MARCH 2015 THE BANK OF NEW YORK MELLON Q1 2010 Investor Presentation - - PowerPoint PPT Presentation

Q1 2010 Investor Presentation

MARCH 2015 THE BANK OF NEW YORK MELLON

Q1 2010 Investor Presentation

Disclaimer

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Q1 2010 Investor Presentation

Table of Contents

I. Executive Summary II. Good Franchise In A Historically Good Business III. The World Has Changed

• IV. Poor Management Through A Changing Environment

V. No New Ideas For A Better Future

• VI. Case Study: JPM 2015 Investor Day
• VII. Unlocking Potential: Bold Action and New Ideas
• A. Common Sense Principles

B.

Business Opportunities

• VIII. Unlocking Potential: New Leadership

IX. Valuation

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Q1 2010 Investor Presentation

• I. Executive Summary

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Q1 2010 Investor Presentation

Executive Summary

• 1. BNY Mellon has a good franchise in what has been a good business
• 2. But the world has changed...

i. Low rates and volatility pressuring revenues (permanent?) ii. Regulatory environment imposing new capital charges and

• perating burdens (permanent)
• 3. Management has done a poor job creating value through this

changing environment and offers no new ideas for facing current and future challenges

• 4. BNY Mellon will not reach its potential with small, incremental

adjustments but requires bold action and new ideas

• 5. New leadership will be necessary to conceive and execute the

strategies necessary to compete in this new world

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Q1 2010 Investor Presentation

Executive Summary New Leadership Will Have Numerous Opportunities For Improvement:

• 1. Reconsider Value Proposition to Core Investment Servicing Customers
• 2. Raise IT Effectiveness to Top Company Priority
• 3. Reduce Headcount Aggressively
• 4. Reposition Asset Management
• 5. Establish Culture of Effectiveness, Urgency, and Accountability
• 6. Upgrade Regulatory Sophistication and Outreach
• 7. Refresh the Bank of New York Brand

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Successful execution against this plan will produce a more powerful franchise with higher growth, a more efficient expense base, higher returns on capital, and a market value that is more than double the current price

Q1 2010 Investor Presentation

• II. Good Franchise In A Historically Good Business

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Q1 2010 Investor Presentation

Leading Market Share in a Concentrated Industry

BK is a leading global custodian and operates in an industry dominated by three major global custodians (BNY Mellon, State Street, JP Morgan) Large client base drives high transaction volumes and economies of scale

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Global Assets Under Custody Global Assets Under Administration

BNY Mellon, 19% State Street, 14% JP Morgan, 14% Citi, 10% BNP Paribas, 6% Other, 37% State Street, 22% JP Morgan, 22% BNY Mellon, 11% HSBC, 9% IFDS, 6% Other, 30%

~$150 trillion market ~$30 trillion market

Q1 2010 Investor Presentation

Mission Critical, Trust-based Services To Customers Create Barriers to Entry

Large providers can leverage economies of scale to deliver custody services at significantly lower costs than small competitors Custody involves large fixed costs to build out each processing service for the first customer

• f that service

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Economies of Scale

Preference to centralize back office with a single custody bank provider to maintain centralized oversight of operations Customers build their back-office infrastructure around the custodian Significant time and resources required to establish a custodial service relationship (3 month

• n-boarding process)

Low customer attrition with average asset servicing relationships greater than a decade Legally enforceable multiyear service contracts Mission critical services at a small price in relation to the assets of its clients (.01% of assets)

High Switching Costs / Sticky Client Relationships

Q1 2010 Investor Presentation

Investment Servicing is a Business Process Outsourcing (“BPO”) Service

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Traditional Business Process Outsourcer Asset Custodian

Specialization In Non-core Processes Yes Yes Fixed-to-Variable Cost Conversion Yes Yes Offshore Labor Inputs Yes Yes Technology-Based Solutions Yes Yes Differentiation Through Service Quality Yes Yes Multi-year Contracts Yes Yes

Q1 2010 Investor Presentation

Attractive Fee-Based Business Model

BK primarily generates revenue from fees rather than net interest margin Counter-cyclical elements in fee revenue mitigate the impact of severe market downturns and provide earnings stability

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Revenue Mix(1)

Total Fee Revenue (2008 Financial Crisis)

