		—		—
Belgium	411			100		—		—		—		79			100		—		—		—
Austria	331			100		—		—		—		240			100		—		—		—
Hong Kong	330			100		—		—		—		411			100		—		—		—
Other (d)	321			45		—		21		34		237			39		4		—		57
Total sovereign debt/sovereign guaranteed	$	15,887		74	%	6	%	19	%	1	%	$	12,646		73	%	5	%	21	%	1	%
Foreign government agencies:
Germany	$	1,398		100	%	—	%	—	%	—	%	$	1,131		100	%	—	%	—	%	—	%
Netherlands	730			100		—		—		—		678			100		—		—		—
Canada	321			62		38		—		—		71			—		100		—		—
France	281			100		—		—		—		42			100		—		—		—
Sweden	276			100		—		—		—		202			100		—		—		—
Finland	241			100		—		—		—		245			100		—		—		—
Other	331			84		16		—		—		274			79		21		—		—
Total foreign government agencies	$	3,578		95	%	5	%	—	%	—	%	$	2,643		95	%	5	%	—	%	—	%

(a) Represents ratings by S&P or the equivalent.

(b) At June 30, 2020 and Dec. 31, 2019, sovereign debt/sovereign guaranteed securities were included in Level 1 and Level 2 in the valuation hierarchy. All other assets in the table are Level 2 assets in the valuation hierarchy.

(c) Includes $538 million at June 30, 2020 and $640 million at Dec. 31, 2019 that were included in the former Grantor Trust.

(d) Includes non-investment grade sovereign debt/sovereign guaranteed securities related to Brazil of $109 million at June 30, 2020 and $134 million at Dec. 31, 2019.

Assets Measured at Fair Value on Nonrecurring Basis

The following table presents the financial instruments carried on the consolidated balance sheet by caption and level in the fair value hierarchy as of June 30, 2020 and Dec. 31, 2019.

Assets measured at fair value on a nonrecurring basis	June 30, 2020								Dec. 31, 2019
							Total carrying value								Total carrying value
(in millions)	Level 1		Level 2		Level 3				Level 1		Level 2		Level 3
Loans (a)	$	—	$	53	$	—	$	53	$	—	$	58	$	—	$	58
Other assets (b)	—		107		—		107		—		64		—		64
Total assets at fair value on a nonrecurring basis	$	—	$	160	$	—	$	160	$	—	$	122	$	—	$	122

 

(a) The fair value of these loans decreased less than $1 million in the second quarter of 2020 and the fourth quarter of 2019, based on the fair value of the underlying collateral, as required by guidance in ASC 326, Financial Instruments – Credit Losses, with an offset to the allowance for credit losses.

(b)

Includes non-readily marketable equity securities carried at cost with upward or downward adjustments and other assets received in satisfaction of debt.

Summary of Financial Instruments Not Carried at Fair Value

The following tables present the estimated fair value and the carrying amount of financial instruments not carried at fair value on the consolidated balance sheet at June 30, 2020 and Dec. 31, 2019, by caption on the consolidated balance sheet and by the valuation hierarchy.

Summary of financial instruments	June 30, 2020
(in millions)	Level 1		Level 2		Level 3		Total estimated fair value		Carrying amount
Assets:
Interest-bearing deposits with the Federal Reserve and other central banks	$	—	$	112,728	$	—	$	112,728	$	112,728
Interest-bearing deposits with banks	—		18,063		—		18,063		18,045
Federal funds sold and securities purchased under resale agreements	—		36,638		—		36,638		36,638
Securities held-to-maturity	5,815		40,168		—		45,983		44,615
Loans (a)	—		54,377		—		54,377		54,067
Other financial assets	4,776		1,165		—		5,941		5,941
Total	$	10,591	$	263,139	$	—	$	273,730	$	272,034
Liabilities:
Noninterest-bearing deposits	$	—	$	78,100	$	—	$	78,100	$	78,100
Interest-bearing deposits	—		226,917		—		226,917		227,370
Federal funds purchased and securities sold under repurchase agreements	—		14,512		—		14,512		14,512
Payables to customers and broker-dealers	—		25,012		—		25,012		25,012
Commercial paper	—		665		—		665		665
Borrowings	—		1,852		—		1,852		1,852
Long-term debt	—		28,875		—		28,875		27,167
Total	$	—	$	375,933	$	—	$	375,933	$	374,678

(a) Does not include the leasing portfolio.

Summary of financial instruments	Dec. 31, 2019
(in millions)	Level 1		Level 2		Level 3		Total estimated fair value		Carrying amount
Assets:
Interest-bearing deposits with the Federal Reserve and other central banks	$	—	$	95,042	$	—	$	95,042	$	95,042
Interest-bearing deposits with banks	—		14,832		—		14,832		14,811
Federal funds sold and securities purchased under resale agreements	—		30,182		—		30,182		30,182
Securities held-to-maturity	4,630		30,175		—		34,805		34,483
Loans (a)	—		54,194		—		54,194		53,718
Other financial assets	4,830		1,233		—		6,063		6,063
Total	$	9,460	$	225,658	$	—	$	235,118	$	234,299
Liabilities:
Noninterest-bearing deposits	$	—	$	57,630	$	—	$	57,630	$	57,630
Interest-bearing deposits	—		200,846		—		200,846		201,836
Federal funds purchased and securities sold under repurchase agreements	—		11,401		—		11,401		11,401
Payables to customers and broker-dealers	—		18,758		—		18,758		18,758
Commercial paper	—		3,959		—		3,959		3,959
Borrowings	—		917		—		917		917
Long-term debt	—		27,858		—		27,858		27,114
Total	$	—	$	321,369	$	—	$	321,369	$	321,615

(a) Does not include the leasing portfolio.

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Fair value option (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Assets and Liabilities of Consolidated Investment Management Funds, at Fair Value

The following table presents the changes in fair value of long-term debt recorded in foreign exchange and other trading revenue in the consolidated income statement.

Change in fair value of long-term debt (a)
(in millions)	2Q20			1Q20			2Q19			YTD20			YTD19
Foreign exchange and other trading revenue	$	(2	)	$	(10	)	$	(7	)	$	(12	)	$	(12	)

(a)

The changes in fair value are approximately offset by an economic hedge included in foreign exchange and other trading revenue.

The following table presents the assets and liabilities of consolidated investment management funds, at fair value.

Assets and liabilities of consolidated investment management funds, at fair value
	June 30, 2020		Dec. 31, 2019
(in millions)
Assets of consolidated investment management funds:
Trading assets	$	450	$	229
Other assets	10		16
Total assets of consolidated investment management funds	$	460	$	245
Liabilities of consolidated investment management funds:
Other liabilities	4		1
Total liabilities of consolidated investment management funds	$	4	$	1

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Derivative instruments (Tables)

6 Months Ended

Jun. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Gains (Losses) Related to Hedging

The following table presents the pre-tax gains (losses) related to our fair value and cash flow hedging activities recognized in the consolidated income statement.

Income statement impact of fair value and cash flow hedges
(in millions)	Location of gains (losses)	2Q20			1Q20			2Q19			YTD20			YTD19
Interest rate fair value hedges of available-for-sale securities
Derivative	Interest revenue	$	19		$	(1,033	)	$	(486	)	$	(1,014	)	$	(869	)
Hedged item	Interest revenue	(15		)	1,011			480			996			856
Interest rate fair value hedges of long-term debt
Derivative	Interest expense	47			714			300			761			485
Hedged item	Interest expense	(49		)	(708		)	(298		)	(757		)	(482		)
Foreign exchange fair value hedges of available-for-sale securities
Derivative (a)	Other revenue	5			7			(5		)	12			1
Hedged item	Other revenue	(5		)	(7		)	5			(12		)	—
Cash flow hedges of forecasted FX exposures
(Loss) gain reclassified from OCI into income	Staff expense	(3		)	1			—			(2		)	(1		)
(Loss) recognized in the consolidated income statement due to fair value and cash flow hedging relationships		$	(1	)	$	(15	)	$	(4	)	$	(16	)	$	(10	)

(a) Includes gains of less than $1 million in the second quarter of 2020 and first quarter of 2020, a de minimis gain in the second quarter of 2019, a gain of less than $1 million in the first six months of 2020 and a gain of $1 million in the first six months of 2019 associated with the amortization of the excluded component. At June 30, 2020 and Dec. 31, 2019, the remaining accumulated OCI balance associated with the excluded component was de minimis.

Impacts of Hedging Derivatives in Net Investment Hedging Relationships

The following table presents the impact of hedging derivatives used in net investment hedging relationships.

Impact of derivative instruments used in net investment hedging relationships
(in millions)
Derivatives in net investment hedging relationships	Gain or (loss) recognized in accumulated OCI on derivatives											Location of gain or (loss) reclassified from accumulated OCI into income	Gain or (loss) reclassified from accumulated OCI into income
	2Q20			1Q20		2Q19		YTD20		YTD19			2Q20		1Q20		2Q19		YTD20		YTD19
FX contracts	$	(45	)	$	437	$	76	$	392	$	70	Net interest revenue	$	—	$	—	$	—	$	—	$	—

Summary of Hedged Items in Fair Value Hedging Relationships

The following table presents information on the hedged items in fair value hedging relationships.

Hedged items in fair value hedging relationships	Carrying amount of hedged asset or liability				Hedge accounting basis adjustment increase (decrease) (a)
(in millions)	June 30, 2020		Dec. 31, 2019		June 30, 2020		Dec. 31, 2019
Available-for-sale securities (b)(c)	$	13,952	$	13,792	$	1,817	$	687
Long-term debt	$	14,956	$	13,945	$	919	$	116

(a) Includes $196 million and $53 million of basis adjustment increases on discontinued hedges associated with available-for-sale securities at June 30, 2020 and Dec. 31, 2019, respectively, and $156 million and $200 million of basis adjustment decreases on discontinued hedges associated with long-term debt at June 30, 2020 and Dec. 31, 2019, respectively.

(b) Excludes hedged items where only foreign currency risk is the designated hedged risk, as the basis adjustments related to foreign currency hedges will not reverse through the consolidated income statement in future periods. The carrying amount excluded for available-for-sale securities was $131 million at June 30, 2020 and $142 million at Dec. 31, 2019.

(c)

Carrying amount represents the amortized cost.

Impact of Derivative Instruments on the Balance Sheet

The following table summarizes the notional amount and carrying values of our total derivative portfolio at June 30, 2020 and Dec. 31, 2019.

Impact of derivative instruments on the balance sheet	Notional value				Asset derivatives fair value						Liability derivatives fair value
	June 30, 2020		Dec. 31, 2019		June 30, 2020			Dec. 31, 2019			June 30, 2020			Dec. 31, 2019
(in millions)
Derivatives designated as hedging instruments: (a)(b)
Interest rate contracts	$	27,775	$	28,365	$	—		$	—		$	915		$	350
Foreign exchange contracts	8,040		8,390		137			21			49			257
Total derivatives designated as hedging instruments					$	137		$	21		$	964		$	607
Derivatives not designated as hedging instruments: (b)(c)
Interest rate contracts	$	217,613	$	306,790	$	5,501		$	3,690		$	4,668		$	3,250
Foreign exchange contracts	781,991		848,961		4,322			5,331			4,036			5,340
Equity contracts	1,657		3,189		13			19			22			5
Credit contracts	165		165		—			—			2			4
Total derivatives not designated as hedging instruments					$	9,836		$	9,040		$	8,728		$	8,599
Total derivatives fair value (d)					$	9,973		$	9,061		$	9,692		$	9,206
Effect of master netting agreements (e)					(5,640		)	(5,819		)	(5,817		)	(5,415		)
Fair value after effect of master netting agreements					$	4,333		$	3,242		$	3,875		$	3,791

(a) The fair value of asset derivatives and liability derivatives designated as hedging instruments is recorded as other assets and other liabilities, respectively, on the consolidated balance sheet.

(b) For derivative transactions settled at clearing organizations, cash collateral exchanged is deemed a settlement of the derivative each day. The settlement reduces the gross fair value of derivative assets and liabilities and results in a corresponding decrease in the effect of master netting agreements, with no impact to the consolidated balance sheet.

(c) The fair value of asset derivatives and liability derivatives not designated as hedging instruments is recorded as trading assets and trading liabilities, respectively, on the consolidated balance sheet.

(d) Fair values are on a gross basis, before consideration of master netting agreements, as required by ASC 815, Derivatives and Hedging.

(e)

Effect of master netting agreements includes cash collateral received and paid of $869 million and $1,046 million, respectively, at June 30, 2020, and $1,022 million and $618 million, respectively, at Dec. 31, 2019.

Revenue from Foreign Exchange and Other Trading

The following table presents our foreign exchange and other trading revenue.

Foreign exchange and other trading revenue
(in millions)	2Q20			1Q20		2Q19		YTD20		YTD19
Foreign exchange	$	174		$	253	$	150	$	427	$	310
Other trading (loss) revenue	(8		)	66		16		58		26
Total foreign exchange and other trading revenue	$	166		$	319	$	166	$	485	$	336

Fair Value of Derivative Contracts Falling under Early Termination Provisions that were in Net Liability Position

The following table shows the aggregate fair value of OTC derivative contracts in net liability positions that contained credit-risk contingent features and the value of collateral that has been posted.

	June 30, 2020		Dec. 31, 2019
(in millions)
Aggregate fair value of OTC derivatives in net liability positions (a)	$	5,951	$	3,442
Collateral posted	$	6,372	$	3,671

(a)

Before consideration of cash collateral.

The following table shows the fair value of contracts falling under early termination provisions that were in net liability positions for three key ratings triggers.

Potential close-out exposures (fair value) (a)
	June 30, 2020		Dec. 31, 2019
(in millions)
If The Bank of New York Mellon’s rating changed to: (b)
A3/A-	$	31	$	56
Baa2/BBB	$	558	$	608
Ba1/BB+	$	2,981	$	2,084

(a) The amounts represent potential total close-out values if The Bank of New York Mellon’s long-term issuer rating were to immediately drop to the indicated levels, and do not reflect collateral posted.

(b) Represents ratings by Moody’s/S&P.

Offsetting Assets

The following tables present derivative and financial instruments and their related offsets. There were no derivative instruments or financial instruments subject to a legally enforceable netting agreement for which we are not currently netting.

Offsetting of derivative assets and financial assets at June 30, 2020
	Gross assets recognized		Gross amounts offset in the balance sheet			Net assets recognized in the balance sheet		Gross amounts not offset in the balance sheet
(in millions)					(a)			Financial instruments		Cash collateral received		Net amount
Derivatives subject to netting arrangements:
Interest rate contracts	$	3,549	$	2,436		$	1,113	$	384	$	—	$	729
Foreign exchange contracts	4,026		3,204			822		7		—		815
Equity and other contracts	9		—			9		1		—		8
Total derivatives subject to netting arrangements	7,584		5,640			1,944		392		—		1,552
Total derivatives not subject to netting arrangements	2,389		—			2,389		—		—		2,389
Total derivatives	9,973		5,640			4,333		392		—		3,941
Reverse repurchase agreements	72,781		48,615		(b)	24,166		24,140		—		26
Securities borrowing	12,472		—			12,472		11,843		—		629
Total	$	95,226	$	54,255		$	40,971	$	36,375	$	—	$	4,596

(a) Includes the effect of netting agreements and net cash collateral received. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions.

(b) Offsetting of reverse repurchase agreements relates to our involvement in the Fixed Income Clearing Corporation (“FICC”), where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.

Offsetting of derivative assets and financial assets at Dec. 31, 2019
	Gross assets recognized		Gross amounts offset in the balance sheet			Net assets recognized in the balance sheet		Gross amounts not offset in the balance sheet
(in millions)					(a)			Financial instruments		Cash collateral received		Net amount
Derivatives subject to netting arrangements:
Interest rate contracts	$	2,394	$	1,792		$	602	$	207	$	—	$	395
Foreign exchange contracts	4,861		4,021			840		44		—		796
Equity and other contracts	9		6			3		—		—		3
Total derivatives subject to netting arrangements	7,264		5,819			1,445		251		—		1,194
Total derivatives not subject to netting arrangements	1,797		—			1,797		—		—		1,797
Total derivatives	9,061		5,819			3,242		251		—		2,991
Reverse repurchase agreements	112,355		93,794		(b)	18,561		18,554		—		7
Securities borrowing	11,621		—			11,621		11,278		—		343
Total	$	133,037	$	99,613		$	33,424	$	30,083	$	—	$	3,341

(a) Includes the effect of netting agreements and net cash collateral received. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions.

(b)

Offsetting of reverse repurchase agreements relates to our involvement in the FICC, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.

Offsetting Liabilities

Offsetting of derivative liabilities and financial liabilities at June 30, 2020						Net liabilities recognized in the balance sheet
	Gross liabilities recognized		Gross amounts offset in the balance sheet					Gross amounts not offset in the balance sheet
(in millions)					(a)			Financial instruments		Cash collateral pledged		Net amount
Derivatives subject to netting arrangements:
Interest rate contracts	$	5,563	$	2,680		$	2,883	$	2,849	$	—	$	34
Foreign exchange contracts	3,690		3,134			556		150		—		406
Equity and other contracts	22		3			19		—		—		19
Total derivatives subject to netting arrangements	9,275		5,817			3,458		2,999		—		459
Total derivatives not subject to netting arrangements	417		—			417		—		—		417
Total derivatives	9,692		5,817			3,875		2,999		—		876
Repurchase agreements	59,794		48,615		(b)	11,179		11,175		—		4
Securities lending	982		—			982		962		—		20
Total	$	70,468	$	54,432		$	16,036	$	15,136	$	—	$	900

(a) Includes the effect of netting agreements and net cash collateral paid. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions.

(b) Offsetting of repurchase agreements relates to our involvement in the FICC, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.

Offsetting of derivative liabilities and financial liabilities at Dec. 31, 2019						Net liabilities recognized in the balance sheet
	Gross liabilities recognized		Gross amounts offset in the balance sheet					Gross amounts not offset in the balance sheet
(in millions)					(a)			Financial instruments		Cash collateral pledged		Net amount
Derivatives subject to netting arrangements:
Interest rate contracts	$	3,550	$	1,986		$	1,564	$	1,539	$	—	$	25
Foreign exchange contracts	4,873		3,428			1,445		74		—		1,371
Equity and other contracts	5		1			4		2		—		2
Total derivatives subject to netting arrangements	8,428		5,415			3,013		1,615		—		1,398
Total derivatives not subject to netting arrangements	778		—			778		—		—		778
Total derivatives	9,206		5,415			3,791		1,615		—		2,176
Repurchase agreements	104,451		93,794		(b)	10,657		10,657		—		—
Securities lending	718		—			718		694		—		24
Total	$	114,375	$	99,209		$	15,166	$	12,966	$	—	$	2,200

(a) Includes the effect of netting agreements and net cash collateral paid. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions.

(b)

Offsetting of repurchase agreements relates to our involvement in the FICC, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system.

Transfer of Certain Financial Assets Accounted for as Secured Borrowings

The following table presents the contract value of repurchase agreements and securities lending transactions accounted for as secured borrowings by the type of collateral provided to counterparties.

Repurchase agreements and securities lending transactions accounted for as secured borrowings
	June 30, 2020								Dec. 31, 2019
	Remaining contractual maturity						Total		Remaining contractual maturity						Total
(in millions)	Overnight and continuous		Up to 30 days		30 days or more				Overnight and continuous		Up to 30 days		30 days or more
Repurchase agreements:
U.S. Treasury	$	52,950	$	300	$	109	$	53,359	$	94,788	$	10	$	—	$	94,798
U.S. government agencies	642		—		—		642		594		16		—		610
Agency RMBS	1,384		—		149		1,533		4,234		774		—		5,008
Corporate bonds	195		23		1,272		1,490		266		236		1,617		2,119
Other debt securities	93		79		1,749		1,921		40		188		1,079		1,307
Equity securities	—		98		751		849		31		99		479		609
Total	$	55,264	$	500	$	4,030	$	59,794	$	99,953	$	1,323	$	3,175	$	104,451
Securities lending:
U.S. government agencies	$	21	$	—	$	—	$	21	$	19	$	—	$	—	$	19
Other debt securities	191		—		—		191		201		—		—		201
Equity securities	770		—		—		770		498		—		—		498
Total	$	982	$	—	$	—	$	982	$	718	$	—	$	—	$	718
Total secured borrowings	$	56,246	$	500	$	4,030	$	60,776	$	100,671	$	1,323	$	3,175	$	105,169

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Commitments and contingent liabilities (Tables)

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Summary of Off-Balance Sheet Credit Risks, Net of Participations

The following table presents a summary of our off-balance sheet credit risks.

Off-balance sheet credit risks	June 30, 2020		Dec. 31, 2019
(in millions)
Lending commitments	$	49,147	$	49,119
Standby letters of credit (“SBLC”) (a)	2,291		2,298
Commercial letters of credit	59		74
Securities lending indemnifications (b)(c)	417,924		408,378

(a) Net of participations totaling $145 million at June 30, 2020 and $146 million at Dec. 31, 2019.

(b) Excludes the indemnification for securities for which BNY Mellon acts as an agent on behalf of CIBC Mellon clients, which totaled $58 billion at June 30, 2020 and $57 billion at Dec. 31, 2019.

(c)

Includes cash collateral, invested in indemnified repurchase agreements, held by us as securities lending agent of $40 billion at June 30, 2020 and $37 billion at Dec. 31, 2019.

Standby Letters of Credits by Investment Grade

The table below shows SBLCs by investment grade:

Standby letters of credit	June 30, 2020		Dec. 31, 2019
Investment grade	89	%	90	%
Non-investment grade	11	%	10	%

Summary of Credit Exposure in the Financial Institutions and Commercial Portfolios

The tables below present our credit exposure in the financial institutions and commercial portfolios.

Financial institutions portfolio exposure (in billions)	June 30, 2020
	Loans		Unfunded commitments		Total exposure
Securities industry	$	1.6	$	24.5	$	26.1
Banks	7.0		1.1		8.1
Asset managers	1.3		6.3		7.6
Insurance	0.1		2.7		2.8
Government	0.1		0.2		0.3
Other	0.7		0.7		1.4
Total	$	10.8	$	35.5	$	46.3

 

Commercial portfolio exposure (in billions)	June 30, 2020
	Loans		Unfunded commitments		Total exposure
Manufacturing	$	1.1	$	3.5	$	4.6
Services and other	1.1		3.3		4.4
Energy and utilities	0.1		4.1		4.2
Media and telecom	0.1		0.9		1.0
Total	$	2.4	$	11.8	$	14.2

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Lines of business (Tables)

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Contribution of Segments to Overall Profitability

The following consolidating schedules present the contribution of our businesses to our overall profitability.

For the quarter ended June 30, 2020	Investment Services			Investment and Wealth Management				Other			Consolidated
(dollars in millions)
Total fee and other revenue	$	2,339		$	838		(a)	$	38		$	3,215		(a)
Net interest revenue (expense)	768			48				(36		)	780
Total revenue	3,107			886			(a)	2			3,995			(a)
Provision for credit losses	145			7				(9		)	143
Noninterest expense	1,989			658				39			2,686
Income (loss) before income taxes	$	973		$	221		(a)	$	(28	)	$	1,166		(a)
Pre-tax operating margin (b)	31		%	25		%		N/M			29		%
Average assets	$	335,288		$	30,327			$	49,744		$	415,359

(a) Total fee and other revenue includes net income from consolidated investment management funds of $39 million, representing $54 million of income and noncontrolling interests of $15 million. Total revenue and income before income taxes are net of noncontrolling interests of $15 million.

(b) Income before income taxes divided by total revenue.

N/M - Not meaningful.

For the quarter ended March 31, 2020	Investment Services			Investment and Wealth Management				Other			Consolidated
(dollars in millions)
Total fee and other revenue	$	2,436		$	846		(a)	$	30		$	3,312		(a)
Net interest revenue (expense)	806			52				(44		)	814
Total revenue (loss)	3,242			898			(a)	(14		)	4,126			(a)
Provision for credit losses	149			9				11			169
Noninterest expense	1,987			695				30			2,712
Income (loss) before income taxes	$	1,106		$	194		(a)	$	(55	)	$	1,245		(a)
Pre-tax operating margin (b)	34		%	22		%		N/M			30		%
Average assets	$	304,089		$	30,543			$	50,646		$	385,278

(a) Total fee and other revenue includes net loss from consolidated investment management funds of $20 million, representing $38 million of losses and a loss attributable to noncontrolling interests of $18 million. Total revenue and income before income taxes are net of a loss attributable to noncontrolling interests of $18 million.

(b) Income before income taxes divided by total revenue.

N/M - Not meaningful.

For the quarter ended June 30, 2019	Investment Services			Investment and Wealth Management				Other			Consolidated
(dollars in millions)
Total fee and other revenue	$	2,233		$	854		(a)	$	31		$	3,118		(a)
Net interest revenue (expense)	783			59				(40		)	802
Total revenue (loss)	3,016			913			(a)	(9		)	3,920			(a)
Provision for credit losses	(4		)	(2		)		(2		)	(8		)
Noninterest expense	1,963			655				29			2,647
Income (loss) before income taxes	$	1,057		$	260		(a)	$	(36	)	$	1,281		(a)
Pre-tax operating margin (b)	35		%	29		%		N/M			33		%
Average assets	$	264,781		$	29,793			$	47,810		$	342,384

(a) Total fee and other revenue includes net income from consolidated investment management funds of $6 million, representing $10 million of income and noncontrolling interests of $4 million. Total revenue and income before income taxes are net of noncontrolling interests of $4 million.

(b) Income before income taxes divided by total revenue.

N/M - Not meaningful.

For the six months ended June 30, 2020	Investment Services			Investment and Wealth Management				Other			Consolidated
(dollars in millions)
Total fee and other revenue	$	4,775		$	1,684		(a)	$	68		$	6,527		(a)
Net interest revenue (expense)	1,574			100				(80		)	1,594
Total revenue (loss)	6,349			1,784			(a)	(12		)	8,121			(a)
Provision for credit losses	294			16				2			312
Noninterest expense	3,976			1,353				69			5,398
Income (loss) before income taxes	$	2,079		$	415		(a)	$	(83	)	$	2,411		(a)
Pre-tax operating margin (b)	33		%	23		%		N/M			30		%
Average assets	$	319,689		$	30,435			$	50,194		$	400,318

(a) Total fee and other revenue includes net income from consolidated investment management funds of $19 million, representing $16 million of income and a loss attributable to noncontrolling interests of $3 million. Total revenue and income before income taxes are net of a loss attributable to noncontrolling interests of $3 million.

(b) Income before income taxes divided by total revenue.

N/M - Not meaningful.

For the six months ended June 30, 2019	Investment Services			Investment and Wealth Management				Other			Consolidated
(dollars in millions)
Total fee and other revenue	$	4,394		$	1,723		(a)	$	49		$	6,166		(a)
Net interest revenue (expense)	1,587			126				(70		)	1,643
Total revenue (loss)	5,981			1,849			(a)	(21		)	7,809			(a)
Provision for credit losses	4			(1		)		(4		)	(1		)
Noninterest expense	3,944			1,324				78			5,346
Income (loss) before income taxes	$	2,033		$	526		(a)	$	(95	)	$	2,464		(a)
Pre-tax operating margin (b)	34		%	28		%		N/M			32		%
Average assets	$	260,432		$	30,819			$	48,041		$	339,292

(a) Total fee and other revenue includes net income from consolidated investment management funds of $22 million, representing $36 million of income and noncontrolling interests of $14 million. Total revenue and income before income taxes are net of noncontrolling interests of $14 million.

(b) Income before income taxes divided by total revenue.

N/M - Not meaningful.

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Supplemental information to the Consolidated Statement of Cash Flows (Tables)

6 Months Ended

Jun. 30, 2020

Supplemental Cash Flow Information [Abstract]

Noncash Investing and Financing Transactions that are Not Reflected in Consolidated Statement of Cash Flows

Non-cash investing and financing transactions that, appropriately, are not reflected in the consolidated statement of cash flows are listed below.

Non-cash investing and financing transactions	Six months ended June 30,
(in millions)	2020		2019
Change in assets of consolidated investment management funds	$	215	$	76
Change in liabilities of consolidated investment management funds	3		4
Change in nonredeemable noncontrolling interests of consolidated investment management funds	10		65
Securities purchased not settled	1,730		1,113
Securities matured not settled	—		10
Premises and equipment/capitalized software funded by finance lease obligations	—		14
Premises and equipment/operating lease obligations	66		1,272		(a)
Investment redemptions not settled	—		—

 

(a)

Includes $1,244 million related to the adoption of ASU 2016-02, Leases, and $28 million related to new or modified leases.

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Accounting changes and new accounting guidance - Narrative (Details) - USD ($)	6 Months Ended				12 Months Ended
	Jun. 30, 2020		Jun. 30, 2019		Dec. 31, 2019		Dec. 31, 2018		Mar. 31, 2020		Jan. 01, 2020	Mar. 31, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201613Member		us-gaap:AccountingStandardsUpdate201602Member		us-gaap:AccountingStandardsUpdate201613Member		us-gaap:AccountingStandardsUpdate201802Member
Adjustment for the cumulative effect of applying the ASU	$ 43,809,000,000	[1],[2]	$ 41,699,000,000	[3],[4]	$ 41,585,000,000	[2],[5]	$ 40,739,000,000	[4]	$ 41,239,000,000	[1],[5]		$ 41,347,000,000	[3]
Minimum loan amount required to measure impairment allowance	1,000,000
Retained earnings
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Adjustment for the cumulative effect of applying the ASU	$ 33,224,000,000		$ 30,081,000,000		31,894,000,000		28,652,000,000		$ 32,601,000,000			$ 29,382,000,000
Commercial Loan
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Threshold period past due for nonaccrual status	90 days
First Lien Residential Mortgage
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Threshold period past due subject to impairment test	90 days
Second Lien Residential Mortgage
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Threshold period past due subject to further impairment testing	90 days
Cumulative Effect, Period Of Adoption, Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Adjustment for the cumulative effect of applying the ASU					40,000,000		0
Cumulative Effect, Period Of Adoption, Adjustment | Retained earnings
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Adjustment for the cumulative effect of applying the ASU					$ 45,000,000		$ 90,000,000				$ 45,000,000

[1] Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,603 million at March 31, 2020 and $39,165 million at June 30, 2020.

[2] Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,941 million at Dec. 31, 2019 and $39,165 million at June 30, 2020.

[3] Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,683 million at March 31, 2019 and $37,991 million at June 30, 2019.

[4] Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,096 million at Dec. 31, 2018 and $37,991 million at June 30, 2019.

[5] Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,941 million at Dec. 31, 2019 and $37,603 million at March 31, 2020.

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Accounting changes and new accounting guidance - Allowance for Credit Losses (Details) - USD ($) $ in Millions	Jun. 30, 2020	Mar. 31, 2020	Jan. 01, 2020	Dec. 31, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses, loans	$ 454	$ 288		$ 216	$ 241	$ 248	$ 252
Securities	12
Allowance for credit losses			$ 161
Reclassification of credit-related reserves on accounts receivable			4
Cumulative Effect, Period Of Adoption, Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses, loans			(69)	$ (69)
Securities			7
Other			3
Allowance for credit losses			(59)
Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses, loans	302	140	48		146
Lending-related commitments
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses, loans	$ 152	$ 148	$ 21		$ 95

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Acquisitions and dispositions - Narrative (Details) - USD ($) $ in Millions		3 Months Ended	6 Months Ended
	Nov. 08, 2019	Jun. 30, 2020	Jun. 30, 2020
Business Acquisition [Line Items]
Contingent payments		$ 3	$ 3
Potential obligation to pay additional consideration, lower range		5	5
Potential obligation to pay additional consideration, upper range		$ 10	$ 10
Contingent consideration payment period			2 years
Promontory Interfinancial Network
Business Acquisition [Line Items]
Gain on disposal	$ 622

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Securities - Amortized Cost, Gross Unrealized Gains and Losses and Fair Value (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Available-for-sale:
Amortized cost	$ 106,668	$ 87,435
Gross unrealized, Gain	3,634	1,353
Gross unrealized, Loss	235	238
Available-for-sale	110,067	88,550
Held-to-maturity:
Amortized cost	44,615	34,483
Gross unrealized, Gains	1,383	377
Gross unrealized, Losses	15	55
Securities held-to-maturity	45,983	34,805
Amortized cost, Total	151,283	121,918
Gross unrealized, Gain, Total	5,017	1,730
Gross unrealized, Losses, Total	250	293
Fair value, Total	156,050	123,355
Debt securities, available-for-sale, allowance for credit loss	12
AOCI, transfers from AFS to HTM Securities, gross unrealized gains	28	32
AOCI, transfers from AFS to HTM Securities, gross unrealized losses	55	65
Agency RMBS
Available-for-sale:
Amortized cost	26,005	27,022
Gross unrealized, Gain	516	164
Gross unrealized, Loss	84	143
Available-for-sale	26,437	27,043
Held-to-maturity:
Amortized cost	32,869	27,357
Gross unrealized, Gains	1,108	292
Gross unrealized, Losses	9	46
Securities held-to-maturity	33,968	27,603
U.S. Treasury
Available-for-sale:
Amortized cost	23,537	14,979
Gross unrealized, Gain	1,600	472
Gross unrealized, Loss	0	20
Available-for-sale	25,137	15,431
Held-to-maturity:
Amortized cost	4,687	3,818
Gross unrealized, Gains	114	28
Gross unrealized, Losses	1	3
Securities held-to-maturity	4,800	3,843
Sovereign debt/sovereign guaranteed
Available-for-sale:
Amortized cost	15,724	12,548
Gross unrealized, Gain	165	109
Gross unrealized, Loss	2	11
Available-for-sale	15,887	12,646
Held-to-maturity:
Amortized cost	974	756
Gross unrealized, Gains	41	31
Gross unrealized, Losses	0	0
Securities held-to-maturity	1,015	787
Agency commercial mortgage-backed securities (“MBS”)
Available-for-sale:
Amortized cost	9,357	9,231
Gross unrealized, Gain	633	203
Gross unrealized, Loss	2	17
Available-for-sale	9,988	9,417
Held-to-maturity:
Amortized cost	1,982	1,326
Gross unrealized, Gains	108	21
Gross unrealized, Losses	0	3
Securities held-to-maturity	2,090	1,344
Foreign covered bonds
Available-for-sale:
Amortized cost	5,469	4,189
Gross unrealized, Gain	53	15
Gross unrealized, Loss	3	7
Available-for-sale	5,519	4,197
Held-to-maturity:
Amortized cost	79	79
Gross unrealized, Gains	0	0
Gross unrealized, Losses	0	0
Securities held-to-maturity	79	79
Supranational
Available-for-sale:
Amortized cost	5,385	3,697
Gross unrealized, Gain	64	18
Gross unrealized, Loss	1	6
Available-for-sale	5,448	3,709
Held-to-maturity:
Amortized cost	49	27
Gross unrealized, Gains	0	0
Gross unrealized, Losses	0	0
Securities held-to-maturity	49	27
Collateralized loan obligations (“CLOs”)
Available-for-sale:
Amortized cost	4,526	4,078
Gross unrealized, Gain	4	1
Gross unrealized, Loss	98	16
Available-for-sale	4,432	4,063
Foreign government agencies
Available-for-sale:
Amortized cost	3,536	2,638
Gross unrealized, Gain	42	7
Gross unrealized, Loss	0	2
Available-for-sale	3,578	2,643
U.S. government agencies
Available-for-sale:
Amortized cost	2,635	1,890
Gross unrealized, Gain	173	61
Gross unrealized, Loss	2	2
Available-for-sale	2,806	1,949
Held-to-maturity:
Amortized cost	2,349	1,023
Gross unrealized, Gains	6	1
Gross unrealized, Losses	3	2
Securities held-to-maturity	2,352	1,022
Other ABS
Available-for-sale:
Amortized cost	2,724	2,141
Gross unrealized, Gain	29	7
Gross unrealized, Loss	10	5
Available-for-sale	2,743	2,143
Non-agency commercial MBS
Available-for-sale:
Amortized cost	2,517	2,134
Gross unrealized, Gain	129	46
Gross unrealized, Loss	16	2
Available-for-sale	2,630	2,178
Commercial paper/certificates of deposit (“CDs”)
Available-for-sale:
Amortized cost	1,849
Gross unrealized, Gain	4
Gross unrealized, Loss	0
Available-for-sale	1,853
Held-to-maturity:
Amortized cost	1,537
Gross unrealized, Gains	2
Gross unrealized, Losses	0
Securities held-to-maturity	1,539
Non-agency RMBS
Available-for-sale:
Amortized cost	1,464	1,038
Gross unrealized, Gain	149	202
Gross unrealized, Loss	15	7
Available-for-sale	1,598	1,233
Held-to-maturity:
Amortized cost	73	80
Gross unrealized, Gains	3	4
Gross unrealized, Losses	2	1
Securities held-to-maturity	74	83
Non-agency RMBS | Grantor Trust
Available-for-sale:
Available-for-sale	538	640
State and political subdivisions
Available-for-sale:
Amortized cost	1,150	1,017
Gross unrealized, Gain	31	27
Gross unrealized, Loss	2	0
Available-for-sale	1,179	1,044
Held-to-maturity:
Amortized cost	16	17
Gross unrealized, Gains	1	0
Gross unrealized, Losses	0	0
Securities held-to-maturity	17	17
Corporate bonds
Available-for-sale:
Amortized cost	789	832
Gross unrealized, Gain	42	21
Gross unrealized, Loss	0	0
Available-for-sale	831	853
Other debt securities
Available-for-sale:
Amortized cost	1	1
Gross unrealized, Gain	0	0
Gross unrealized, Loss	0	0
Available-for-sale	$ 1	$ 1

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Securities - Net Securities Gains (Losses) (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Securities [Abstract]
Realized gross gains	$ 16	$ 12	$ 12	$ 28	$ 17
Realized gross losses	(7)	(3)	(5)	(10)	(9)
Recognized gross impairments	0	0	0	0	0
Total net securities gains	$ 9	$ 9	$ 7	$ 18	$ 8

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Securities - Pre-Tax Net Securities Gains (Losses) by Type (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Total net securities gains (losses)	$ 9	$ 9	$ 7	$ 18	$ 8
Supranational
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Total net securities gains (losses)	6	0	0	6	0
U.S. Treasury
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Total net securities gains (losses)	1	5	3	6	4
Other
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Total net securities gains (losses)	$ 2	$ 4	$ 4	$ 6	$ 4

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Securities - Narrative (Details) - USD ($) $ in Millions			6 Months Ended		12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019	Dec. 31, 2018	Jan. 01, 2020
Debt Securities, Available-for-sale [Line Items]
Accounting Standards Update [Extensible List]			us-gaap:AccountingStandardsUpdate201613Member	us-gaap:AccountingStandardsUpdate201602Member	us-gaap:AccountingStandardsUpdate201613Member	us-gaap:AccountingStandardsUpdate201802Member
Debt securities, available-for-sale, allowance for credit loss	$ 12		$ 12
AOCI, transfers from AFS to HTM Securities, gross unrealized losses	$ 55	$ 65
Cumulative Effect, Period Of Adoption, Adjustment
Debt Securities, Available-for-sale [Line Items]
Debt securities, available-for-sale, allowance for credit loss							$ 7