$11,897 $12,342 $4,000 $7,000 $10,000 $13,000 2007 2008

Securities servicing Asset and wealth management FX and other trading activities Other

• 8%

+62%

• 10%

+6%

FX volatility Securities lending spreads and volumes

+4% Asset management fees 26% Investment servicing fees 52% Net interest revenue 19% Other 3%

Q1 2010 Investor Presentation

Positive Long-term Growth Dynamics

BK should benefit from the long-term global growth of financial assets, growing diversity of financial instruments, rising regulatory complexity and increasing cross-border activity

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Global Financial Assets ($tn)

$221 $273 $393 $494 $600 $730 $900 $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 1990 1995 2000 2005 2010 2015 2020 Developing Advanced CAGR % (’90 – ’10) (’10 – ’20) +5% +5% +8% +4% +3% +9%

Q1 2010 Investor Presentation

Conservative Balance Sheet

BK’s balance sheet is primarily comprised of low-risk, short-duration assets Loan accounts are a small and declining mix of total interest-earning assets Low-yielding cash and interbank investments have accumulated on the balance sheet

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Mix of Average Interest-Earning Assets

29% 38% 44% 44% 48% 43% 43% 45% 2% 1% 1% 2% 1% 2% 2% 2% 32% 30% 32% 34% 32% 38% 37% 35% 37% 31% 23% 21% 18% 17% 18% 18% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2007 2008 2009 2010 2011 2012 2013 2014 Cash / interbank investments Trading account securities Securities Loans

Q1 2010 Investor Presentation

Conservative Balance Sheet: High-Quality Assets

BK’s loan portfolio has consistently experienced less charge-offs through a cycle than a typical commercial bank BK’s investment securities portfolio primarily consists of high-quality AAA / AA- rated securities

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Loan Portfolio: Net Charge Off Ratio %

Investment Securities Portfolio: Ratings Mix

87% 86% 87% 89% 89% 89% 90% 5% 3% 2% 5% 6% 5% 4% 8% 11% 11% 6% 5% 6% 6% 0% 20% 40% 60% 80% 100% 2008 2009 2010 2011 2012 2013 2014 AAA / AA- A+ / A- Other – 1.0% 2.0% 3.0% 4.0% 2008 2009 2010 2011 2012 2013 2014 BK BAC WFC JPM

Q1 2010 Investor Presentation

Conservative Balance Sheet: Liabilities

BK’s assets are primarily funded by low-cost custody deposits, a high-quality wholesale funding source that has proven to be stable and predictable Custody deposits are attractive funding sources because they originate from very sticky custody relationships with high switching costs

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Deposits

$66 $92 $98 $104 $125 $134 $152 $161 $22 – $34 $36 $35 $58 $70 $73 $88 $92 $132 $141 $160 $192 $222 $234 79% 60% 82% 81% 72% 77% 81% 77% – 10% 20% 30% 40% 50% 60% 70% 80% 90% – $50 $100 $150 $200 $250 $300 $350 $400 2007 2008 2009 2010 2011 2012 2013 2014 Interest-Earning Assets % of Deposits Total Deposits Interest-bearing deposits Noninterest-bearing deposits Deposits / Interest-earning assets

Q1 2010 Investor Presentation

Conservative Balance Sheet: Safe Haven

BK has experienced deposit inflow surges during market crises because clients view BK’s balance sheet as a safe haven

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September 2001 Attack Lehman Brothers Bankruptcy US Debt Ceiling 2011 US Fiscal Cliff 2012

$54 $53 $61 $57 $120 $140 $145 $132 $169 $199 $207 $192 $208 $223 $218 – $50 $100 $150 $200 $250 1Q01 2Q01 3Q01 4Q01 3Q08 4Q08 1Q09 2Q09 2Q11 3Q11 4Q11 1Q12 3Q12 4Q12 1Q13

Q1 2010 Investor Presentation

0.5% 2.5% 4.5% 6.5% 8.5% 10.5% 12.5% 14.5% 16.5% 18.5% 1Q04 3Q04 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14

High Capital Ratios

BK’s Tier 1 capital ratio has approached multi-year highs

Tier 1 Capital Ratio

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Consolidation of certain investment management funds(1)

Q1 2010 Investor Presentation

Attractive Balance Sheet: Stress Test Performance

BK’s business model performs well in government stress tests

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Q1 2010 Investor Presentation