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Securities - Fair Value of Investments with Continuous Unrealized Loss Position (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Available-for-sale:
Less than 12 months, Fair value	$ 12,385,000,000	$ 23,012,000,000
Less than 12 months, Unrealized losses	110,000,000	92,000,000
12 months or more, Fair value	7,919,000,000	10,774,000,000
12 months or more, Unrealized losses	113,000,000	146,000,000
Total, Fair value	20,304,000,000	33,786,000,000
Total, Unrealized losses	223,000,000	238,000,000
AOCI, transfers from AFS to HTM Securities, gross unrealized losses, greater than 12 months	55,000,000	65,000,000
AOCI, transfers from AFS to HTM Securities, gross unrealized losses, less than 12 months	0	0
Grantor Trust
Available-for-sale:
Less than 12 months, Fair value	530,000,000
Agency RMBS
Available-for-sale:
Less than 12 months, Fair value	2,809,000,000	8,373,000,000
Less than 12 months, Unrealized losses	5,000,000	33,000,000
12 months or more, Fair value	6,030,000,000	5,912,000,000
12 months or more, Unrealized losses	79,000,000	110,000,000
Total, Fair value	8,839,000,000	14,285,000,000
Total, Unrealized losses	84,000,000	143,000,000
U.S. Treasury
Available-for-sale:
Less than 12 months, Fair value		1,976,000,000
Less than 12 months, Unrealized losses		16,000,000
12 months or more, Fair value		766,000,000
12 months or more, Unrealized losses		4,000,000
Total, Fair value		2,742,000,000
Total, Unrealized losses		20,000,000
Sovereign debt/sovereign guaranteed
Available-for-sale:
Less than 12 months, Fair value	1,952,000,000	4,045,000,000
Less than 12 months, Unrealized losses	2,000,000	10,000,000
12 months or more, Fair value	110,000,000	225,000,000
12 months or more, Unrealized losses	0	1,000,000
Total, Fair value	2,062,000,000	4,270,000,000
Total, Unrealized losses	2,000,000	11,000,000
Agency commercial mortgage-backed securities (“MBS”)
Available-for-sale:
Less than 12 months, Fair value	266,000,000	1,960,000,000
Less than 12 months, Unrealized losses	0	12,000,000
12 months or more, Fair value	350,000,000	775,000,000
12 months or more, Unrealized losses	2,000,000	5,000,000
Total, Fair value	616,000,000	2,735,000,000
Total, Unrealized losses	2,000,000	17,000,000
Foreign covered bonds
Available-for-sale:
Less than 12 months, Fair value	1,003,000,000	1,009,000,000
Less than 12 months, Unrealized losses	2,000,000	4,000,000
12 months or more, Fair value	281,000,000	690,000,000
12 months or more, Unrealized losses	1,000,000	3,000,000
Total, Fair value	1,284,000,000	1,699,000,000
Total, Unrealized losses	3,000,000	7,000,000
Supranational
Available-for-sale:
Less than 12 months, Fair value	931,000,000	1,336,000,000
Less than 12 months, Unrealized losses	1,000,000	6,000,000
12 months or more, Fair value	233,000,000	360,000,000
12 months or more, Unrealized losses	0	0
Total, Fair value	1,164,000,000	1,696,000,000
Total, Unrealized losses	1,000,000	6,000,000
Collateralized loan obligations (“CLOs”)
Available-for-sale:
Less than 12 months, Fair value	3,522,000,000	1,066,000,000
Less than 12 months, Unrealized losses	68,000,000	2,000,000
12 months or more, Fair value	575,000,000	1,499,000,000
12 months or more, Unrealized losses	19,000,000	14,000,000
Total, Fair value	4,097,000,000	2,565,000,000
Total, Unrealized losses	87,000,000	16,000,000
Foreign government agencies
Available-for-sale:
Less than 12 months, Fair value		1,706,000,000
Less than 12 months, Unrealized losses		2,000,000
12 months or more, Fair value		47,000,000
12 months or more, Unrealized losses		0
Total, Fair value		1,753,000,000
Total, Unrealized losses		2,000,000
U.S. government agencies
Available-for-sale:
Less than 12 months, Fair value	79,000,000	377,000,000
Less than 12 months, Unrealized losses	2,000,000	2,000,000
12 months or more, Fair value	0	0
12 months or more, Unrealized losses	0	0
Total, Fair value	79,000,000	377,000,000
Total, Unrealized losses	2,000,000	2,000,000
Other ABS
Available-for-sale:
Less than 12 months, Fair value	760,000,000	456,000,000
Less than 12 months, Unrealized losses	6,000,000	3,000,000
12 months or more, Fair value	203,000,000	305,000,000
12 months or more, Unrealized losses	4,000,000	2,000,000
Total, Fair value	963,000,000	761,000,000
Total, Unrealized losses	10,000,000	5,000,000
Non-agency commercial MBS
Available-for-sale:
Less than 12 months, Fair value	476,000,000	525,000,000
Less than 12 months, Unrealized losses	15,000,000	2,000,000
12 months or more, Fair value	39,000,000	45,000,000
12 months or more, Unrealized losses	1,000,000	0
Total, Fair value	515,000,000	570,000,000
Total, Unrealized losses	16,000,000	2,000,000
Non-agency RMBS
Available-for-sale:
Less than 12 months, Fair value	508,000,000	101,000,000
Less than 12 months, Unrealized losses	7,000,000	0
12 months or more, Fair value	96,000,000	113,000,000
12 months or more, Unrealized losses	7,000,000	7,000,000
Total, Fair value	604,000,000	214,000,000
Total, Unrealized losses	14,000,000	7,000,000
Non-agency RMBS | Grantor Trust
Available-for-sale:
Less than 12 months, Fair value	42,000,000	2,000,000
Less than 12 months, Unrealized losses	1,000,000	1,000,000
12 months or more, Fair value	1,000,000	2,000,000
12 months or more, Unrealized losses	1,000,000	1,000,000
State and political subdivisions
Available-for-sale:
Less than 12 months, Fair value	79,000,000	0
Less than 12 months, Unrealized losses	2,000,000	0
12 months or more, Fair value	2,000,000	16,000,000
12 months or more, Unrealized losses	0	0
Total, Fair value	81,000,000	16,000,000
Total, Unrealized losses	$ 2,000,000	0
Corporate bonds
Available-for-sale:
Less than 12 months, Fair value		82,000,000
Less than 12 months, Unrealized losses		0
12 months or more, Fair value		21,000,000
12 months or more, Unrealized losses		0
Total, Fair value		103,000,000
Total, Unrealized losses		$ 0

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Securities - Debt Securities, Held-to-maturity, Credit Quality Indicator (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost	$ 44,615	$ 34,483
Unrealized gain (loss)	$ 1,368
Ratings (percent)	0.00%
Agency RMBS
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost	$ 32,869	27,357
Unrealized gain (loss)	$ 1,099
Ratings (percent)	0.00%
U.S. Treasury
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost	$ 4,687	3,818
Unrealized gain (loss)	$ 113
Ratings (percent)	0.00%
U.S. government agencies
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost	$ 2,349	1,023
Unrealized gain (loss)	$ 3
Ratings (percent)	0.00%
Agency commercial mortgage-backed securities (“MBS”)
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost	$ 1,982	1,326
Unrealized gain (loss)	$ 108
Ratings (percent)	0.00%
Commercial paper/certificates of deposit (“CDs”)
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost	$ 1,537
Unrealized gain (loss)	$ 2
Ratings (percent)	0.00%
Sovereign debt/sovereign guaranteed
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost	$ 974	756
Unrealized gain (loss)	$ 41
Ratings (percent)	0.00%
Foreign covered bonds
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost	$ 79	79
Unrealized gain (loss)	$ 0
Ratings (percent)	0.00%
Non-agency RMBS
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost	$ 73	80
Unrealized gain (loss)	$ 1
Ratings (percent)	1.00%
Supranational
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost	$ 49	27
Unrealized gain (loss)	$ 0
Ratings (percent)	0.00%
State and political subdivisions
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost	$ 16	$ 17
Unrealized gain (loss)	$ 1
Ratings (percent)	86.00%
AAA/ AA-
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	96.00%
AAA/ AA- | Agency RMBS
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	100.00%
AAA/ AA- | U.S. Treasury
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	100.00%
AAA/ AA- | U.S. government agencies
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	100.00%
AAA/ AA- | Agency commercial mortgage-backed securities (“MBS”)
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	100.00%
AAA/ AA- | Commercial paper/certificates of deposit (“CDs”)
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
AAA/ AA- | Sovereign debt/sovereign guaranteed
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	100.00%
AAA/ AA- | Foreign covered bonds
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	100.00%
AAA/ AA- | Non-agency RMBS
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	42.00%
AAA/ AA- | Supranational
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	100.00%
AAA/ AA- | State and political subdivisions
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	6.00%
A/ A-
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	1.00%
A/ A- | Agency RMBS
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
A/ A- | U.S. Treasury
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
A/ A- | U.S. government agencies
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
A/ A- | Agency commercial mortgage-backed securities (“MBS”)
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
A/ A- | Commercial paper/certificates of deposit (“CDs”)
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
A/ A- | Sovereign debt/sovereign guaranteed
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
A/ A- | Foreign covered bonds
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
A/ A- | Non-agency RMBS
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	43.00%
A/ A- | Supranational
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
A/ A- | State and political subdivisions
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	2.00%
BBB/ BBB-
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
BBB/ BBB- | Agency RMBS
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
BBB/ BBB- | U.S. Treasury
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
BBB/ BBB- | U.S. government agencies
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
BBB/ BBB- | Agency commercial mortgage-backed securities (“MBS”)
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
BBB/ BBB- | Commercial paper/certificates of deposit (“CDs”)
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
BBB/ BBB- | Sovereign debt/sovereign guaranteed
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
BBB/ BBB- | Foreign covered bonds
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
BBB/ BBB- | Non-agency RMBS
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	2.00%
BBB/ BBB- | Supranational
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
BBB/ BBB- | State and political subdivisions
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	6.00%
BB and lower
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
BB and lower | Agency RMBS
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
BB and lower | U.S. Treasury
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
BB and lower | U.S. government agencies
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
BB and lower | Agency commercial mortgage-backed securities (“MBS”)
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
BB and lower | Commercial paper/certificates of deposit (“CDs”)
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
BB and lower | Sovereign debt/sovereign guaranteed
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
BB and lower | Foreign covered bonds
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
BB and lower | Non-agency RMBS
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	12.00%
BB and lower | Supranational
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
BB and lower | State and political subdivisions
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
A1/A2/SP-1
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	3.00%
A1/A2/SP-1 | Agency RMBS
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
A1/A2/SP-1 | U.S. Treasury
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
A1/A2/SP-1 | U.S. government agencies
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
A1/A2/SP-1 | Agency commercial mortgage-backed securities (“MBS”)
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
A1/A2/SP-1 | Commercial paper/certificates of deposit (“CDs”)
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	100.00%
A1/A2/SP-1 | Sovereign debt/sovereign guaranteed
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
A1/A2/SP-1 | Foreign covered bonds
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
A1/A2/SP-1 | Non-agency RMBS
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
A1/A2/SP-1 | Supranational
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%
A1/A2/SP-1 | State and political subdivisions
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Ratings (percent)	0.00%

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Securities - Maturity Distribution and Yield of Investment Securities Portfolio (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Securities available-for-sale, Amount:
One year or less	$ 19,377
Over 1 through 5 years	28,132
Over 5 through 10 years	10,739
Over 10 years	3,991
Total	110,067	$ 88,550
Securities held-to-maturity, Amount:
One year or less	3,545
Over 1 through 5 years	5,406
Over 5 through 10 years	243
Over 10 years	497
Amortized cost	44,615	34,483
Mortgage-backed securities
Securities available-for-sale, Amount:
Without single maturity date	40,653
Securities held-to-maturity, Amount:
Mortgage-backed securities	34,924
Asset-backed securities
Securities available-for-sale, Amount:
Without single maturity date	7,175
U.S. Treasury
Securities available-for-sale, Amount:
One year or less	5,348
Over 1 through 5 years	10,350
Over 5 through 10 years	6,171
Over 10 years	3,268
Total	$ 25,137	15,431
Securities available-for-sale (Yield):
One year or less	0.50%
Over 1 through 5 years	1.52%
Over 5 through 10 years	1.67%
Over 10 years	3.11%
Total	1.54%
Securities held-to-maturity, Amount:
One year or less	$ 1,899
Over 1 through 5 years	2,788
Over 5 through 10 years	0
Over 10 years	0
Amortized cost	$ 4,687	3,818
Securities held-to-maturity (Yield):
One year or less	0.41%
Over 1 through 5 years	1.91%
Over 5 through 10 years	0.00%
Over 10 years	0.00%
Total	1.32%
U.S. government agencies
Securities available-for-sale, Amount:
One year or less	$ 25
Over 1 through 5 years	1,038
Over 5 through 10 years	1,623
Over 10 years	120
Total	$ 2,806	1,949
Securities available-for-sale (Yield):
One year or less	2.55%
Over 1 through 5 years	1.22%
Over 5 through 10 years	2.56%
Over 10 years	2.06%
Total	2.04%
Securities held-to-maturity, Amount:
One year or less	$ 0
Over 1 through 5 years	1,696
Over 5 through 10 years	212
Over 10 years	441
Amortized cost	$ 2,349	1,023
Securities held-to-maturity (Yield):
One year or less	0.00%
Over 1 through 5 years	1.12%
Over 5 through 10 years	1.98%
Over 10 years	2.33%
Total	1.42%
State and political subdivisions
Securities available-for-sale, Amount:
One year or less	$ 178
Over 1 through 5 years	646
Over 5 through 10 years	107
Over 10 years	248
Total	$ 1,179	1,044
Securities available-for-sale (Yield):
One year or less	2.92%
Over 1 through 5 years	3.29%
Over 5 through 10 years	2.42%
Over 10 years	2.37%
Total	2.96%
Securities held-to-maturity, Amount:
One year or less	$ 0
Over 1 through 5 years	3
Over 5 through 10 years	0
Over 10 years	13
Amortized cost	$ 16	$ 17
Securities held-to-maturity (Yield):
One year or less	0.00%
Over 1 through 5 years	5.66%
Over 5 through 10 years	0.00%
Over 10 years	4.76%
Total	4.91%
Other bonds, notes and debentures
Securities available-for-sale, Amount:
One year or less	$ 13,826
Over 1 through 5 years	16,098
Over 5 through 10 years	2,838
Over 10 years	355
Total	$ 33,117
Securities available-for-sale (Yield):
One year or less	0.71%
Over 1 through 5 years	0.68%
Over 5 through 10 years	0.53%
Over 10 years	0.97%
Total	0.69%
Securities held-to-maturity, Amount:
One year or less	$ 1,646
Over 1 through 5 years	919
Over 5 through 10 years	31
Over 10 years	43
Amortized cost	$ 2,639
Securities held-to-maturity (Yield):
One year or less	1.21%
Over 1 through 5 years	0.66%
Over 5 through 10 years	0.92%
Over 10 years	0.35%
Total	1.00%
Mortgage/ asset-backed
Securities available-for-sale, Amount:
Total	$ 47,828
Securities available-for-sale (Yield):
Total	2.23%
Securities held-to-maturity, Amount:
Amortized cost	$ 34,924
Securities held-to-maturity (Yield):
Total	2.87%
Mortgage/ asset-backed | Mortgage-backed securities
Securities available-for-sale, Amount:
Without single maturity date	$ 40,653
Securities available-for-sale (Yield):
Without single maturity date	2.24%
Securities held-to-maturity, Amount:
Mortgage-backed securities	$ 34,924
Securities held-to-maturity (Yield):
Without single maturity date	2.87%
Mortgage/ asset-backed | Asset-backed securities
Securities available-for-sale, Amount:
Without single maturity date	$ 7,175
Securities available-for-sale (Yield):
Without single maturity date	2.18%

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Securities - Pledged assets (Details) - USD ($) $ in Billions	Jun. 30, 2020	Dec. 31, 2019
Securities [Abstract]
Pledged assets	$ 139.0	$ 118.0
Pledged collateral for potential borrowings at the Federal Reserve Discount Window	109.0	80.0
Pledged asset, other not separately reported, potential borrowings at FHLB	6.0	6.0
Pledged securities	121.0	98.0
Pledged loans	12.0	13.0
Pledged trading assets	5.0	7.0
Pledged interest-bearing deposits	1.0	1.0
Financial instruments owned and pledged as collateral, amount eligible to be pledged by counterparty	21.0	29.0
Pledged collateral for potential borrowings at the Federal Reserve	1.5
Pledged assets permitted to be sold or repledged	107.0	153.0
Market value of securities received as collateral that have been sold or repledged	72.0	107.0
Cash segregated under federal or other regulations	2.0	2.0
Securities segregated under federal or other regulations	$ 6.0	$ 1.0

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Loans and asset quality - Loan Distribution and Industry Concentrations (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 55,397	$ 54,953
Unearned income on lease financings	292	313
Other residential mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	450	494
Overdrafts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans		2,700
Margin loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	12,900	13,400
Domestic
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	42,893	42,548
Domestic | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	2,192	1,442
Domestic | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	6,217	5,575
Domestic | Financial institutions
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	3,804	4,852
Domestic | Lease financings
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	439	537
Domestic | Wealth management loans and mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	15,753	16,050
Domestic | Other residential mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	450	494
Domestic | Overdrafts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	1,073	524
Domestic | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	1,489	1,167
Domestic | Margin loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	11,476	11,907
Foreign
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	12,504	12,405
Foreign | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	253	347
Foreign | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	11	7
Foreign | Financial institutions
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	6,949	7,626
Foreign | Lease financings
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	589	576
Foreign | Wealth management loans and mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	122	140
Foreign | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	3,147	2,230
Foreign | Margin loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 1,433	$ 1,479

XML

Loans and asset quality - Loans Additional Information (Details)	6 Months Ended
	Jun. 30, 2020 class_of_receivable segment
Receivables [Abstract]
Number of portfolio segments (segment) | segment	3
Number of classes of financing receivables (class of receivable) | class_of_receivable	6

XML

Loans and asset quality - Allowance for Credit Losses Activity (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended		12 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019	Dec. 31, 2018
Financing Receivable, Allowance for Credit Loss [Line Items]
Accounting Standards Update [Extensible List]				us-gaap:AccountingStandardsUpdate201613Member	us-gaap:AccountingStandardsUpdate201602Member	us-gaap:AccountingStandardsUpdate201613Member	us-gaap:AccountingStandardsUpdate201802Member
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 288	$ 216	$ 248	$ 216	$ 252	$ 252
Charge-offs	0	0	(1)	0	(12)
Recoveries	3	0	2	3	2
Net (charge-offs) recoveries	3	0	1	3	(10)
Provision	163	141	(8)	304	(1)
Ending balance	454	288	241	454	241	216	$ 252
Individually evaluated for impairment:
Loan balance	18	18	112	18	112
Allowance for loan losses	0	0	10	0	10
Collectively evaluated for impairment:
Loan balance			52,284		52,284
Allowance for loan losses			136		136
Collateral dependent loans	18	18		18
Fair value of collateral	26	26		26
Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	140
Ending balance	302	140	146	302	146
Lending-related commitments
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	148
Ending balance	152	148	95	152	95
Domestic | Overdrafts
Collectively evaluated for impairment:
Loans			1,575		1,575
Domestic | Margin loans
Collectively evaluated for impairment:
Loans			10,152		10,152
Domestic | Other
Collectively evaluated for impairment:
Loans			1,122		1,122
Foreign
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	0	24	29	24	32	32
Charge-offs		0	0	0	0
Recoveries		0	0	0	0
Net (charge-offs) recoveries		0	0	0	0
Provision		0	4	0	1
Ending balance	0	0	33	0	33	24	32
Individually evaluated for impairment:
Loan balance		0	0		0
Allowance for loan losses		0	0		0
Collectively evaluated for impairment:
Loan balance			11,539		11,539
Allowance for loan losses			23		23
Foreign | Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	0
Ending balance		0	23		23
Foreign | Lending-related commitments
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	0
Ending balance		0	10		10
Commercial | Domestic
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	26	60	82	60	81	81
Charge-offs	0	0	0	0	(11)
Recoveries	0	0	0	0	0
Net (charge-offs) recoveries	0	0	0	0	(11)
Provision	14	9	(5)	23	7
Ending balance	40	26	77	40	77	60	81
Individually evaluated for impairment:
Loan balance	0	0	96	0	96
Allowance for loan losses	0	0	10	0	10
Collectively evaluated for impairment:
Loan balance			1,356		1,356
Allowance for loan losses			13		13
Commercial | Domestic | Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	13
Ending balance	23	13	23	23	23
Commercial | Domestic | Lending-related commitments
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	13
Ending balance	17	13	54	17	54
Commercial | Foreign
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	10
Ending balance		10
Commercial real estate | Domestic
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	208	76	74	76	75	75
Charge-offs	0	0	0	0	0
Recoveries	0	0	0	0	0
Net (charge-offs) recoveries	0	0	0	0	0
Provision	164	118	(2)	282	(3)
Ending balance	372	208	72	372	72	76	75
Individually evaluated for impairment:
Loan balance	0	0	0	0	0
Allowance for loan losses	0	0	0	0	0
Collectively evaluated for impairment:
Loan balance			5,192		5,192
Allowance for loan losses			57		57
Commercial real estate | Domestic | Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	83
Ending balance	244	83	57	244	57
Commercial real estate | Domestic | Lending-related commitments
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	125
Ending balance	128	125	15	128	15
Financial institutions | Domestic
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	18	20	23	20	22	22
Charge-offs	0	0	0	0	0
Recoveries	0	0	0	0	0
Net (charge-offs) recoveries	0	0	0	0	0
Provision	(2)	4	(2)	2	(1)
Ending balance	16	18	21	16	21	20	22
Individually evaluated for impairment:
Loan balance	0	0	0	0	0
Allowance for loan losses	0	0	0	0	0
Collectively evaluated for impairment:
Loan balance			4,574		4,574
Allowance for loan losses			8		8
Financial institutions | Domestic | Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	10
Ending balance	11	10	8	11	8
Financial institutions | Domestic | Lending-related commitments
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	8
Ending balance	5	8	13	5	13
Financial institutions | Foreign
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	10
Ending balance	11	10		11
Lease financings | Domestic
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	13	3	4	3	5	5
Charge-offs	0	0	0	0	0
Recoveries	0	0	0	0	0
Net (charge-offs) recoveries	0	0	0	0	0
Provision	(10)	10	0	0	(1)
Ending balance	3	13	4	3	4	3	5
Individually evaluated for impairment:
Loan balance	0	0	0	0	0
Allowance for loan losses	0	0	0	0	0
Collectively evaluated for impairment:
Loan balance			662		662
Allowance for loan losses			4		4
Lease financings | Domestic | Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	13
Ending balance	3	13	4	3	4
Lease financings | Domestic | Lending-related commitments
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	0
Ending balance	0	0	0	0	0
Lease financings | Foreign
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	4
Ending balance		4
Wealth management loans and mortgages | Domestic
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	9	20	21	20	21	21
Charge-offs	0	0	(1)	0	(1)
Recoveries	0	0	0	0	0
Net (charge-offs) recoveries	0	0	(1)	0	(1)
Provision	2	1	0	3	0
Ending balance	11	9	20	11	20	20	21
Individually evaluated for impairment:
Loan balance	18	18	16	18	16
Allowance for loan losses	0	0	0	0	0
Collectively evaluated for impairment:
Loan balance			15,563		15,563
Allowance for loan losses			17		17
Wealth management loans and mortgages | Domestic | Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	7
Ending balance	9	7	17	9	17
Wealth management loans and mortgages | Domestic | Lending-related commitments
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	2
Ending balance	2	2	3	2	3
Other residential mortgages | Domestic
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	14	13	15	13	16	16
Charge-offs	0	0	0	0	0
Recoveries	3	0	2	3	2
Net (charge-offs) recoveries	3	0	2	3	2
Provision	(5)	(1)	(3)	(6)	(4)
Ending balance	12	14	14	12	14	13	16
Individually evaluated for impairment:
Loan balance	0	0	0	0	0
Allowance for loan losses	0	0	0	0	0
Collectively evaluated for impairment:
Loan balance			549		549
Allowance for loan losses			14		14
Other residential mortgages | Domestic | Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	14
Ending balance	12	14	14	12	14
Other residential mortgages | Domestic | Lending-related commitments
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	0
Ending balance	0	0	0	0	0
All other | Domestic
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			0		0	0
Charge-offs			0		0
Recoveries			0		0
Net (charge-offs) recoveries			0		0
Provision			0		0
Ending balance			0		0		$ 0
Individually evaluated for impairment:
Loan balance			0		0
Allowance for loan losses			0		0
Collectively evaluated for impairment:
Loan balance			12,849		12,849
Allowance for loan losses			0		0
All other | Domestic | Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Ending balance			0		0
All other | Domestic | Lending-related commitments
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Ending balance			$ 0		$ 0
Financial Institutions and Other | Foreign
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 12
Ending balance		12
Cumulative Effect, Period Of Adoption, Adjustment
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance		(69)		(69)
Ending balance						(69)
Cumulative Effect, Period Of Adoption, Adjustment | Foreign
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance		(24)		(24)
Ending balance						(24)
Cumulative Effect, Period Of Adoption, Adjustment | Commercial | Domestic
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance		(43)		(43)
Ending balance						(43)
Cumulative Effect, Period Of Adoption, Adjustment | Commercial real estate | Domestic
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance		14		14
Ending balance						14
Cumulative Effect, Period Of Adoption, Adjustment | Financial institutions | Domestic
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance		(6)		(6)
Ending balance						(6)
Cumulative Effect, Period Of Adoption, Adjustment | Lease financings | Domestic
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance		0		0
Ending balance						0
Cumulative Effect, Period Of Adoption, Adjustment | Wealth management loans and mortgages | Domestic
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance		(12)		(12)
Ending balance						(12)
Cumulative Effect, Period Of Adoption, Adjustment | Other residential mortgages | Domestic
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance		2		2
Ending balance						2
Cumulative Effect, Period of Adoption, Adjusted Balance
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance		147		147
Ending balance						147
Cumulative Effect, Period of Adoption, Adjusted Balance | Foreign
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance		0		0
Ending balance						0
Cumulative Effect, Period of Adoption, Adjusted Balance | Commercial | Domestic
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance		17		17
Ending balance						17
Cumulative Effect, Period of Adoption, Adjusted Balance | Commercial real estate | Domestic
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance		90		90
Ending balance						90
Cumulative Effect, Period of Adoption, Adjusted Balance | Financial institutions | Domestic
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance		14		14
Ending balance						14
Cumulative Effect, Period of Adoption, Adjusted Balance | Lease financings | Domestic
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance		3		3
Ending balance						3
Cumulative Effect, Period of Adoption, Adjusted Balance | Wealth management loans and mortgages | Domestic
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance		8		8
Ending balance						8
Cumulative Effect, Period of Adoption, Adjusted Balance | Other residential mortgages | Domestic
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance		$ 15		$ 15
Ending balance						$ 15

XML

Loans and asset quality - Nonperforming Assets (Details) - Domestic - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Financing Receivable, Impaired [Line Items]
With an allowance	$ 68
Without an allowance	18
Total nonperforming loans	86	$ 86
With an allowance, Other assets owned	0
Without an allowance, Other assets owned	2
Other assets owned	2	3
With an allowance, Total nonperforming assets	68
Without an allowance, Total nonperforming assets	20
Total nonperforming assets	88	89
Other residential mortgages
Financing Receivable, Impaired [Line Items]
With an allowance	58
Without an allowance	0
Total nonperforming loans	58	62
Wealth management loans and mortgages
Financing Receivable, Impaired [Line Items]
With an allowance	10
Without an allowance	18
Total nonperforming loans	$ 28	$ 24

XML

Loans and asset quality - Past Due Loans (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Financing Receivable, Past Due [Line Items]
Total past due loans	$ 43	$ 87
30 to 59 Days Past Due
Financing Receivable, Past Due [Line Items]
Total past due loans	36	37
60 to 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Total past due loans	7	50
Equal to Greater than 90 Days Past Due
Financing Receivable, Past Due [Line Items]
Total past due loans	0	0
Domestic | Wealth management loans and mortgages
Financing Receivable, Past Due [Line Items]
Total past due loans	37	27
Domestic | Wealth management loans and mortgages | 30 to 59 Days Past Due
Financing Receivable, Past Due [Line Items]
Total past due loans	31	22
Domestic | Wealth management loans and mortgages | 60 to 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Total past due loans	6	5
Domestic | Wealth management loans and mortgages | Equal to Greater than 90 Days Past Due
Financing Receivable, Past Due [Line Items]
Total past due loans	0	0
Domestic | Other residential mortgages
Financing Receivable, Past Due [Line Items]
Total past due loans	6	11
Domestic | Other residential mortgages | 30 to 59 Days Past Due
Financing Receivable, Past Due [Line Items]
Total past due loans	5	8
Domestic | Other residential mortgages | 60 to 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Total past due loans	1	3
Domestic | Other residential mortgages | Equal to Greater than 90 Days Past Due
Financing Receivable, Past Due [Line Items]
Total past due loans	0	0
Domestic | Financial institutions
Financing Receivable, Past Due [Line Items]
Total past due loans	0	31
Domestic | Financial institutions | 30 to 59 Days Past Due
Financing Receivable, Past Due [Line Items]
Total past due loans	0	1
Domestic | Financial institutions | 60 to 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Total past due loans	0	30
Domestic | Financial institutions | Equal to Greater than 90 Days Past Due
Financing Receivable, Past Due [Line Items]
Total past due loans	0	0
Domestic | Commercial real estate
Financing Receivable, Past Due [Line Items]
Total past due loans	0	18
Domestic | Commercial real estate | 30 to 59 Days Past Due
Financing Receivable, Past Due [Line Items]
Total past due loans	0	6
Domestic | Commercial real estate | 60 to 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Total past due loans	0	12
Domestic | Commercial real estate | Equal to Greater than 90 Days Past Due
Financing Receivable, Past Due [Line Items]
Total past due loans	$ 0	$ 0

XML

Loans and asset quality - Loan Modifications (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding recorded investment post-modification (less than)	$ 282
Other residential mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding recorded investment post-modification (less than)		$ 1	$ 1

XML

Loans and asset quality - Credit Risk Profile by Origination (Details) $ in Millions	Jun. 30, 2020 USD ($)
Financing Receivable, Credit Quality Indicator [Line Items]
YTD20	$ 3,926
2019	4,407
2018	2,267
2017	2,951
2016	2,747
Prior to 2016	5,263
Amortized cost	29,628
Converted to term loans - Amortized cost	29
Total	51,218
Accrued interest receivable	77
Wealth management mortgages
Financing Receivable, Credit Quality Indicator [Line Items]
YTD20	491
2019	1,126
2018	719
2017	1,360
2016	1,736
Prior to 2016	2,976
Amortized cost	37
Converted to term loans - Amortized cost	0
Total	8,445
Wealth management loans and mortgages
Financing Receivable, Credit Quality Indicator [Line Items]
YTD20	525
2019	1,207
2018	731
2017	1,531
2016	1,792
Prior to 2016	3,096
Amortized cost	6,993
Converted to term loans - Amortized cost	0
Total	15,875
Accrued interest receivable	27
Other residential mortgages
Financing Receivable, Credit Quality Indicator [Line Items]
YTD20	0
2019	0
2018	0
2017	0
2016	0
Prior to 2016	450
Amortized cost	0
Converted to term loans - Amortized cost	0
Total	450
Accrued interest receivable	2
Other loans
Financing Receivable, Credit Quality Indicator [Line Items]
YTD20	0
2019	0
2018	0
2017	0
2016	0
Prior to 2016	0
Amortized cost	1,530
Converted to term loans - Amortized cost	0
Total	1,530
Accrued interest receivable	1
Margin loans
Financing Receivable, Credit Quality Indicator [Line Items]
YTD20	2,552
2019	1,000
2018	0
2017	0
2016	0
Prior to 2016	0
Amortized cost	9,357
Converted to term loans - Amortized cost	0
Total	12,909
Accrued interest receivable	11
Investment grade | Loans receivable
Financing Receivable, Credit Quality Indicator [Line Items]
YTD20	34
2019	81
2018	12
2017	171
2016	56
Prior to 2016	85
Amortized cost	6,877
Converted to term loans - Amortized cost	0
Total	7,316
Non-investment grade | Loans receivable
Financing Receivable, Credit Quality Indicator [Line Items]
YTD20	0
2019	0
2018	0
2017	0
2016	0
Prior to 2016	35
Amortized cost	79
Converted to term loans - Amortized cost	0
Total	114
Commercial
Financing Receivable, Credit Quality Indicator [Line Items]
YTD20	147
2019	282
2018	118
2017	554
2016	60
Prior to 2016	0
Amortized cost	1,284
Converted to term loans - Amortized cost	0
Total	2,445
Accrued interest receivable	3
Commercial | Investment grade
Financing Receivable, Credit Quality Indicator [Line Items]
YTD20	107
2019	213
2018	106
2017	554
2016	57
Prior to 2016	0
Amortized cost	1,054
Converted to term loans - Amortized cost	0
Total	2,091
Commercial | Non-investment grade
Financing Receivable, Credit Quality Indicator [Line Items]
YTD20	40
2019	69
2018	12
2017	0
2016	3
Prior to 2016	0
Amortized cost	230
Converted to term loans - Amortized cost	0
Total	354
Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
YTD20	577
2019	1,622
2018	1,265
2017	729
2016	852
Prior to 2016	634
Amortized cost	520
Converted to term loans - Amortized cost	29
Total	6,228
Accrued interest receivable	8
Commercial real estate | Investment grade
Financing Receivable, Credit Quality Indicator [Line Items]
YTD20	500
2019	1,212
2018	806
2017	550
2016	431
Prior to 2016	422
Amortized cost	292
Converted to term loans - Amortized cost	0
Total	4,213
Commercial real estate | Non-investment grade
Financing Receivable, Credit Quality Indicator [Line Items]
YTD20	77
2019	410
2018	459
2017	179
2016	421
Prior to 2016	212
Amortized cost	228
Converted to term loans - Amortized cost	29
Total	2,015
Financial institutions
Financing Receivable, Credit Quality Indicator [Line Items]
YTD20	80
2019	276
2018	133
2017	125
2016	14
Prior to 2016	181
Amortized cost	9,944
Converted to term loans - Amortized cost	0
Total	10,753
Accrued interest receivable	25
Financial institutions | Investment grade
Financing Receivable, Credit Quality Indicator [Line Items]
YTD20	27
2019	247
2018	133
2017	125
2016	14
Prior to 2016	181
Amortized cost	7,934
Converted to term loans - Amortized cost	0
Total	8,661
Financial institutions | Non-investment grade
Financing Receivable, Credit Quality Indicator [Line Items]
YTD20	53
2019	29
2018	0
2017	0
2016	0
Prior to 2016	0
Amortized cost	2,010
Converted to term loans - Amortized cost	0
Total	2,092
Lease financings
Financing Receivable, Credit Quality Indicator [Line Items]
YTD20	45
2019	20
2018	20
2017	12
2016	29
Prior to 2016	902
Amortized cost	0
Converted to term loans - Amortized cost	0
Total	1,028
Accrued interest receivable	$ 0

XML

Loans and asset quality - Credit Risk Indicators Narrative (Details) - USD ($)	6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of exposure to investment grade securities	95.00%
Percentage of financial institution exposure secured	75.00%
Percent of financial institution exposure expiring within one year	90.00%
Loans	$ 55,397,000,000		$ 54,953,000,000
Wealth management loans and mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan to value ratio at origination (percent)	62.00%
Percentage of past due mortgages (less than)	1.00%
Wealth management loans and mortgages | California
Accounts, Notes, Loans and Financing Receivable [Line Items]
Geographic concentrations (percent)	23.00%
Wealth management loans and mortgages | New York
Accounts, Notes, Loans and Financing Receivable [Line Items]
Geographic concentrations (percent)	17.00%
Wealth management loans and mortgages | Massachusetts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Geographic concentrations (percent)	10.00%
Wealth management loans and mortgages | Florida
Accounts, Notes, Loans and Financing Receivable [Line Items]
Geographic concentrations (percent)	8.00%
Wealth management loans and mortgages | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Geographic concentrations (percent)	42.00%
Other residential mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 450,000,000		494,000,000
Overdrafts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans			2,700,000,000
Overdraft repayment period	2 days
Margin loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 12,900,000,000		13,400,000,000
Domestic
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	42,893,000,000		42,548,000,000
Domestic | Wealth management loans and mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	15,753,000,000		16,050,000,000
Domestic | Other residential mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	450,000,000		494,000,000
Purchased mortgages	81,000,000
Domestic | Overdrafts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	1,073,000,000		524,000,000
Domestic | Margin loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 11,476,000,000		$ 11,907,000,000
Domestic | Margin loans | Minimum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Required daily collateral margin (in excess of)	100.00%
Equal to or greater than 60 days past due | Domestic | Other residential mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of past due mortgages (less than)	25.00%
Overdrafts | Overdrafts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 4,179,000,000
Operating segments
Accounts, Notes, Loans and Financing Receivable [Line Items]
Federal funds sold and securities purchased under resale agreements, allowance for credit losses	$ 0	$ 18,000,000

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Goodwill and intangible assets - Goodwill (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Goodwill [Roll Forward]
Beginning balance	$ 17,386	$ 17,350
Foreign currency translation	(133)	(13)
Other	0
Ending balance	17,253	17,337
Investment Services
Goodwill [Roll Forward]
Beginning balance	8,332	8,333
Foreign currency translation	(24)	(6)
Other	47
Ending balance	8,355	8,327
Investment and Wealth Management
Goodwill [Roll Forward]
Beginning balance	9,007	8,970
Foreign currency translation	(109)	(7)
Other	0
Ending balance	8,898	8,963
Other
Goodwill [Roll Forward]
Beginning balance	47	47
Foreign currency translation	0	0
Other	(47)
Ending balance	$ 0	$ 47

XML

Goodwill and intangible assets - Intangible Assets by Business Segment (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Intangible Assets [Roll Forward]
Beginning Balance		$ 3,107		$ 3,107	$ 3,220
Amortization	$ (26)	(26)	$ (30)	(52)	(59)
Foreign currency translation				(10)	(1)
Ending Balance	3,045		3,160	3,045	3,160
Investment Services
Intangible Assets [Roll Forward]
Beginning Balance		678		678	758
Amortization				(36)	(41)
Foreign currency translation				0	0
Ending Balance	642		717	642	717
Investment and Wealth Management
Intangible Assets [Roll Forward]
Beginning Balance		1,580		1,580	1,613
Amortization				(16)	(18)
Foreign currency translation				(10)	(1)
Ending Balance	1,554		1,594	1,554	1,594
Other
Intangible Assets [Roll Forward]
Beginning Balance		$ 849		849	849
Amortization				0	0
Foreign currency translation				0	0
Ending Balance	$ 849		$ 849	$ 849	$ 849

XML

Goodwill and intangible assets - Intangible Assets by Type (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Intangible Assets by Major Class [Line Items]
Gross carrying amount	$ 4,862	$ 4,881
Accumulated amortization	(1,817)	(1,774)
Net carrying amount	3,045	3,107	$ 3,160	$ 3,220
Finite-lived Intangible Assets
Intangible Assets by Major Class [Line Items]
Gross carrying amount	2,287	2,296
Accumulated amortization	(1,817)	(1,774)
Net carrying amount	$ 470	522
Finite-lived Intangible Assets | Weighted Average
Intangible Assets by Major Class [Line Items]
Remaining weighted- average amortization period	10 years
Finite-lived Intangible Assets | Customer contracts—Investment Services
Intangible Assets by Major Class [Line Items]
Gross carrying amount	$ 1,514	1,520
Accumulated amortization	(1,244)	(1,214)
Net carrying amount	$ 270	306
Finite-lived Intangible Assets | Customer contracts—Investment Services | Weighted Average
Intangible Assets by Major Class [Line Items]
Remaining weighted- average amortization period	10 years
Finite-lived Intangible Assets | Customer relationships
Intangible Assets by Major Class [Line Items]
Gross carrying amount	$ 709	712
Accumulated amortization	(554)	(544)
Net carrying amount	$ 155	168
Finite-lived Intangible Assets | Customer relationships | Weighted Average
Intangible Assets by Major Class [Line Items]
Remaining weighted- average amortization period	10 years
Finite-lived Intangible Assets | Other
Intangible Assets by Major Class [Line Items]
Gross carrying amount	$ 64	64
Accumulated amortization	(19)	(16)
Net carrying amount	$ 45	48
Finite-lived Intangible Assets | Other | Weighted Average
Intangible Assets by Major Class [Line Items]
Remaining weighted- average amortization period	14 years
Indefinite-lived Intangible Assets
Intangible Assets by Major Class [Line Items]
Gross carrying amount	$ 2,575	2,585
Net carrying amount	2,575	2,585
Indefinite-lived Intangible Assets | Tradenames
Intangible Assets by Major Class [Line Items]
Gross carrying amount	1,291	1,293
Net carrying amount	1,291	1,293
Indefinite-lived Intangible Assets | Customer relationships
Intangible Assets by Major Class [Line Items]
Gross carrying amount	1,284	1,292
Net carrying amount	$ 1,284	$ 1,292

XML

Goodwill and intangible assets - Estimated Annual Amortization Expense (Details) $ in Millions	Jun. 30, 2020 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2020	$ 104
2021	81
2022	63
2023	52
2024	$ 45