• III. The World Has Changed

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Q1 2010 Investor Presentation

Net Interest Margin Pressure

Net Interest Margin (FTE) % BK’s earnings are cyclically pressured by decade-low net interest margins due to a prolonged period of low global interest rates and a growing mix of excess deposits on the balance sheet Low global interest rates depress net interest revenue, depress trading volatility, increase money market fee waivers, and depress securities lending spreads

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0.50% 0.70% 0.90% 1.10% 1.30% 1.50% 1.70% 1.90% 2.10% 2.30% 2.50% 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14

Q1 2010 Investor Presentation NIM % 91 bps 138 bps 170 bps Average Fed Funds Rate % 9 bps 213 bps 302 bps Incremental EPS @ 27% tax rate $0.74 $1.40 (x) P/E 15.0x 15.0x Incremental Value Per Share $11.07 $20.95 $2,904 $3,950 $4,884 – $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 LQA 2017E FFER +25bps/qtr (2Q15 - 2017) 2017E "Fed Dots" Average Net Interest Revenue

Net Interest Revenue Upside

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BK can create $11 - $21 per share of incremental value by 2017 from incremental net interest revenue depending on the pace of short-term interest rate normalization Net Interest Revenue Sensitivity

Q1 2010 Investor Presentation

+ 100bps rate "ramp" $149 $326 LTM Net Interest Revenue (FTE) $2,433 $2,942 % Upside 6.1% 11.1% BNY Mellon Has Greater Rates Leverage than State Street

Net Interest Revenue Sensitivity

Impact on current net interest revenue over the next 12 months based on a quarterly 25 bps increase in global interest rates over the next four quarters (Company internal estimates)

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Q1 2010 Investor Presentation

50 100 150 200 250 300 350 TED Spread

5 10 15 20 25 JPM G7 Volatility Index

Securities Lending and FX Volatility

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Higher interest rates may also potentially drive improvements in securities lending and FX trading revenues

Indexed Ted Spread (3 Mo. LIBOR – T. Bills) FX Volatility

“The Fed Funds Rate has a big impact on the TED spread, which has a big impact on our securities lending activity...when rates eventually go up and you get back to the more normalized TED spread, this will be a much more attractive business financially”

• Bob Kelly, CEO, 3/2/10 CLSA Analyst Day

Averages: 2001 – Present: 42 2001 – 2007: 36 2009 – Present: 30 ~25

FX volatility now at all-time lows over the past 20 years As interest rates rise and rate differentials increase, customers increase their use of carry trade strategies higher FX volumes

Q1 2010 Investor Presentation

Money Market Fee Waivers

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Higher interest rates will also recover significant money market fee waivers

Pre-tax Money Market Fee Waivers Fee Waiver Recovery

Q1 2010 Investor Presentation

A Changing Regulatory Landscape

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Basel Capital Ratios Stress Testing (CCAR/ DFAST) Dodd-Frank Supplementary Leverage Ratio (SLR) Liquidity Coverage Ratio (LCR) European Market Infrastructure Regulation (EMIR) Volcker Rule Recovery and Resolution Plans Foreign Account Tax Compliance Act (FATCA) Markets in Financial Instruments Directive (MiFID) Target2 Securities (T2S) Alternative Investment Fund Managers Directive (AIFMD) Tri-party Repo Reforms Money Market Fund Reforms Data Management Standards Net Stable Funding Ratio (NSFR) Total Loss Absorbing Capital (TLAC) G-SIB Surcharges

Past Present Future Key Regulations

Q1 2010 Investor Presentation

Key Business Model Implications

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New Regulations Key Implications

Supplementary Leverage Ratio (SLR) Higher capital retention, “low risk” assets need to generate higher returns, trading book contraction, deposit reduction and management, higher compliance costs, Liquidity Coverage Ratio (LCR) Lower NIM yields, reallocation of balance sheet towards HQLA, reduced appetite for non-operational deposits, liability

• ptimization, higher compliance costs

Stress-Testing (CCAR / DFAST) Regulatory scrutiny of capital return policies, higher capital ratios, tighter risk management practices, higher compliance costs Basel III Higher capital ratios, more onerous capital definitions and risk- weightings, less leverage, capital penalties for size, complexity and interconnectedness Tri-party Repo Reform Lower intraday credit risk, higher compliance costs Resolution Plans Higher compliance costs

More Capital & Reduced Leverage Higher Compliance Expenses Lower Market, Credit & Operational Risk

Reduced Size & Complexity

Q1 2010 Investor Presentation

109% 100% – 25% 50% 75% 100% 125% 150% BK Projected Regulatory 3.0% 2.0% 1.0% 4.4% 6.0% – 2.0% 4.0% 6.0% 8.0% BK @ 4Q14 Projected Regulatory 4.5% 2.5% 1.0% 0.5% 9.8% 8.5% – 3.0% 6.0% 9.0% 12.0% 15.0% BK @ 4Q14 Projected Regulatory

Rising Capital and Liquidity Requirements By 2019

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CET1 SLR LCR

Q1 2010 Investor Presentation

Key Business Model Implications

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Whether or not the rate / volatility environment ever returns to historical levels, the new regulatory world requires BNY Mellon to reconsider many aspects of the Company:

Business Lines Geographical Mix Client Selection & Economics Asset Mix Labor Mix Deposit & Liability Structure

Q1 2010 Investor Presentation

• IV. Poor Management Through A Changing

Environment

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Q1 2010 Investor Presentation

2007 Mellon Merger Has Failed to Deliver on Promises

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Q1 2010 Investor Presentation

2007 Mellon Merger Has Failed to Deliver on Promise

In its 12/4/2006 presentation on the merger with Mellon Financial (Mellon M&A Presentation), BK

• utlined a path towards $3.38 in cash EPS by 2009

BK only achieved $2.56 of cash EPS in 2014 (24% below 2009 targets, 5 years later)

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12/4/06 Mellon M&A Presentation – EPS Targets

Q1 2010 Investor Presentation

17% 2% – 4% 8% 12% 16% 20% 24% 10% 4% – 4% 8% 12% 16% 20% 24%

Dubious Claimed Merger Synergies

BK claims it achieved $850mm of expense synergies and $325 - $425mm of revenue synergies from the Mellon merger (claiming that it even exceeded its initial goals) Despite claimed synergies, revenue growth has been tepid and actual expenses have significantly outgrown revenues Claimed synergies are dubious, as gross expenses would have massively outgrown revenues without synergy benefits

2007 Mellon Merger Targets

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Without “Alleged” Synergies(3) Actual Results Core Revenues Core Expenses Core Revenues Core Expenses 6% ∆ 15% ∆

Mellon merger synergies are unobservable based on post-merger results

FY2007 – FY2014 Total Growth %

Q1 2010 Investor Presentation

Noninterest Expense Has Grown Unsustainably

Margins have deteriorated as noninterest expense has grown rapidly against stagnant fee revenue

Noninterest Expense % of Fee Revenue(1)

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77% 88% 87% 89% 92% 93% 91% 70% 75% 80% 85% 90% 95% 2008A 2009A 2010A 2011A 2012A 2013A 2014A

Q1 2010 Investor Presentation

$14.0 $14.6 $10.0 $11.0 $12.0 $13.0 $14.0 $15.0 $16.0 2007 2014

Unabated Headcount Growth

Headcount has grown disproportionately versus revenues since the Mellon merger (22% total growth in headcount vs. 4% total growth in “Core” Revenue)

Total Headcount “Core” Revenue(2) ($bn)

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41,200 50,300 25,000 30,000 35,000 40,000 45,000 50,000 55,000 2007 2014

Q1 2010 Investor Presentation

Technology Fragmentation Is A Key Source of Excess Costs

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“And I think I’ve mentioned about the challenges with the merger & acquisitions is we have so many different fragmented technology in various businesses and various products...I think the nature of the acquisitions have resulted in lots of fragmentation of technology”

• Suresh Kumar, BNY Mellon CTO, 3/13/13

Two Custody Platforms Five Accounting Platforms Major Redundancies

• Back office headcount
• Systems maintenance
• Application development
• Reporting costs

“The traditional approach for any of these acquisitions is steeped in the thesis that you’ll see more synergies the more simplified your back end, and the more common systems you share, especially those that benefit from scale. That’s been time-tested in the trust banking business”

• Tim Keaney, Former BNY Mellon CEO Investment Services, 2010(1)