XML

Goodwill and intangible assets - Narrative (Details)	3 Months Ended	6 Months Ended
	Jun. 30, 2020 USD ($)	Jun. 30, 2020 reporting_unit
Goodwill [Line Items]
Number of reporting units (reporting unit)		6
Goodwill impairment | $	$ 0
Investment Services
Goodwill [Line Items]
Number of reporting units (reporting unit)		4
Investment and Wealth Management
Goodwill [Line Items]
Number of reporting units (reporting unit)		2

XML

Other assets - Components of Other Assets (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Other Assets [Abstract]
Corporate/bank-owned life insurance	$ 5,245	$ 5,219
Accounts receivable	3,404	3,802
Fails to deliver	3,201	1,671
Software	1,778	1,590
Prepaid pension assets	1,545	1,464
Equity in a joint venture and other investments	1,146	1,102
Renewable energy investments	1,083	1,144
Qualified affordable housing project investments	962	1,024
Prepaid expense	544	491
Federal Reserve Bank stock	477	466
Income taxes receivable	194	388
Seed capital	149	184
Fair value of hedging derivatives	137	21
Other	1,441	1,655
Total other assets	21,306	20,221
Federal Home Loan Bank stock, at cost	$ 7	$ 22

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Other assets - Non-Readily Marketable Equity Securities (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Other Assets [Abstract]
Equity securities without readily determinable fair value, amount	$ 106			$ 106		$ 61
Equity securities without readily determinable fair value, upward price adjustment, annual amount	2	$ 4	$ 2	6	$ 2
Equity securities without readily determinable fair value, downward price adjustment, annual amount	0	0	(1)	0	(1)
Equity securities without readily determinable fair value, net adjustment, annual amount	2	$ 4	$ 1	6	$ 1
Equity securities without readily determinable fair value, upward price adjustment, cumulative amount amount	38			38
Equity securities without readily determinable fair value, downward price adjustment, cumulative amount	(4)			(4)
Equity securities without readily determinable fair value, net price adjustment, cumulative amount	$ 34			$ 34

XML

Other assets - Qualified Affordable Housing Project Investments (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Other Assets [Abstract]
Qualified affordable housing project investments	$ 962			$ 962		$ 1,024
Qualified affordable housing project investments, commitment	363			363		$ 422
Qualified affordable housing project commitment - 2020	72			72
Qualified affordable housing project commitment - 2021	179			179
Qualified affordable housing project commitment - 2022	82			82
Qualified affordable housing project commitment - 2023	5			5
Qualified affordable housing project commitment - 2024	1			1
Qualified affordable housing project commitment - 2025 and thereafter	24			24
Tax credits and other tax benefits	38	$ 38	$ 39	76	$ 78
Amortization expense included in the provision for income taxes	$ 31	$ 31	$ 32	$ 62	$ 64

XML

Other assets - Seed Capital and Private Equity Investments (Details) - Other Assets - NAV - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items]
Fair value	$ 187	$ 181
Unfunded commitments	70	55
Seed capital
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items]
Fair value	56	59
Unfunded commitments	12	0
Private equitiy investments (SBICs)
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items]
Fair value	91	89
Unfunded commitments	58	55
Other
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items]
Fair value	40	33
Unfunded commitments	$ 0	$ 0
Minimum | Seed capital
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items]
Redemption notice period	6 years	6 years
Maximum | Seed capital
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items]
Redemption notice period	11 years
Maximum | Other
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items]
Redemption notice period	95 days	95 days

XML

Contract revenue - Disaggregation of Contract Revenues (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Disaggregation of Revenue [Line Items]
Total fee and other revenue	$ 3,176	$ 3,332	$ 3,112	$ 6,508	$ 6,144
Income from consolidated investment management funds, net of noncontrolling interests	950	980	1,017	1,930	1,963
Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	2,876	2,965	2,853	5,841	5,636
Fee and other revenue - not in scope of ASC 606	339	347	265	686	530
Total fee and other revenue	3,215	3,312	3,118	6,527	6,166
Asset servicing fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	1,157	1,139	1,109	2,296	2,202
Clearing services fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	431	470	410	901	808
Issuer services fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	277	263	291	540	542
Treasury services fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	145	149	141	294	273
Total investment services fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	2,010	2,021	1,951	4,031	3,825
Investment management and performance fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	791	863	833	1,654	1,674
Financing-related fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	24	28	17	52	34
Distribution and servicing | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	27	31	31	58	62
Investment and other income | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	24	22	21	46	41
Investment Services | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	2,081	2,102	2,013	4,183	3,951
Fee and other revenue - not in scope of ASC 606	258	334	220	592	443
Total fee and other revenue	2,339	2,436	2,233	4,775	4,394
Investment Services | Asset servicing fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	1,147	1,127	1,095	2,274	2,176
Investment Services | Clearing services fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	431	470	411	901	809
Investment Services | Issuer services fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	277	263	291	540	542
Investment Services | Treasury services fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	144	149	140	293	272
Investment Services | Total investment services fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	1,999	2,009	1,937	4,008	3,799
Investment Services | Investment management and performance fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	4	5	4	9	8
Investment Services | Financing-related fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	23	28	16	51	33
Investment Services | Distribution and servicing | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	(7)	(12)	(13)	(19)	(27)
Investment Services | Investment and other income | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	62	72	69	134	138
Investment and Wealth Management | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	811	878	850	1,689	1,707
Fee and other revenue - not in scope of ASC 606	27	(32)	4	(5)	16
Total fee and other revenue	838	846	854	1,684	1,723
Income from consolidated investment management funds, net of noncontrolling interests	39	(20)	6	19	22
Investment and Wealth Management | Asset servicing fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	25	23	20	48	40
Investment and Wealth Management | Clearing services fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	0	0	0	0	0
Investment and Wealth Management | Issuer services fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	0	0	0	0	0
Investment and Wealth Management | Treasury services fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	0	0	1	0	1
Investment and Wealth Management | Total investment services fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	25	23	21	48	41
Investment and Wealth Management | Investment management and performance fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	792	862	833	1,654	1,674
Investment and Wealth Management | Financing-related fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	1	0	0	1	0
Investment and Wealth Management | Distribution and servicing | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	34	43	44	77	89
Investment and Wealth Management | Investment and other income | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	(41)	(50)	(48)	(91)	(97)
Other | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	(16)	(15)	(10)	(31)	(22)
Fee and other revenue - not in scope of ASC 606	54	45	41	99	71
Total fee and other revenue	38	30	31	68	49
Other | Asset servicing fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	(15)	(11)	(6)	(26)	(14)
Other | Clearing services fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	0	0	(1)	0	(1)
Other | Issuer services fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	0	0	0	0	0
Other | Treasury services fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	1	0	0	1	0
Other | Total investment services fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	(14)	(11)	(7)	(25)	(15)
Other | Investment management and performance fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	(5)	(4)	(4)	(9)	(8)
Other | Financing-related fees | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	0	0	1	0	1
Other | Distribution and servicing | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	0	0	0	0	0
Other | Investment and other income | Operating segments
Disaggregation of Revenue [Line Items]
Total fee revenue - contract revenue	$ 3	$ 0	$ 0	$ 3	$ 0

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Contract revenue - Narrative (Details) - USD ($)	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Capitalized Contract Cost [Line Items]
Contract with customer, asset	$ 2,400,000,000			$ 2,400,000,000		$ 2,419,000,000
Contract assets representing accrued revenues not yet billed	69,000,000			69,000,000		32,000,000
Contract with customer, liability	195,000,000			195,000,000		168,000,000
Contract with customer, liability, revenue recognized	58,000,000			78,000,000
Capitalized contract cost, impairment				0
Incremental costs for obtaining contracts
Capitalized Contract Cost [Line Items]
Capitalized contract costs	$ 80,000,000			$ 80,000,000		86,000,000
Capitalized contract cost, amortization period	9 years			9 years
Capitalized contract cost, amortization	$ 5,000,000	$ 5,000,000	$ 5,000,000	$ 10,000,000	$ 10,000,000
Costs to fulfill contract
Capitalized Contract Cost [Line Items]
Capitalized contract costs	14,000,000			14,000,000		$ 16,000,000
Capitalized contract cost, amortization	$ 2,000,000	$ 1,000,000	$ 2,000,000	$ 3,000,000	$ 3,000,000
Costs to fulfill contract | Minimum
Capitalized Contract Cost [Line Items]
Capitalized contract cost, amortization period	7 years			7 years
Costs to fulfill contract | Maximum
Capitalized Contract Cost [Line Items]
Capitalized contract cost, amortization period	9 years			9 years

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Net interest revenue (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020		Jun. 30, 2019
Interest revenue
Deposits with the Federal Reserve and other central banks	$ (7)	$ 80	$ 113	$ 73		$ 252
Deposits with banks	40	58	64	98		127
Federal funds sold and securities purchased under resale agreements	61	396	568	457		1,042
Margin loans	40	87	119	127		254
Non-margin loans	230	309	365	539		720
Securities:
Taxable	556	594	687	1,150		1,393
Exempt from federal income taxes	6	6	10	12		22
Total securities	562	600	697	1,162		1,415
Trading securities	17	40	39	57		75
Total interest revenue	943	1,570	1,965	2,513		3,885
Interest expense
Deposits	(17)	240	432	223		823
Federal funds purchased and securities sold under repurchase agreements	1	275	372	276		703
Trading liabilities	2	7	11	9		18
Other borrowed funds	7	4	20	11		44
Commercial paper	1	6	18	7		26
Customer payables	(1)	30	69	29		139
Long-term debt	170	194	241	364		489
Total interest expense	163	756	1,163	919		2,242
Net interest revenue	780	814	802	1,594		1,643
Provision for credit losses	143	169	(8)	312	[1]	(1)	[1]
Net interest revenue after provision for credit losses	$ 637	$ 645	$ 810	$ 1,282		$ 1,644

[1] In the first quarter of 2020, we adopted new accounting guidance included in ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, on a prospective basis. See Note 2 of the Notes to Consolidated Financial Statements for additional information.

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Employee benefit plans - Combined Data for Defined Benefit Pension and Post Retirement Healthcare Plans (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Pension Benefits | Domestic
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 0	$ 0	$ 0	$ 0	$ 0
Interest cost	39	39	45	78	89
Expected return on assets	(79)	(80)	(84)	(159)	(168)
Other	21	22	13	43	26
Net periodic benefit (credit) cost	(19)	(19)	(26)	(38)	(53)
Pension Benefits | Foreign
Defined Benefit Plan Disclosure [Line Items]
Service cost	3	3	3	6	6
Interest cost	6	7	8	13	16
Expected return on assets	(9)	(10)	(12)	(19)	(23)
Other	3	3	1	6	1
Net periodic benefit (credit) cost	3	3	0	6	0
Healthcare Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	0	0	0	0	0
Interest cost	1	1	1	2	3
Expected return on assets	(2)	(1)	(2)	(3)	(4)
Other	0	(1)	0	(1)	(1)
Net periodic benefit (credit) cost	$ (1)	$ (1)	$ (1)	$ (2)	$ (2)

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Income taxes - Narrative (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 216	$ 265	$ 264	$ 481	$ 501
Effective tax rate	18.30%	21.60%	20.50%
Tax reserves	$ 178			178		$ 173
Impact on effective tax rate if tax reserves were unnecessary	178			178
Accrued interest, related to income taxes in the balance sheet	34			34
Additional tax expense related to interest				3	$ 6
Reasonably possible decrease in uncertain tax positions within the next 12 months, if a re-evaluation is required	$ 100			$ 100

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Variable interest entities and securitization - Assets and Liabilities of VIEs (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Variable Interest Entity [Line Items]
Nonredeemable noncontrolling interests	$ 112	$ 102
VME classification of carrying amount, assets	283	50
VME classification of carrying amount, liabilities	1	1
Noncontrolling interest in VME	37	1
Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Trading assets	850	629
Other assets	10	16
Total assets	860	645
Other liabilities	403	388
Total liabilities	403	388
Nonredeemable noncontrolling interests	112	102
Variable Interest Entity, Primary Beneficiary | Investment Management funds
Variable Interest Entity [Line Items]
Trading assets	450	229
Other assets	10	16
Total assets	460	245
Other liabilities	4	1
Total liabilities	4	1
Nonredeemable noncontrolling interests	112	102
Variable Interest Entity, Primary Beneficiary | Securitization
Variable Interest Entity [Line Items]
Trading assets	400	400
Other assets	0	0
Total assets	400	400
Other liabilities	399	387
Total liabilities	399	387
Nonredeemable noncontrolling interests	$ 0	$ 0

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Variable interest entities and securitization - Non-consolidated VIEs (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Variable Interest Entity [Line Items]
Assets	$ 442,316	$ 381,508
Liabilities	398,350	339,780
Variable Interest Entity, Not Primary Beneficiary | Securities available-for-sale
Variable Interest Entity [Line Items]
Assets	199	208
Liabilities	0	0
Maximum loss exposure	199	208
Variable Interest Entity, Not Primary Beneficiary | Other
Variable Interest Entity [Line Items]
Assets	2,237	2,400
Liabilities	363	422
Maximum loss exposure	$ 2,609	$ 2,822

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Preferred stock - Narrative (Details) - $ / shares	6 Months Ended
	Jun. 30, 2020	May 31, 2020	Dec. 31, 2019
Class of Stock [Line Items]
Preferred stock, shares authorized (shares)	100,000,000		100,000,000
Preferred stock, par value (usd per share)	$ 0.01		$ 0.01
Preferred stock, issued (shares)	45,826		35,826
Series G Noncumulative Perpetual Preferred Stock
Class of Stock [Line Items]
Preferred stock, issued (shares)		1,000,000
Per annum dividend rate	4.70%
Preferred stock, basis spread on variable rate	4.358%

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Preferred stock - Summary (Details) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Class of Stock [Line Items]
Total shares issued and outstanding (shares)	45,826	35,826
Carrying value	$ 4,532	$ 3,542
Series A Noncumulative Perpetual Preferred Stock
Class of Stock [Line Items]
Per annum dividend rate description	Greater of (i) three-month LIBOR plus 0.565% for the related distribution period; or (ii) 4.000%
Per annum dividend rate	4.00%
Total shares issued and outstanding (shares)	5,001	5,001
Carrying value	$ 500	$ 500
Liquidation preference per share (usd per share)	$ 100,000
Series A Noncumulative Perpetual Preferred Stock | LIBOR
Class of Stock [Line Items]
Preferred stock, basis spread on variable rate	0.565%
Series C Noncumulative Perpetual Preferred Stock
Class of Stock [Line Items]
Per annum dividend rate	5.20%
Total shares issued and outstanding (shares)	5,825	5,825
Carrying value	$ 568	$ 568
Liquidation preference per share (usd per share)	$ 100,000
Series D Noncumulative Perpetual Preferred Stock
Class of Stock [Line Items]
Per annum dividend rate description	4.50% to but excluding June 20, 2023, then a floating rate equal to the three-month LIBOR plus 2.46%
Per annum dividend rate	4.50%
Total shares issued and outstanding (shares)	5,000	5,000
Carrying value	$ 494	$ 494
Liquidation preference per share (usd per share)	$ 100,000
Series D Noncumulative Perpetual Preferred Stock | LIBOR
Class of Stock [Line Items]
Preferred stock, basis spread on variable rate	2.46%
Series E Noncumulative Perpetual Preferred Stock
Class of Stock [Line Items]
Per annum dividend rate description	4.95% to but excluding June 20, 2020, then a floating rate equal to the three-month LIBOR plus 3.42%
Per annum dividend rate	4.95%
Total shares issued and outstanding (shares)	10,000	10,000
Carrying value	$ 990	$ 990
Liquidation preference per share (usd per share)	$ 100,000
Series E Noncumulative Perpetual Preferred Stock | LIBOR
Class of Stock [Line Items]
Preferred stock, basis spread on variable rate	3.42%
Series F Noncumulative Perpetual Preferred Stock
Class of Stock [Line Items]
Per annum dividend rate description	4.625% to but excluding Sept. 20, 2026, then a floating rate equal to the three-month LIBOR plus 3.131%
Per annum dividend rate	4.625%
Total shares issued and outstanding (shares)	10,000	10,000
Carrying value	$ 990	$ 990
Liquidation preference per share (usd per share)	$ 100,000
Series F Noncumulative Perpetual Preferred Stock | LIBOR
Class of Stock [Line Items]
Preferred stock, basis spread on variable rate	3.131%
Series G Noncumulative Perpetual Preferred Stock
Class of Stock [Line Items]
Per annum dividend rate description	4.70% to but excluding Sept. 20, 2025, then a floating rate equal to the five-year treasury rate plus 4.358%
Per annum dividend rate	4.70%
Preferred stock, basis spread on variable rate	4.358%
Total shares issued and outstanding (shares)	10,000	0
Carrying value	$ 990	$ 0
Liquidation preference per share (usd per share)	$ 100,000
Series G Noncumulative Perpetual Preferred Stock | LIBOR
Class of Stock [Line Items]
Preferred stock, basis spread on variable rate	4.358%

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Preferred stock - Summary of Preferred Dividends Paid (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Class of Stock [Line Items]
Preferred dividends paid	$ 49	$ 36	$ 48	$ 85	$ 84
Series A Preferred Stock
Class of Stock [Line Items]
Depositary shares per share	1.00%			1.00%
Dividend paid per share (usd per share)	$ 1,022.22	$ 1,011.11	$ 1,022.22	$ 2,033.33	$ 2,022.22
Preferred dividends paid	$ 5	$ 5	$ 5	$ 10	$ 10
Series C Preferred Stock
Class of Stock [Line Items]
Depositary shares per share	0.025%			0.025%
Dividend paid per share (usd per share)	$ 1,300.00	$ 1,300.00	$ 1,300.00	$ 2,600.00	$ 2,600.00
Preferred dividends paid	$ 8	$ 8	$ 7	$ 16	$ 15
Series D Preferred Stock
Class of Stock [Line Items]
Depositary shares per share	1.00%			1.00%
Dividend paid per share (usd per share)	$ 2,250.00		$ 2,250.00	$ 2,250.00	$ 2,250.00
Preferred dividends paid	$ 11	0	$ 11	$ 11	$ 11
Series E Preferred Stock
Class of Stock [Line Items]
Depositary shares per share	1.00%			1.00%
Dividend paid per share (usd per share)	$ 2,475.00		$ 2,475.00	$ 2,475.00	$ 2,475.00
Preferred dividends paid	$ 25	$ 0	$ 25	$ 25	$ 25
Series F Preferred Stock
Class of Stock [Line Items]
Depositary shares per share	1.00%			1.00%
Dividend paid per share (usd per share)		$ 2,312.50		$ 2,312.50	$ 2,312.50
Preferred dividends paid	$ 0	$ 23	$ 0	$ 23	$ 23
Series G Noncumulative Perpetual Preferred Stock
Class of Stock [Line Items]
Depositary shares per share	1.00%			1.00%

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Other comprehensive income (loss) - Components (Details) - USD ($) $ in Millions		3 Months Ended			6 Months Ended
		Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Pre-tax amount
Total other comprehensive income (loss), Pre-tax amount		$ 1,114	$ (21)	$ 420	$ 1,093	$ 777
Tax (expense) benefit
Total other comprehensive income (loss), Tax (expense) benefit		(230)	(165)	(118)	(395)	(202)
After-tax amount
Total other comprehensive income (loss), net of tax	[1]	884	(186)	302	698	575
Foreign currency translation
Pre-tax amount
Other comprehensive income (loss), Pre-tax amount		104	(265)	29	(161)	56
Total other comprehensive income (loss), Pre-tax amount		104	(265)	29	(161)	56
Tax (expense) benefit
Other comprehensive income (loss), Tax (expense) benefit		11	(104)	(19)	(93)	(17)
Total other comprehensive income (loss), Tax (expense) benefit		11	(104)	(19)	(93)	(17)
After-tax amount
Other comprehensive income (loss), After-tax amount		115	(369)	10	(254)	39
Total other comprehensive income (loss), net of tax		115	(369)	10	(254)	39
Unrealized gain (loss) on assets available-for-sale
Pre-tax amount
Other comprehensive income (loss), Pre-tax amount		989	243	384	1,232	706
Reclassification adjustment, Pre-tax amount		(9)	(9)	(7)	(18)	(8)
Total other comprehensive income (loss), Pre-tax amount		980	234	377	1,214	698
Tax (expense) benefit
Other comprehensive income (loss), Tax (expense) benefit		(236)	(60)	(97)	(296)	(180)
Reclassification adjustment, Tax (expense) benefit		2	2	2	4	2
Total other comprehensive income (loss), Tax (expense) benefit		(234)	(58)	(95)	(292)	(178)
After-tax amount
Other comprehensive income (loss), After-tax amount		753	183	287	936	526
Reclassification adjustment, After-tax amount		(7)	(7)	(5)	(14)	(6)
Total other comprehensive income (loss), net of tax		746	176	282	922	520
Defined benefit plans
Pre-tax amount
Other comprehensive income (loss), Pre-tax amount					0	(11)
Reclassification adjustment, Pre-tax amount		24	24	12	48	25
Total other comprehensive income (loss), Pre-tax amount		24	24	12	48	14
Tax (expense) benefit
Other comprehensive income (loss), Tax (expense) benefit					0	2
Reclassification adjustment, Tax (expense) benefit		(5)	(6)	(2)	(11)	(5)
Total other comprehensive income (loss), Tax (expense) benefit		(5)	(6)	(2)	(11)	(3)
After-tax amount
Other comprehensive income (loss), After-tax amount					0	(9)
Reclassification adjustment, After-tax amount		19	18	10	37	20
Total other comprehensive income (loss), net of tax		19	18	10	37	11
Unrealized gain (loss) on cash flow hedges
Pre-tax amount
Other comprehensive income (loss), Pre-tax amount		3	(13)	2	(10)	8
Reclassification adjustment, Pre-tax amount		3	(1)	0	2	1
Total other comprehensive income (loss), Pre-tax amount		6	(14)	2	(8)	9
Tax (expense) benefit
Other comprehensive income (loss), Tax (expense) benefit		(1)	3	(2)	2	(6)
Reclassification adjustment, Tax (expense) benefit		(1)	0	0	(1)	2
Total other comprehensive income (loss), Tax (expense) benefit		(2)	3	(2)	1	(4)
After-tax amount
Other comprehensive income (loss), After-tax amount		2	(10)	0	(8)	2
Reclassification adjustment, After-tax amount		2	(1)	0	1	3
Total other comprehensive income (loss), net of tax		4	(11)	0	(7)	5
Unrealized gain (loss) on cash flow hedges | Staff expense
Pre-tax amount
Reclassification adjustment, Pre-tax amount		3	(1)	0	2	1
Tax (expense) benefit
Reclassification adjustment, Tax (expense) benefit		(1)	0	0	(1)	2
After-tax amount
Reclassification adjustment, After-tax amount		$ 2	$ (1)	$ 0	$ 1	$ 3

[1] Other comprehensive income (loss) attributable to The Bank of New York Mellon Corporation shareholders was $884 million for the quarter ended June 30, 2020, $(184) million for the quarter ended March 31, 2020, $302 million for the quarter ended June 30, 2019, $700 million for the six months ended June 30, 2020 and $573 million for the six months ended June 30, 2019.