“One of the things that is really setting us apart [from our competitors] post-transformation is the fact that we do have one global platform...When we spend dollars to build the future functionality, we do it once. And then we leverage it across the world. If you have six accounting platforms and you were doing a regulatory change six times, that’s 1/6 the IT efficiency”

• Gunjan Kedia, State Street EVP, 2/25/15

Q1 2010 Investor Presentation

Costly M&A Activity

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BK’s heavy cost structure reflects the significant M&A activity the Company has undertaken over the years Portsmouth Financial Systems BHF Asset Servicing

2007 2008 2009 2010 2011 2012 2013 2014

Broker-Dealer Global Securities Services

Mellon Financial has not been fully integrated seven years after the acquisition

Q1 2010 Investor Presentation

Gerald Hassell’s 2011 Investor Day Targets Have Failed to Materialize

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Q1 2010 Investor Presentation

'14A $2.56 '14A $2.56 $2.42 $2.52 $2.49 $2.96 $3.31 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 2011A 2012A 2013A 2014 (@7%) 2014 (@11%)

Missed EPS Targets: 2011 Investor Day

In BK’s 11/14/11 Investor Day, CEO Gerald Hassell provided a roadmap for 7 – 11% EPS growth between 2011 and 2014 BK fell significantly short of even the low-end of its 2014 EPS targets

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2011 Investor Day Earnings Roadmap Cash EPS Bridge to 2011 Investor Day Target

Q1 2010 Investor Presentation

9.0% 8.8% 8.3% 8.1% 7.0% 7.5% 8.0% 8.5% 9.0% 9.5% 10.0% 10.5% 2011 2012 2013 2014

Missed ROE Targets: 2011 Investor Day

In BK’s 11/14/11 Investor Day, BK Management also targeted a 10% ROE by FY14 BK fell significantly short of this 10% ROE target in 2014 ROE has deteriorated significantly since 2011

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BK Return on Equity %(1) ROE Gap

Q1 2010 Investor Presentation

100 104 103 106 100 105 118 132 50 75 100 125 150 2011 2012 2013 2014 9.0% 8.8% 8.3% 8.1% 10.0% 10.3% 10.5% 9.8% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 2011 2012 2013 2014

BNY Mellon Has Underperformed State Street on Key Targets

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Indexed EPS Growth(1) Return on Equity(2)

BK STT

While BK’s results have significantly deteriorated, State Street’s results have significantly improved

Q1 2010 Investor Presentation

Flat EPS Growth Despite Certain Beneficial Market Tailwinds

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“Using the S&P 500 Index as a proxy for the global equity markets, we estimate that a 100-point change in the value of the S&P 500 Index, sustained for one year, would impact...” ─ “...fully diluted earnings per common share by $0.03 to $0.05” (BK 2011 Annual Report) ─ “...fully diluted earnings per common share by $0.03 to $0.05” (BK 2012 Annual Report) ─ “...fully diluted earnings per common share by $0.02 to $0.04” (BK 2013 Annual Report) ─ “...fully diluted earnings per common share by $0.02 to $0.04” (BK 2014 Annual Report)

Indexed Growth (FY2011 = 100): BK EPS Growth vs. Market Indices Growth

152 134 118 107 106 90 100 110 120 130 140 150 160 2011 2012 2013 2014 S&P 500 Index MSCI World Index FTSE 100 Index Barclays Capital Global Aggregate Bond Index BNY Mellon LTM EPS

Q1 2010 Investor Presentation

Margins have deteriorated despite “Operational Excellence Initiatives”, where BK laid out savings targets of $650 - $700mm by 2015 BK claims that has significantly exceeded its targets through 2013 but there is no

• bservable evidence in support of this claim

Unobservable “Cost Reductions”

2011 Operational Excellence Targets

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Q1 2010 Investor Presentation

2% 5% 12% (1%) 3% 7% 11% 15% Revenue Expenses, net Expenses, gross

Total Growth (2011 - 2014)

Expense Growth Does Not Show Evidence of Initiatives

Claimed cost savings imply gross expenses between 2011 and 2013 would have grown by $1.2bn (or ~12%) if management did not execute its “Operational Excellence” initiatives and achieve M&A synergies Revenue has barely grown over the same time period

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2011 – 2014 Total Growth %

(1) (2) (3)