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Fair value measurement - Assets and Liabilities on Recurring Basis (Details) - USD ($) $ in Millions		Jun. 30, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		$ 110,067	$ 88,550
Trading assets:
Total derivatives fair value		9,973	9,061
Effect of master netting agreements		(5,640)	(5,819)
Total derivative assets		4,333	3,242
Trading liabilities:
Total derivatives fair value		9,692	9,206
Effect of master netting agreements		(5,817)	(5,415)
Derivative liabilities		3,875	3,791
Long-term debt		399	387
Investment management funds
Trading assets:
Trading assets		450	229
Other assets		10	16
Total assets		460	245
Trading liabilities:
Total liabilities		4	1
Interest rate contracts
Trading assets:
Effect of master netting agreements		(2,436)	(1,792)
Trading liabilities:
Effect of master netting agreements		(2,680)	(1,986)
Foreign exchange contracts
Trading assets:
Effect of master netting agreements		(3,204)	(4,021)
Trading liabilities:
Effect of master netting agreements		(3,134)	(3,428)
Equity contracts
Trading assets:
Effect of master netting agreements		0	(6)
Trading liabilities:
Effect of master netting agreements		(3)	(1)
Agency RMBS
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		26,437	27,043
U.S. Treasury
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		25,137	15,431
Sovereign debt/sovereign guaranteed
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		15,887	12,646
Agency commercial mortgage-backed securities (“MBS”)
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		9,988	9,417
Foreign covered bonds
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		5,519	4,197
Supranational
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		5,448	3,709
Collateralized loan obligations (“CLOs”)
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		4,432	4,063
U.S. government agencies
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		2,806	1,949
Other ABS
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		2,743	2,143
Commercial paper/certificates of deposit (“CDs”)
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		1,853
Non-agency RMBS
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		1,598	1,233
State and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		1,179	1,044
Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		831	853
Other debt securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		1	1
Not designated as hedging
Trading assets:
Total derivatives fair value		9,836	9,040
Trading liabilities:
Total derivatives fair value		8,728	8,599
Not designated as hedging | Interest rate contracts
Trading assets:
Total derivatives fair value		5,501	3,690
Trading liabilities:
Total derivatives fair value		4,668	3,250
Not designated as hedging | Foreign exchange contracts
Trading assets:
Total derivatives fair value		4,322	5,331
Trading liabilities:
Total derivatives fair value		4,036	5,340
Not designated as hedging | Equity contracts
Trading assets:
Total derivatives fair value		13	19
Trading liabilities:
Total derivatives fair value		22	5
Designated as hedging
Trading assets:
Total derivatives fair value		137	21
Trading liabilities:
Total derivatives fair value		964	607
Designated as hedging | Interest rate contracts
Trading assets:
Total derivatives fair value		0	0
Trading liabilities:
Total derivatives fair value		915	350
Designated as hedging | Foreign exchange contracts
Trading assets:
Total derivatives fair value		137	21
Trading liabilities:
Total derivatives fair value		49	257
Operating segments
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale	[1]	110,067	88,550
Trading assets:
Trading assets		14,150	13,571
Other assets		529	419
Trading liabilities:
Long-term debt		399	387
Operating segments | Investment management funds
Trading assets:
Total assets		460	245
Trading liabilities:
Total liabilities		4	1
Assets measured at fair value on a recurring basis
Trading assets:
Effect of master netting agreements		(5,640)	(5,819)
Total assets		125,206	102,785
Trading liabilities:
Effect of master netting agreements		(5,817)	(5,415)
Total liabilities		6,962	5,836
Assets measured at fair value on a recurring basis | Level 1
Trading assets:
Total assets		$ 41,361	$ 29,576
Percentage of total assets prior to netting		32.00%	27.00%
Trading liabilities:
Total liabilities		$ 2,617	$ 1,560
Percentage of total liabilities prior to netting		20.00%	14.00%
Assets measured at fair value on a recurring basis | Level 2
Trading assets:
Total assets		$ 89,298	$ 78,847
Percentage of total assets prior to netting		68.00%	73.00%
Trading liabilities:
Total liabilities		$ 10,162	$ 9,691
Percentage of total liabilities prior to netting		80.00%	86.00%
Assets measured at fair value on a recurring basis | Level 2 | Grantor Trust
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		$ 538	$ 640
Assets measured at fair value on a recurring basis | Level 3
Trading assets:
Total assets		$ 0	$ 0
Percentage of total assets prior to netting		0.00%	0.00%
Trading liabilities:
Total liabilities		$ 0	$ 0
Percentage of total liabilities prior to netting		0.00%	0.00%
Assets measured at fair value on a recurring basis | Operating segments
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		$ 110,067	$ 88,550
Trading assets:
Debt instruments		7,557	5,811
Equity instruments		2,397	4,539
Effect of master netting agreements		(5,640)	(5,819)
Trading assets		14,150	13,571
Other assets		205	217
Total assets		124,746	102,540
Trading liabilities:
Total trading liabilities		5,595	4,841
Effect of master netting agreements		(5,817)	(5,415)
Long-term debt		399	387
Total other liabilities – derivative liabilities designated as hedging		964
Total liabilities		6,958	5,835
Assets measured at fair value on a recurring basis | Operating segments | Investment management funds
Trading assets:
Total assets		460	245
Trading liabilities:
Total liabilities		4	1
Assets measured at fair value on a recurring basis | Operating segments | Interest rate contracts
Trading assets:
Effect of master netting agreements		(2,436)	(1,792)
Trading liabilities:
Effect of master netting agreements		(2,680)	(1,986)
Assets measured at fair value on a recurring basis | Operating segments | Foreign exchange contracts
Trading assets:
Effect of master netting agreements		(3,204)	(4,021)
Trading liabilities:
Effect of master netting agreements		(3,134)	(3,428)
Assets measured at fair value on a recurring basis | Operating segments | Equity contracts
Trading assets:
Effect of master netting agreements		0	(6)
Trading liabilities:
Effect of master netting agreements		(3)	(1)
Assets measured at fair value on a recurring basis | Operating segments | Agency RMBS
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		26,437	27,043
Assets measured at fair value on a recurring basis | Operating segments | U.S. Treasury
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		25,137	15,431
Assets measured at fair value on a recurring basis | Operating segments | Sovereign debt/sovereign guaranteed
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		15,887	12,646
Assets measured at fair value on a recurring basis | Operating segments | Agency commercial mortgage-backed securities (“MBS”)
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		9,988	9,417
Assets measured at fair value on a recurring basis | Operating segments | Foreign covered bonds
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		5,519	4,197
Assets measured at fair value on a recurring basis | Operating segments | Supranational
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		5,448	3,709
Assets measured at fair value on a recurring basis | Operating segments | Collateralized loan obligations (“CLOs”)
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		4,432	4,063
Assets measured at fair value on a recurring basis | Operating segments | Foreign government agencies
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		3,578	2,643
Assets measured at fair value on a recurring basis | Operating segments | U.S. government agencies
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		2,806	1,949
Assets measured at fair value on a recurring basis | Operating segments | Other ABS
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		2,743	2,143
Assets measured at fair value on a recurring basis | Operating segments | Non-agency commercial MBS
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		2,630	2,178
Assets measured at fair value on a recurring basis | Operating segments | Commercial paper/certificates of deposit (“CDs”)
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		1,853
Assets measured at fair value on a recurring basis | Operating segments | Non-agency RMBS
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		1,598	1,233
Assets measured at fair value on a recurring basis | Operating segments | State and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		1,179	1,044
Assets measured at fair value on a recurring basis | Operating segments | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		831	853
Assets measured at fair value on a recurring basis | Operating segments | Other debt securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		1	1
Assets measured at fair value on a recurring basis | Operating segments | Not designated as hedging
Trading assets:
Total derivative assets		4,196	3,221
Trading liabilities:
Effect of master netting agreements		(5,817)
Derivative liabilities		2,911	3,184
Assets measured at fair value on a recurring basis | Operating segments | Not designated as hedging | Interest rate contracts
Trading assets:
Total derivative assets		3,065	1,898
Trading liabilities:
Derivative liabilities		1,988	1,264
Assets measured at fair value on a recurring basis | Operating segments | Not designated as hedging | Foreign exchange contracts
Trading assets:
Total derivative assets		1,118	1,310
Trading liabilities:
Derivative liabilities		902	1,912
Assets measured at fair value on a recurring basis | Operating segments | Not designated as hedging | Equity contracts
Trading assets:
Total derivative assets		13	13
Trading liabilities:
Derivative liabilities		21	8
Assets measured at fair value on a recurring basis | Operating segments | Designated as hedging
Trading assets:
Total derivative assets		137	21
Trading liabilities:
Total other liabilities – derivative liabilities designated as hedging			607
Assets measured at fair value on a recurring basis | Operating segments | Designated as hedging | Interest rate contracts
Trading liabilities:
Derivative liabilities		915	350
Assets measured at fair value on a recurring basis | Operating segments | Designated as hedging | Foreign exchange contracts
Trading assets:
Total derivative assets		137	21
Trading liabilities:
Derivative liabilities		49	257
Assets measured at fair value on a recurring basis | Operating segments | Debt instruments
Trading liabilities:
Total trading liabilities		2,664	1,584
Assets measured at fair value on a recurring basis | Operating segments | Equity instruments
Trading liabilities:
Total trading liabilities		20	73
Assets measured at fair value on a recurring basis | Operating segments | Level 1
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		33,707	23,215
Trading assets:
Debt instruments		4,782	1,568
Equity instruments		2,397	4,539
Trading assets		7,186	6,111
Other assets		52	38
Total assets		$ 40,945	$ 29,364
Percentage of total assets prior to netting		31.00%	27.00%
Trading liabilities:
Total trading liabilities		$ 2,617	$ 1,559
Long-term debt		0	0
Total other liabilities – derivative liabilities designated as hedging		0
Total liabilities		$ 2,617	$ 1,559
Percentage of total liabilities prior to netting		20.00%	14.00%
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Investment management funds
Trading assets:
Total assets		$ 416	$ 212
Trading liabilities:
Total liabilities		0	1
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Agency RMBS
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | U.S. Treasury
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		25,137	15,431
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Sovereign debt/sovereign guaranteed
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		8,570	7,784
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Agency commercial mortgage-backed securities (“MBS”)
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Foreign covered bonds
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Supranational
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Collateralized loan obligations (“CLOs”)
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Foreign government agencies
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | U.S. government agencies
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Other ABS
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Non-agency commercial MBS
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Commercial paper/certificates of deposit (“CDs”)
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Non-agency RMBS
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | State and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Other debt securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Not designated as hedging
Trading assets:
Total derivatives fair value		7	4
Trading liabilities:
Total derivatives fair value		8	9
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Not designated as hedging | Interest rate contracts
Trading assets:
Total derivatives fair value		5	4
Trading liabilities:
Total derivatives fair value		7	6
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Not designated as hedging | Foreign exchange contracts
Trading assets:
Total derivatives fair value		0	0
Trading liabilities:
Total derivatives fair value		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Not designated as hedging | Equity contracts
Trading assets:
Total derivatives fair value		2	0
Trading liabilities:
Total derivatives fair value		1	3
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Designated as hedging
Trading assets:
Total derivatives fair value		0	0
Trading liabilities:
Total other liabilities – derivative liabilities designated as hedging			0
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Designated as hedging | Interest rate contracts
Trading liabilities:
Total derivatives fair value		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Designated as hedging | Foreign exchange contracts
Trading assets:
Total derivatives fair value		0	0
Trading liabilities:
Total derivatives fair value		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Debt instruments
Trading liabilities:
Total trading liabilities		2,589	1,477
Assets measured at fair value on a recurring basis | Operating segments | Level 1 | Equity instruments
Trading liabilities:
Total trading liabilities		20	73
Assets measured at fair value on a recurring basis | Operating segments | Level 2
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		76,360	65,335
Trading assets:
Debt instruments		2,775	4,243
Equity instruments		0	0
Trading assets		12,604	13,279
Other assets		153	179
Total assets		$ 89,254	$ 78,814
Percentage of total assets prior to netting		69.00%	73.00%
Trading liabilities:
Total trading liabilities		$ 8,795	$ 8,697
Long-term debt		399	387
Total other liabilities – derivative liabilities designated as hedging		964
Total liabilities		$ 10,158	$ 9,691
Percentage of total liabilities prior to netting		80.00%	86.00%
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Investment management funds
Trading assets:
Total assets		$ 44	$ 33
Trading liabilities:
Total liabilities		4	0
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Agency RMBS
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		26,437	27,043
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | U.S. Treasury
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Sovereign debt/sovereign guaranteed
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		7,317	4,862
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Agency commercial mortgage-backed securities (“MBS”)
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		9,988	9,417
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Foreign covered bonds
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		5,519	4,197
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Supranational
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		5,448	3,709
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Collateralized loan obligations (“CLOs”)
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		4,432	4,063
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Foreign government agencies
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		3,578	2,643
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | U.S. government agencies
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		2,806	1,949
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Other ABS
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		2,743	2,143
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Non-agency commercial MBS
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		2,630	2,178
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Commercial paper/certificates of deposit (“CDs”)
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		1,853
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Non-agency RMBS
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		1,598	1,233
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | State and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		1,179	1,044
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		831	853
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Other debt securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		1	1
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Not designated as hedging
Trading assets:
Total derivatives fair value		9,829	9,036
Trading liabilities:
Total derivatives fair value		8,720	8,590
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Not designated as hedging | Interest rate contracts
Trading assets:
Total derivatives fair value		5,496	3,686
Trading liabilities:
Total derivatives fair value		4,661	3,244
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Not designated as hedging | Foreign exchange contracts
Trading assets:
Total derivatives fair value		4,322	5,331
Trading liabilities:
Total derivatives fair value		4,036	5,340
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Not designated as hedging | Equity contracts
Trading assets:
Total derivatives fair value		11	19
Trading liabilities:
Total derivatives fair value		23	6
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Designated as hedging
Trading assets:
Total derivatives fair value		137	21
Trading liabilities:
Total other liabilities – derivative liabilities designated as hedging			607
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Designated as hedging | Interest rate contracts
Trading liabilities:
Total derivatives fair value		915	350
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Designated as hedging | Foreign exchange contracts
Trading assets:
Total derivatives fair value		137	21
Trading liabilities:
Total derivatives fair value		49	257
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Debt instruments
Trading liabilities:
Total trading liabilities		75	107
Assets measured at fair value on a recurring basis | Operating segments | Level 2 | Equity instruments
Trading liabilities:
Total trading liabilities		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Trading assets:
Debt instruments		0	0
Equity instruments		0	0
Trading assets		0	0
Other assets		0	0
Total assets		$ 0	$ 0
Percentage of total assets prior to netting		0.00%	0.00%
Trading liabilities:
Total trading liabilities		$ 0	$ 0
Long-term debt		0	0
Total other liabilities – derivative liabilities designated as hedging		0
Total liabilities		$ 0	$ 0
Percentage of total liabilities prior to netting		0.00%	0.00%
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Investment management funds
Trading assets:
Total assets		$ 0	$ 0
Trading liabilities:
Total liabilities		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Agency RMBS
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | U.S. Treasury
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Sovereign debt/sovereign guaranteed
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Agency commercial mortgage-backed securities (“MBS”)
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Foreign covered bonds
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Supranational
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Collateralized loan obligations (“CLOs”)
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Foreign government agencies
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | U.S. government agencies
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Other ABS
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Non-agency commercial MBS
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Commercial paper/certificates of deposit (“CDs”)
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Non-agency RMBS
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | State and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Other debt securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available-for-sale		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Not designated as hedging
Trading assets:
Total derivatives fair value		0	0
Trading liabilities:
Total derivatives fair value		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Not designated as hedging | Interest rate contracts
Trading assets:
Total derivatives fair value		0	0
Trading liabilities:
Total derivatives fair value		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Not designated as hedging | Foreign exchange contracts
Trading assets:
Total derivatives fair value		0	0
Trading liabilities:
Total derivatives fair value		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Not designated as hedging | Equity contracts
Trading assets:
Total derivatives fair value		0	0
Trading liabilities:
Total derivatives fair value		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Designated as hedging
Trading assets:
Total derivatives fair value		0	0
Trading liabilities:
Total other liabilities – derivative liabilities designated as hedging			0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Designated as hedging | Interest rate contracts
Trading liabilities:
Total derivatives fair value		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Designated as hedging | Foreign exchange contracts
Trading assets:
Total derivatives fair value		0	0
Trading liabilities:
Total derivatives fair value		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Debt instruments
Trading liabilities:
Total trading liabilities		0	0
Assets measured at fair value on a recurring basis | Operating segments | Level 3 | Equity instruments
Trading liabilities:
Total trading liabilities		0	0
Assets measured at fair value on a recurring basis | Operating segments | NAV
Trading assets:
Assets measured at NAV		$ 187	$ 181

[1] In the first quarter of 2020, we adopted new accounting guidance included in ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, on a prospective basis. See Note 2 of the Notes to Consolidated Financial Statements for additional information.

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Fair value measurement - Certain Items on Recurring Basis (Details) - Assets measured at fair value on a recurring basis - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Non-agency RMBS | Origination in 2004 and Earlier, 2005, 2006 and 2007 through 2020
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 538	$ 640
Non-agency RMBS
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 1,598	$ 1,233
Non-agency RMBS | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	51.00%	25.00%
Non-agency RMBS | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	6.00%	9.00%
Non-agency RMBS | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	2.00%	3.00%
Non-agency RMBS | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	41.00%	63.00%
Non-agency RMBS | 2007-2020
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 938	$ 464
Non-agency RMBS | 2007-2020 | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	82.00%	55.00%
Non-agency RMBS | 2007-2020 | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	1.00%	1.00%
Non-agency RMBS | 2007-2020 | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Non-agency RMBS | 2007-2020 | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	17.00%	44.00%
Non-agency RMBS | 2006
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 250	$ 291
Non-agency RMBS | 2006 | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Non-agency RMBS | 2006 | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	22.00%	21.00%
Non-agency RMBS | 2006 | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Non-agency RMBS | 2006 | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	78.00%	79.00%
Non-agency RMBS | 2005
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 262	$ 305
Non-agency RMBS | 2005 | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	5.00%	5.00%
Non-agency RMBS | 2005 | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	2.00%	2.00%
Non-agency RMBS | 2005 | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	7.00%	8.00%
Non-agency RMBS | 2005 | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	86.00%	85.00%
Non-agency RMBS | 2004 and earlier
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 148	$ 173
Non-agency RMBS | 2004 and earlier | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	21.00%	22.00%
Non-agency RMBS | 2004 and earlier | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	22.00%	24.00%
Non-agency RMBS | 2004 and earlier | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	8.00%	4.00%
Non-agency RMBS | 2004 and earlier | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	49.00%	50.00%
Non-agency commercial MBS | 2009-2020 | Domestic
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 2,630	$ 2,178
Non-agency commercial MBS | 2009-2020 | AAA/ AA- | Domestic
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	98.00%
Non-agency commercial MBS | 2009-2020 | A/ A- | Domestic
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	2.00%
Non-agency commercial MBS | 2009-2020 | BBB/ BBB- | Domestic
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Non-agency commercial MBS | 2009-2020 | BB and lower | Domestic
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign covered bonds
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 5,519	$ 4,197
Foreign covered bonds | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Foreign covered bonds | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign covered bonds | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign covered bonds | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign covered bonds | Canada
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 2,241	$ 1,798
Foreign covered bonds | Canada | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Foreign covered bonds | Canada | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign covered bonds | Canada | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign covered bonds | Canada | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign covered bonds | UK
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 1,093	$ 984
Foreign covered bonds | UK | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Foreign covered bonds | UK | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign covered bonds | UK | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign covered bonds | UK | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign covered bonds | Australia
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 750	$ 431
Foreign covered bonds | Australia | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Foreign covered bonds | Australia | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign covered bonds | Australia | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign covered bonds | Australia | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign covered bonds | Norway
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 533	$ 287
Foreign covered bonds | Norway | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Foreign covered bonds | Norway | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign covered bonds | Norway | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign covered bonds | Norway | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign covered bonds | Germany
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 407	$ 357
Foreign covered bonds | Germany | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Foreign covered bonds | Germany | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign covered bonds | Germany | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign covered bonds | Germany | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign covered bonds | Other
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 495	$ 340
Foreign covered bonds | Other | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Foreign covered bonds | Other | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign covered bonds | Other | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign covered bonds | Other | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 15,887	$ 12,646
Sovereign Debt | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	74.00%	73.00%
Sovereign Debt | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	6.00%	5.00%
Sovereign Debt | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	19.00%	21.00%
Sovereign Debt | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	1.00%	1.00%
Sovereign Debt | Canada
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 502	$ 271
Sovereign Debt | Canada | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Sovereign Debt | Canada | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Canada | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Canada | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | UK
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 3,773	$ 3,318
Sovereign Debt | UK | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Sovereign Debt | UK | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | UK | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | UK | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Germany
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 2,346	$ 1,997
Sovereign Debt | Germany | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Sovereign Debt | Germany | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Germany | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Germany | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | France
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 2,238	$ 1,272
Sovereign Debt | France | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Sovereign Debt | France | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | France | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | France | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Spain
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 1,961	$ 1,453
Sovereign Debt | Spain | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Spain | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	4.00%	6.00%
Sovereign Debt | Spain | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	96.00%	94.00%
Sovereign Debt | Spain | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Italy
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 1,069	$ 1,260
Sovereign Debt | Italy | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Italy | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Italy | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Sovereign Debt | Italy | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Singapore
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 931	$ 742
Sovereign Debt | Singapore | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Sovereign Debt | Singapore | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Singapore | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Singapore | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Ireland
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 676	$ 301
Sovereign Debt | Ireland | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	29.00%	0.00%
Sovereign Debt | Ireland | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	71.00%	100.00%
Sovereign Debt | Ireland | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Ireland | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Netherlands
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 564	$ 791
Sovereign Debt | Netherlands | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Sovereign Debt | Netherlands | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Netherlands | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Netherlands | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Japan
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 434	$ 274
Sovereign Debt | Japan | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Japan | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Sovereign Debt | Japan | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Japan | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Belgium
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 411	$ 79
Sovereign Debt | Belgium | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Sovereign Debt | Belgium | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Belgium | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Belgium | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Austria
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 331	$ 240
Sovereign Debt | Austria | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Sovereign Debt | Austria | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Austria | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Austria | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Hong Kong
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 330	$ 411
Sovereign Debt | Hong Kong | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Sovereign Debt | Hong Kong | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Hong Kong | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Hong Kong | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Sovereign Debt | Other
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 321	$ 237
Sovereign Debt | Other | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	45.00%	39.00%
Sovereign Debt | Other | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	4.00%
Sovereign Debt | Other | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	21.00%	0.00%
Sovereign Debt | Other | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	34.00%	57.00%
Foreign government agencies
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 3,578	$ 2,643
Foreign government agencies | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	95.00%	95.00%
Foreign government agencies | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	5.00%	5.00%
Foreign government agencies | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign government agencies | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign government agencies | Canada
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 321	$ 71
Foreign government agencies | Canada | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	62.00%	0.00%
Foreign government agencies | Canada | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	38.00%	100.00%
Foreign government agencies | Canada | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign government agencies | Canada | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign government agencies | Germany
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 1,398	$ 1,131
Foreign government agencies | Germany | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Foreign government agencies | Germany | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign government agencies | Germany | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign government agencies | Germany | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign government agencies | France
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 281	$ 42
Foreign government agencies | France | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Foreign government agencies | France | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign government agencies | France | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign government agencies | France | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign government agencies | Netherlands
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 730	$ 678
Foreign government agencies | Netherlands | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Foreign government agencies | Netherlands | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign government agencies | Netherlands | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign government agencies | Netherlands | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign government agencies | Other
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 331	$ 274
Foreign government agencies | Other | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	84.00%	79.00%
Foreign government agencies | Other | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	16.00%	21.00%
Foreign government agencies | Other | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign government agencies | Other | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign government agencies | Sweden
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 276	$ 202
Foreign government agencies | Sweden | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Foreign government agencies | Sweden | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign government agencies | Sweden | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign government agencies | Sweden | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign government agencies | Finland
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 241	$ 245
Foreign government agencies | Finland | AAA/ AA-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	100.00%	100.00%
Foreign government agencies | Finland | A/ A-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign government agencies | Finland | BBB/ BBB-
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Foreign government agencies | Finland | BB and lower
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Ratings	0.00%	0.00%
Carrying amount | Sovereign debt/sovereign guaranteed | Sovereign debt/sovereign guaranteed | Brazil
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total carrying value	$ 109	$ 134

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Fair value measurement - Assets on Nonrecurring Basis (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Decrease in fair value of loans of underlying collateral (less than)	$ 1	$ 1
Measured at fair value on a nonrecurring basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans	53	58
Other assets	107	64
Total assets	160	122
Measured at fair value on a nonrecurring basis | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans	0	0
Other assets	0	0
Total assets	0	0
Measured at fair value on a nonrecurring basis | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans	53	58
Other assets	107	64
Total assets	160	122
Measured at fair value on a nonrecurring basis | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans	0	0
Other assets	0	0
Total assets	$ 0	$ 0

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Fair value measurement - Financial Instruments (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Assets:
Securities held-to-maturity	$ 45,983	$ 34,805
Liabilities:
Long-term debt	399	387
Estimated fair value
Assets:
Interest-bearing deposits with the Federal Reserve and other central banks	112,728	95,042
Interest-bearing deposits with banks	18,063	14,832
Federal funds sold and securities purchased under resale agreements	36,638	30,182
Securities held-to-maturity	45,983	34,805
Loans	54,377	54,194
Other financial assets	5,941	6,063
Total assets	273,730	235,118
Liabilities:
Noninterest-bearing deposits	78,100	57,630
Interest-bearing deposits	226,917	200,846
Federal funds purchased and securities sold under repurchase agreements	14,512	11,401
Payables to customers and broker-dealers	25,012	18,758
Commercial paper	665	3,959
Borrowings	1,852	917
Long-term debt	28,875	27,858
Total liabilities	375,933	321,369
Estimated fair value | Level 1
Assets:
Interest-bearing deposits with the Federal Reserve and other central banks	0	0
Interest-bearing deposits with banks	0	0
Federal funds sold and securities purchased under resale agreements	0	0
Securities held-to-maturity	5,815	4,630
Loans	0	0
Other financial assets	4,776	4,830
Total assets	10,591	9,460
Liabilities:
Noninterest-bearing deposits	0	0
Interest-bearing deposits	0	0
Federal funds purchased and securities sold under repurchase agreements	0	0
Payables to customers and broker-dealers	0	0
Commercial paper	0	0
Borrowings	0	0
Long-term debt	0	0
Total liabilities	0	0
Estimated fair value | Level 2
Assets:
Interest-bearing deposits with the Federal Reserve and other central banks	112,728	95,042
Interest-bearing deposits with banks	18,063	14,832
Federal funds sold and securities purchased under resale agreements	36,638	30,182
Securities held-to-maturity	40,168	30,175
Loans	54,377	54,194
Other financial assets	1,165	1,233
Total assets	263,139	225,658
Liabilities:
Noninterest-bearing deposits	78,100	57,630
Interest-bearing deposits	226,917	200,846
Federal funds purchased and securities sold under repurchase agreements	14,512	11,401
Payables to customers and broker-dealers	25,012	18,758
Commercial paper	665	3,959
Borrowings	1,852	917
Long-term debt	28,875	27,858
Total liabilities	375,933	321,369
Estimated fair value | Level 3
Assets:
Interest-bearing deposits with the Federal Reserve and other central banks	0	0
Interest-bearing deposits with banks	0	0
Federal funds sold and securities purchased under resale agreements	0	0
Securities held-to-maturity	0	0
Loans	0	0
Other financial assets	0	0
Total assets	0	0
Liabilities:
Noninterest-bearing deposits	0	0
Interest-bearing deposits	0	0
Federal funds purchased and securities sold under repurchase agreements	0	0
Payables to customers and broker-dealers	0	0
Commercial paper	0	0
Borrowings	0	0
Long-term debt	0	0
Total liabilities	0	0
Carrying amount
Assets:
Interest-bearing deposits with the Federal Reserve and other central banks	112,728	95,042
Interest-bearing deposits with banks	18,045	14,811
Federal funds sold and securities purchased under resale agreements	36,638	30,182
Securities held-to-maturity	44,615	34,483
Loans	54,067	53,718
Other financial assets	5,941	6,063
Total assets	272,034	234,299
Liabilities:
Noninterest-bearing deposits	78,100	57,630
Interest-bearing deposits	227,370	201,836
Federal funds purchased and securities sold under repurchase agreements	14,512	11,401
Payables to customers and broker-dealers	25,012	18,758
Commercial paper	665	3,959
Borrowings	1,852	917
Long-term debt	27,167	27,114
Total liabilities	$ 374,678	$ 321,615

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Fair value option - Assets and Liabilities (Details) - Investment Management funds - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Assets of consolidated investment management funds:
Trading assets	$ 450	$ 229
Other assets	10	16
Total assets	460	245
Liabilities of consolidated investment management funds:
Other liabilities	4	1
Total liabilities	$ 4	$ 1

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Fair value option - Narrative (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Fair Value Disclosures [Abstract]
Fair value option of long-term debt	$ 240
Long-term debt, fair value	$ 399	$ 387

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Fair value option - Changes in Fair Value of Loans and Long-term Debt (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Long-term debt | Foreign exchange and other trading revenue
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gain (loss) change in fair value	$ (2)	$ (10)	$ (7)	$ (12)	$ (12)

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Derivative instruments - Narrative (Details) - USD ($)	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Counterparty default losses recorded	$ 0
Hedging derivatives, maturities, maximum				1 year
Non-derivative financial instruments designated as hedges of net investments in foreign subsidiaries were all long-term liabilities of BNY Mellon in various currencies				$ 172,000,000
Gain or (loss) recognized in income on derivatives	(1,000,000)	$ (15,000,000)	$ (4,000,000)	$ (16,000,000)	$ (10,000,000)
Value-at-risk methodology assumed holding period for instruments				1 day
Value-at-risk methodology confidence level percentage				99.00%
Additional collateral The Bank of New York Mellon would have to post for existing collateral arrangements, if The Bank of New York Mellon had fallen below investment grade	31,000,000			$ 31,000,000		$ 63,000,000
Foreign exchange contracts | Net investment hedging
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Hedged financial instruments, notional amount of derivative	7,600,000,000			7,600,000,000
Foreign exchange contracts | Forecasted Foreign Currency
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Amount of pre-tax gain (loss) to be reclassified in the next 12 months from AOCI to earnings				(3,000,000)
Foreign exchange contracts | Forecasted Foreign Currency | Cash flow hedges
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Hedged financial instruments, notional amount of derivative	312,000,000			$ 312,000,000
Original maturities, maximum, of hedged instruments				12 months
Pre-tax gain (loss) recognized in OCI related to cash flow hedges				$ (3,000,000)
Securities available-for-sale | Interest rate swap
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Hedged financial instruments	13,900,000,000			13,900,000,000
Hedged financial instruments, notional amount of derivative	13,900,000,000			13,900,000,000
Securities available-for-sale | Foreign currency forward
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Hedged financial instruments	131,000,000			131,000,000
Hedged financial instruments, notional amount of derivative	131,000,000			131,000,000
Long-term debt
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Hedged financial instruments	13,900,000,000			13,900,000,000
Long-term debt | Interest rate swap
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Hedged financial instruments, notional amount of derivative	13,900,000,000			$ 13,900,000,000
Original maturities, minimum, of hedged instruments				5 years
Original maturities, maximum, of hedged instruments				30 years
Not Designated as Hedging Instrument, Economic Hedge | Staff expense | Equity Swap
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Gain or (loss) recognized in income on derivatives	$ 28,000,000	$ (41,000,000)	$ 5,000,000	$ (13,000,000)	$ 23,000,000

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Derivative instruments - Gains (Losses) Related to Hedging Derivative Portfolio Recognized in the Income Statement (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Derivative Instruments, Gain (Loss) [Line Items]
(Loss) recognized in the consolidated income statement due to fair value and cash flow hedging relationships	$ (1)	$ (15)	$ (4)	$ (16)	$ (10)
Interest rate contracts | Long-term debt | Interest expense
Derivative Instruments, Gain (Loss) [Line Items]
Gain or (loss) recognized on derivatives	47	714	300	761	485
Gain or (loss) recognized on hedged item	(49)	(708)	(298)	(757)	(482)
Interest rate contracts | Securities available-for-sale | Interest revenue
Derivative Instruments, Gain (Loss) [Line Items]
Gain or (loss) recognized on derivatives	19	(1,033)	(486)	(1,014)	(869)
Gain or (loss) recognized on hedged item	(15)	1,011	480	996	856
FX contracts | Staff expense
Derivative Instruments, Gain (Loss) [Line Items]
Gain or (loss) on cash flow hedges	(3)	1	0	(2)	(1)
FX contracts | Securities available-for-sale
Derivative Instruments, Gain (Loss) [Line Items]
Gain from components excluded from assessment of fair value hedge effectiveness, net	1	1		1	1
FX contracts | Securities available-for-sale | Other revenue
Derivative Instruments, Gain (Loss) [Line Items]
Gain or (loss) recognized on derivatives	5	7	(5)	12	1
Gain or (loss) recognized on hedged item	$ (5)	$ (7)	$ 5	$ (12)	$ 0

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Derivative instruments - Impact of Hedging Derivatives Used in Net Investment Hedging Relationships (Details) - FX contracts - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Derivative Instruments, Gain (Loss) [Line Items]
Gain or (loss) recognized in accumulated OCI on derivatives	$ (45)	$ 437	$ 76	$ 392	$ 70
Net interest revenue
Derivative Instruments, Gain (Loss) [Line Items]
Gain or (loss) reclassified from accumulated OCI into income	$ 0	$ 0	$ 0	$ 0	$ 0

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Derivative instruments - Hedged Items in Fair Value Hedging Relationships (Details) - Fair value hedging - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Long-term debt
Derivative [Line Items]
Carrying amount of hedged asset or liability, Long-term debt	$ 14,956,000,000	$ 13,945,000,000
Hedged liability, discontinued fair value hedge, cumulative decrease	(156,000,000)	(200,000,000)
Hedged liability, fair value hedge, cumulative increase (decrease)	919,000,000	116,000,000
Securities available-for-sale
Derivative [Line Items]
Carrying amount of hedged asset or liability, Available-for-sale securities	13,952,000,000	13,792,000,000
Hedge accounting basis adjustment increase (decrease), Available-for-sale securities	1,817,000,000	687,000,000
Hedge accounting basis adjustment increase (decrease), discontinued hedges	196,000,000	53,000,000
Not designated as hedging | Securities available-for-sale | Foreign exchange contracts
Derivative [Line Items]
Hedged financial instruments, carrying amount	$ 131,000,000	$ 142,000,000

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Derivative instruments - Impact of Derivative Instruments on the Balance Sheet (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Asset derivatives fair value
Total derivatives fair value	$ 9,973	$ 9,061
Effect of master netting agreements	(5,640)	(5,819)
Fair value after effect of master netting agreements	4,333	3,242
Liability derivatives fair value
Total derivatives fair value	9,692	9,206
Effect of master netting agreements	(5,817)	(5,415)
Fair value after effect of master netting agreements	3,875	3,791
Derivative asset, collateral, obligation to return cash, offset	869	1,022
Derivative liability, collateral, right to reclaim cash, offset	1,046	618
Interest rate contracts
Asset derivatives fair value
Effect of master netting agreements	(2,436)	(1,792)
Liability derivatives fair value
Effect of master netting agreements	(2,680)	(1,986)
Foreign exchange contracts
Asset derivatives fair value
Effect of master netting agreements	(3,204)	(4,021)
Liability derivatives fair value
Effect of master netting agreements	(3,134)	(3,428)
Equity contracts
Asset derivatives fair value
Effect of master netting agreements	0	(6)
Liability derivatives fair value
Effect of master netting agreements	(3)	(1)
Designated as hedging
Asset derivatives fair value
Total derivatives fair value	137	21
Liability derivatives fair value
Total derivatives fair value	964	607
Designated as hedging | Interest rate contracts
Notional value
Notional amount of hedge	27,775	28,365
Asset derivatives fair value
Total derivatives fair value	0	0
Liability derivatives fair value
Total derivatives fair value	915	350
Designated as hedging | Foreign exchange contracts
Notional value
Notional amount of hedge	8,040	8,390
Asset derivatives fair value
Total derivatives fair value	137	21
Liability derivatives fair value
Total derivatives fair value	49	257
Not designated as hedging
Asset derivatives fair value
Total derivatives fair value	9,836	9,040
Liability derivatives fair value
Total derivatives fair value	8,728	8,599
Not designated as hedging | Interest rate contracts
Notional value
Notional amount of hedge	217,613	306,790
Asset derivatives fair value
Total derivatives fair value	5,501	3,690
Liability derivatives fair value
Total derivatives fair value	4,668	3,250
Not designated as hedging | Foreign exchange contracts
Notional value
Notional amount of hedge	781,991	848,961
Asset derivatives fair value
Total derivatives fair value	4,322	5,331
Liability derivatives fair value
Total derivatives fair value	4,036	5,340
Not designated as hedging | Equity contracts
Notional value
Notional amount of hedge	1,657	3,189
Asset derivatives fair value
Total derivatives fair value	13	19
Liability derivatives fair value
Total derivatives fair value	22	5
Not designated as hedging | Credit contracts
Notional value
Notional amount of hedge	165	165
Asset derivatives fair value
Total derivatives fair value	0	0
Liability derivatives fair value
Total derivatives fair value	$ 2	$ 4

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Derivative instruments - Revenue from Foreign Exchange and Other Trading (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Foreign exchange	$ 174	$ 253	$ 150	$ 427	$ 310
Other trading revenue	(8)	66	16	58	26
Total foreign exchange and other trading revenue	$ 166	$ 319	$ 166	$ 485	$ 336

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Derivative instruments - Contracts Falling under Early Termination Provisions (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Credit Derivatives [Line Items]
Aggregate fair value of OTC derivatives in net liability positions	$ 5,951	$ 3,442
Collateral posted	6,372	3,671
A3 | A-
Credit Derivatives [Line Items]
Aggregate fair value of OTC derivatives in net liability positions	31	56
Baa2 | BBB
Credit Derivatives [Line Items]
Aggregate fair value of OTC derivatives in net liability positions	558	608
Ba1 | BB plus
Credit Derivatives [Line Items]
Aggregate fair value of OTC derivatives in net liability positions	$ 2,981	$ 2,084

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Derivative instruments - Offsetting (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Derivative Asset
Derivatives subject to netting arrangements, Gross assets recognized	$ 7,584	$ 7,264
Total derivatives subject to netting arrangements, Gross amounts offset in the balance sheet	5,640	5,819
Derivatives subject to netting arrangements, Net assets recognized in the balance sheet	1,944	1,445
Total derivatives, Gross amounts not offset in the balance sheet, Financial instruments	392	251
Total derivatives, Gross amounts not offset in the balance sheet, Cash collateral received	0	0
Derivative assets subject to netting arrangements, Net amount	1,552	1,194
Total derivatives not subject to netting arrangements	2,389	1,797
Total derivatives, Gross assets recognized	9,973	9,061
Fair value after effect of master netting agreements	4,333	3,242
Total derivatives, Net amount	3,941	2,991
Reverse repurchase agreements, Gross assets recognized	72,781	112,355
Reverse repurchase agreements, Gross amounts offset in the balance sheet	48,615	93,794
Reverse repurchase agreements, Net assets recognized on the balance sheet	24,166	18,561
Reverse repurchase agreements, Gross amounts not offset in the balance sheet, Financial instruments	24,140	18,554
Reverse repurchase agreements, Gross amounts not offset in the balance sheet, Cash collateral received	0	0
Reverse repurchase agreements, Net amount	26	7
Securities borrowing, Gross assets recognized	12,472	11,621
Securities borrowing, Net assets recognized on the balance sheet	12,472	11,621
Securities borrowing, Gross amounts not offset in the balance sheet, Financial instruments	11,843	11,278
Securities borrowing, Net amount	629	343
Total, Gross assets recognized	95,226	133,037
Total, Gross amounts offset in the balance sheet	54,255	99,613
Total, Net assets recognized on the balance sheet	40,971	33,424
Total, Gross amounts not offset in the balance sheet, Financial instruments	36,375	30,083
Total, Gross amounts not offset in the balance sheet, Cash collateral received	0	0
Total, Net amount	4,596	3,341
Derivative Liability
Derivatives subject to netting arrangements, Gross liabilities recognized	9,275	8,428
Derivatives subject to netting arrangements, Gross amounts offset in the balance sheet	5,817	5,415
Derivatives subject to netting arrangements, Net liabilities recognized in the balance sheet	3,458	3,013
Total derivatives, Gross amounts not offset in the balance sheet, Financial instruments	2,999	1,615
Total derivatives, Gross amounts not offset in the balance sheet, Cash collateral pledged	0	0
Derivative liabilities subject to netting arrangements, Net amount	459	1,398
Total derivatives not subject to netting arrangements	417	778
Total derivatives, Gross liabilities recognized	9,692	9,206
Fair value after effect of master netting agreements	3,875	3,791
Total derivatives, Net amount	876	2,176
Repurchase agreements, Gross liabilities recognized	59,794	104,451
Repurchase agreements, Gross amounts offset in the balance sheet	48,615	93,794
Repurchase agreements, Net liabilities recognized on the balance sheet	11,179	10,657
Repurchase agreements, Gross amounts not offset in the balance sheet, Financial instruments	11,175	10,657
Repurchase agreements, Gross amounts not offset in the balance sheet, Cash collateral pledged	0	0
Repurchase agreements, Net amount	4	0
Securities lending, Gross liabilities recognized	982	718
Securities lending, Net liabilities recognized on the balance sheet	982	718
Securities lending, Gross amounts not offset in the balance sheet, Financial instruments	962	694
Securities lending, Net amount	20	24
Total, Gross liabilities recognized	70,468	114,375
Total, Gross amounts offset in the balance sheet	54,432	99,209
Total, Net liabilities recognized on the balance sheet	16,036	15,166
Total, Gross amounts not offset in the balance sheet, Financial instruments	15,136	12,966
Total, Gross amounts not offset in the balance sheet, Cash collateral pledged	0	0
Total, Net amount	900	2,200
Interest rate contracts
Derivative Asset
Derivatives subject to netting arrangements, Gross assets recognized	3,549	2,394
Total derivatives subject to netting arrangements, Gross amounts offset in the balance sheet	2,436	1,792
Derivatives subject to netting arrangements, Net assets recognized in the balance sheet	1,113	602
Total derivatives, Gross amounts not offset in the balance sheet, Financial instruments	384	207
Total derivatives, Gross amounts not offset in the balance sheet, Cash collateral received	0	0
Derivative assets subject to netting arrangements, Net amount	729	395
Derivative Liability
Derivatives subject to netting arrangements, Gross liabilities recognized	5,563	3,550
Derivatives subject to netting arrangements, Gross amounts offset in the balance sheet	2,680	1,986
Derivatives subject to netting arrangements, Net liabilities recognized in the balance sheet	2,883	1,564
Total derivatives, Gross amounts not offset in the balance sheet, Financial instruments	2,849	1,539
Total derivatives, Gross amounts not offset in the balance sheet, Cash collateral pledged	0	0
Derivative liabilities subject to netting arrangements, Net amount	34	25
Foreign exchange contracts
Derivative Asset
Derivatives subject to netting arrangements, Gross assets recognized	4,026	4,861
Total derivatives subject to netting arrangements, Gross amounts offset in the balance sheet	3,204	4,021
Derivatives subject to netting arrangements, Net assets recognized in the balance sheet	822	840
Total derivatives, Gross amounts not offset in the balance sheet, Financial instruments	7	44
Total derivatives, Gross amounts not offset in the balance sheet, Cash collateral received	0	0
Derivative assets subject to netting arrangements, Net amount	815	796
Derivative Liability
Derivatives subject to netting arrangements, Gross liabilities recognized	3,690	4,873
Derivatives subject to netting arrangements, Gross amounts offset in the balance sheet	3,134	3,428
Derivatives subject to netting arrangements, Net liabilities recognized in the balance sheet	556	1,445
Total derivatives, Gross amounts not offset in the balance sheet, Financial instruments	150	74
Total derivatives, Gross amounts not offset in the balance sheet, Cash collateral pledged	0	0
Derivative liabilities subject to netting arrangements, Net amount	406	1,371
Equity and other contracts
Derivative Asset
Derivatives subject to netting arrangements, Gross assets recognized	9	9
Total derivatives subject to netting arrangements, Gross amounts offset in the balance sheet	0	6
Derivatives subject to netting arrangements, Net assets recognized in the balance sheet	9	3
Total derivatives, Gross amounts not offset in the balance sheet, Financial instruments	1	0
Total derivatives, Gross amounts not offset in the balance sheet, Cash collateral received	0	0
Derivative assets subject to netting arrangements, Net amount	8	3
Derivative Liability
Derivatives subject to netting arrangements, Gross liabilities recognized	22	5
Derivatives subject to netting arrangements, Gross amounts offset in the balance sheet	3	1
Derivatives subject to netting arrangements, Net liabilities recognized in the balance sheet	19	4
Total derivatives, Gross amounts not offset in the balance sheet, Financial instruments	0	2
Total derivatives, Gross amounts not offset in the balance sheet, Cash collateral pledged	0	0
Derivative liabilities subject to netting arrangements, Net amount	$ 19	$ 2

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Derivative instruments - Secured Borrowings (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	$ 59,794	$ 104,451
Securities lending	982	718
Total borrowings	60,776	105,169
Overnight and continuous
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	55,264	99,953
Securities lending	982	718
Total borrowings	56,246	100,671
Up to 30 days
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	500	1,323
Securities lending	0	0
Total borrowings	500	1,323
30 days or more
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	4,030	3,175
Securities lending	0	0
Total borrowings	4,030	3,175
U.S. Treasury
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	53,359	94,798
U.S. Treasury | Overnight and continuous
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	52,950	94,788
U.S. Treasury | Up to 30 days
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	300	10
U.S. Treasury | 30 days or more
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	109	0
U.S. government agencies
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	642	610
Securities lending	21	19
U.S. government agencies | Overnight and continuous
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	642	594
Securities lending	21	19
U.S. government agencies | Up to 30 days
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	0	16
Securities lending	0	0
U.S. government agencies | 30 days or more
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	0	0
Securities lending	0	0
Agency RMBS
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	1,533	5,008
Agency RMBS | Overnight and continuous
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	1,384	4,234
Agency RMBS | Up to 30 days
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	0	774
Agency RMBS | 30 days or more
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	149	0
Corporate bonds
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	1,490	2,119
Corporate bonds | Overnight and continuous
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	195	266
Corporate bonds | Up to 30 days
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	23	236
Corporate bonds | 30 days or more
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	1,272	1,617
Other debt securities
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	1,921	1,307
Securities lending	191	201
Other debt securities | Overnight and continuous
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	93	40
Securities lending	191	201
Other debt securities | Up to 30 days
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	79	188
Securities lending	0	0
Other debt securities | 30 days or more
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	1,749	1,079
Securities lending	0	0
Equity securities
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	849	609
Securities lending	770	498
Equity securities | Overnight and continuous
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	0	31
Securities lending	770	498
Equity securities | Up to 30 days
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	98	99
Securities lending	0	0
Equity securities | 30 days or more
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Repurchase agreements	751	479
Securities lending	$ 0	$ 0

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Commitments and contingent liabilities - Summary of Off-Balance Sheet Credit Risks, Net of Participations (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Securities lending indemnifications, joint venture	$ 58,000	$ 57,000
Invested in reverse repurchase agreements
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Cash collateral invested in indemnified repurchase agreements	40,000	37,000
Lending commitments
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet credit risks	49,147	49,119
Standby letters of credit
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet credit risks	2,291	2,298
Off-balance sheet credit risks participations	145	146
Commercial letters of credit
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet credit risks	59	74
Securities lending indemnifications
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet credit risks	$ 417,924	$ 408,378

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Commitments and contingent liabilities - Narrative (Details)			6 Months Ended
	Dec. 19, 2019 claim	Dec. 17, 2015 lawsuit	Jun. 30, 2020 USD ($) claim	Dec. 31, 2019 USD ($)	Dec. 31, 2009 claim
Commitments and Contingencies Disclosure [Line Items]
Lending commitment maturing in less than one year			$ 32,600,000,000
Lending commitment maturing in one to five years			16,200,000,000
Lending commitment maturing over five years			$ 319,000,000
Collateralization percentage generally required for a securities lending transaction with indemnification against broker default			102.00%
Securities lending indemnifications, secured amount of collateral			$ 438,000,000,000	$ 428,000,000,000
Securities lending indemnifications, joint venture			58,000,000,000	57,000,000,000
Securities lending indemnifications, collateral joint venture			$ 62,000,000,000	61,000,000,000
Matters Related to R. Allen Stanford
Commitments and Contingencies Disclosure [Line Items]
Number of lawsuits or class actions pending | claim					2
Number of claims dismissed | claim	6
Number of lawsuits filed | claim			13
Brazilian Postalis Litigation
Commitments and Contingencies Disclosure [Line Items]
Number of lawsuits filed | lawsuit		3
Maximum
Commitments and Contingencies Disclosure [Line Items]
Loss contingency, aggregate range of reasonable loss (up to)			$ 730,000,000
Standby letters of credit
Commitments and Contingencies Disclosure [Line Items]
Standby letters of credit (SBLC) collateralized with cash and securities			185,000,000	184,000,000
SBLC expiring within one year			1,700,000,000
SBLC expiring within one to five years			545,000,000
SBLC expiring after five years			7,000,000
Off-balance sheet credit risks			2,291,000,000	2,298,000,000
Commercial letters of credit
Commitments and Contingencies Disclosure [Line Items]
Off-balance sheet credit risks			59,000,000	74,000,000
Unsettled Repurchase Agreements
Commitments and Contingencies Disclosure [Line Items]
Guarantor obligations, maximum exposure, undiscounted			0
Unsettled Reverse Repurchase Agreements
Commitments and Contingencies Disclosure [Line Items]
Guarantor obligations, maximum exposure, undiscounted			0
Operating segments
Commitments and Contingencies Disclosure [Line Items]
Allowance for credit losses on lending related commitments			$ 152,000,000	$ 94,000,000
Federal Court | Mortgage-Securitization Trusts Proceedings
Commitments and Contingencies Disclosure [Line Items]
Number of lawsuits or class actions pending | claim			4
State Court | Mortgage-Securitization Trusts Proceedings
Commitments and Contingencies Disclosure [Line Items]
Number of lawsuits or class actions pending | claim			1

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Commitments and contingent liabilities - Standby Letters of Credits by Investment Grade (Details) - Standby letters of credit	Jun. 30, 2020	Dec. 31, 2019
Investment grade
Concentration Risk [Line Items]
Standby letters of credit by investment grade	89.00%	90.00%
Non-investment grade
Concentration Risk [Line Items]
Standby letters of credit by investment grade	11.00%	10.00%

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Commitments and contingent liabilities - Significant Industry Concentrations Related to Credit Exposure (Details) $ in Billions	Jun. 30, 2020 USD ($)
Financial institutions
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Loans	$ 10.8
Unfunded commitments	35.5
Total exposure	46.3
Financial institutions | Securities industry
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Loans	1.6
Unfunded commitments	24.5
Total exposure	26.1
Financial institutions | Banks
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Loans	7.0
Unfunded commitments	1.1
Total exposure	8.1
Financial institutions | Asset managers
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Loans	1.3
Unfunded commitments	6.3
Total exposure	7.6
Financial institutions | Insurance
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Loans	0.1
Unfunded commitments	2.7
Total exposure	2.8
Financial institutions | Government
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Loans	0.1
Unfunded commitments	0.2
Total exposure	0.3
Financial institutions | Other
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Loans	0.7
Unfunded commitments	0.7
Total exposure	1.4
Commercial
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Loans	2.4
Unfunded commitments	11.8
Total exposure	14.2
Commercial | Manufacturing
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Loans	1.1
Unfunded commitments	3.5
Total exposure	4.6
Commercial | Services and other
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Loans	1.1
Unfunded commitments	3.3
Total exposure	4.4
Commercial | Energy and utilities
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Loans	0.1
Unfunded commitments	4.1
Total exposure	4.2
Commercial | Media and telecom
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Loans	0.1
Unfunded commitments	0.9
Total exposure	$ 1.0

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Lines of business - Narrative (Details)	6 Months Ended
	Jun. 30, 2020 business
Segment Reporting [Abstract]
Number of principal businesses (business)	2

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Supplemental information to the Consolidated Statement of Cash Flows (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Supplemental Cash Flow Information [Abstract]
Change in assets of consolidated investment management funds	$ 215	$ 76
Change in liabilities of consolidated investment management funds	3	4
Change in nonredeemable noncontrolling interests of consolidated investment management funds	10	65
Securities purchased not settled	1,730	1,113
Securities matured not settled	0	10
Premises and equipment/capitalized software funded by finance lease obligations	0	14
Premises and equipment/operating lease obligations	66	1,272
Investment redemptions not settled	$ 0	$ 0

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Lines of business - Contribution of Segments to Overall Profitability (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020		Jun. 30, 2019
Segment Reporting Information [Line Items]
Total fee and other revenue	$ 3,176	$ 3,332	$ 3,112	$ 6,508		$ 6,144
Net interest revenue (expense)	780	814	802	1,594		1,643
Provision for credit losses	143	169	(8)	312	[1]	(1)	[1]
Income from consolidated investment management funds, net of noncontrolling interests	950	980	1,017	1,930		1,963
Investment income (loss), net	54	(38)	10	16		36
Net income (loss) attributable to noncontrolling interests	15	(18)	4	(3)		14
Operating segments
Segment Reporting Information [Line Items]
Total fee and other revenue	3,215	3,312	3,118	6,527		6,166
Net interest revenue (expense)	780	814	802	1,594		1,643
Total revenue	3,995	4,126	3,920	8,121		7,809
Provision for credit losses	143	169	(8)	312		(1)
Noninterest expense	2,686	2,712	2,647	5,398		5,346
Income (loss) before taxes	$ 1,166	$ 1,245	$ 1,281	$ 2,411		$ 2,464
Pre-tax operating margin	29.00%	30.00%	33.00%	30.00%		32.00%
Average assets	$ 415,359	$ 385,278	$ 342,384	$ 400,318		$ 339,292
Operating segments | Investment Services
Segment Reporting Information [Line Items]
Total fee and other revenue	2,339	2,436	2,233	4,775		4,394
Net interest revenue (expense)	768	806	783	1,574		1,587
Total revenue	3,107	3,242	3,016	6,349		5,981
Provision for credit losses	145	149	(4)	294		4
Noninterest expense	1,989	1,987	1,963	3,976		3,944
Income (loss) before taxes	$ 973	$ 1,106	$ 1,057	$ 2,079		$ 2,033
Pre-tax operating margin	31.00%	34.00%	35.00%	33.00%		34.00%
Average assets	$ 335,288	$ 304,089	$ 264,781	$ 319,689		$ 260,432
Operating segments | Investment and Wealth Management
Segment Reporting Information [Line Items]
Total fee and other revenue	838	846	854	1,684		1,723
Net interest revenue (expense)	48	52	59	100		126
Total revenue	886	898	913	1,784		1,849
Provision for credit losses	7	9	(2)	16		(1)
Noninterest expense	658	695	655	1,353		1,324
Income (loss) before taxes	$ 221	$ 194	$ 260	$ 415		$ 526
Pre-tax operating margin	25.00%	22.00%	29.00%	23.00%		28.00%
Average assets	$ 30,327	$ 30,543	$ 29,793	$ 30,435		$ 30,819
Income from consolidated investment management funds, net of noncontrolling interests	39	(20)	6	19		22
Investment income (loss), net	54	(38)	10	16		36
Net income (loss) attributable to noncontrolling interests	15	(18)	4	(3)		14
Operating segments | Other
Segment Reporting Information [Line Items]
Total fee and other revenue	38	30	31	68		49
Net interest revenue (expense)	(36)	(44)	(40)	(80)		(70)
Total revenue	2	(14)	(9)	(12)		(21)
Provision for credit losses	(9)	11	(2)	2		(4)
Noninterest expense	39	30	29	69		78
Income (loss) before taxes	(28)	(55)	(36)	(83)		(95)
Average assets	$ 49,744	$ 50,646	$ 47,810	$ 50,194		$ 48,041

[1] In the first quarter of 2020, we adopted new accounting guidance included in ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, on a prospective basis. See Note 2 of the Notes to Consolidated Financial Statements for additional information.

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Supplemental information to the Consolidated Statement of Cash Flows - Footnote (Details) - USD ($) $ in Millions	6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019	Dec. 31, 2018
Lessee, Lease, Description [Line Items]
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201613Member	us-gaap:AccountingStandardsUpdate201602Member	us-gaap:AccountingStandardsUpdate201613Member	us-gaap:AccountingStandardsUpdate201802Member
Premises and equipment/operating lease obligations	$ 66	$ 1,272
New or Modified Leases
Lessee, Lease, Description [Line Items]
Premises and equipment/operating lease obligations		28
Cumulative Effect, Period Of Adoption, Adjustment
Lessee, Lease, Description [Line Items]
Premises and equipment/operating lease obligations		$ 1,244

XML

Label	Element	Value
Restricted Cash and Cash Equivalents	us-gaap_RestrictedCashAndCashEquivalents	$ 2,036,000,000
Restricted Cash and Cash Equivalents	us-gaap_RestrictedCashAndCashEquivalents	2,210,000,000
Cash and Cash Equivalents, at Carrying Value	us-gaap_CashAndCashEquivalentsAtCarryingValue	4,776,000,000
Cash and Cash Equivalents, at Carrying Value	us-gaap_CashAndCashEquivalentsAtCarryingValue	$ 5,556,000,000