Q1 2010 Investor Presentation

Implied Headcount (Asset Manager + Asset Servicer) Asset Managers

Capital JPM Vanguard BLK BEN Group GIM (2) PIMCO

AUC/A ($tn) $29 $28 $21 AUM ($bn) $1,710 $3,100 $4,652 $898 $1,147 $792 $747 $1,744 $709 $2,480 $1,680 $363

STT (IS) JPM (TSS)

Asset Servicers

32,700 29,490 29,960 33,170 41,670 39,670 36,736 34,470 41,200 39,200 36,266 34,000

50,300 27,470 ~27,000 ~14,200 12,200 9,266 ~7,000 6,264 5,870 5,700 3,100 ~2,500 2,490 1,435

– 10,000 20,000 30,000 40,000 50,000 60,000 BK STT (Inv. Serv.) JPM (TSS) Vanguard BLK BEN Capital Group IVZ TROW JPM (Global Inv. Mgmt.) LM STT (Inv. Mgmt.) PIMCO FII

Total Employees

Bloated Employee Base

Headcount disproportionate to that of comparable companies ■ Combinations of similar sized investment managers and investment servicers would imply meaningfully lower headcount levels ■ Headcount discrepancy not bridgeable by BK’s Corporate Trust or Pershing business units

Total Employees

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Investment Managers Investment Servicers

Q1 2010 Investor Presentation

$0.250 $0.280 $0.310 $0.340 $0.370 $0.400 2009 2010 2011 2012 2013 2014 Core Revenue / Average Employee ($bn) BK STT

BK’s ever-deepening gap of core revenues / average employee in comparison to State Street show significant increasing employee inefficiency

Employee Inefficiency

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Core Revenue / Average Employee(1)

Q1 2010 Investor Presentation

104% 103% 94% 78% 96% 93%

75% 80% 85% 90% 95% 100% 105% 110% 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14

Indexed Headcount

BNY Mellon State Street JP Morgan (CIB = TSS + IB) Bank of America Goldman Sachs Citigroup

Relative Headcount Trajectory

While macroeconomic factors and regulatory compliance have pressured headcount and costs for all G-SIB banks, BK has responded least forcefully to headcount

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Indexed Headcount

Q1 2010 Investor Presentation

9.0% 8.2% 4.3% 2.9% 2.6% 1.1% – 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0%

BK JPM STT BAC GS BLK

Disproportionately High Professional Fee & Outside Service Expense

While choices around insourcing vs. outsourcing impact headcount comparisons, BK also spends the greatest % of revenues on professional and outside service fees compared to

• ther custody, asset management and G-SIB peers

■ BK’s professional, legal and outside services expense has grown by over 10% since 2011

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2014 Professional & Outside Service Fees % of Revenues

Q1 2010 Investor Presentation

25.0% 27.0% 29.0% 31.0% 33.0% 35.0% 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 BK STT

BK’s Margins Have Deteriorated While State Street’s Margins Have Improved

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LTM Core Pre-Tax Margin %(1)

BNY Mellon went from a 2%+ margin surplus versus State Street to a 5% margin deficit

+2%

• 5%
• 3%

Q1 2010 Investor Presentation

Persistent Underperformance on Key Business Metrics

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Q1 2010 Investor Presentation

$76 $83 $59 $53 $58 $56 $89 $84 $107 $95 $76 $42 $23 $48 – $20 $40 $60 $80 $100 $120 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14

Key Revenue Drivers Are Decelerating Under Current Management

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Investment Servicing LTM Gross New Business Wins ($bn) Investment Management LTM Long-Term Net Inflows ($bn)

$1,138 $1,219 $1,176 $1,294 $1,720 $1,479 $1,231 $1,118 $706 $639 $595 $524 $529 $536 $1,125 $1,415 $1,348 $1,201 $1,167 $1,226 $1,216 $1,284 $1,273 $1,016 $982 $1,031 $1,133 $1,141 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 $1,900 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 BK STT

Q1 2010 Investor Presentation

BK Has Lost Custody Market Share Under Current Management

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BK tells investors to not “get overly concerned about that new business win rate because less of the business is geared to AUC”(1) and argues that there has been a “real shift in non- AUC/A types of businesses”(2) Management pronouncements may help explain inferior AUC/A growth rates but do not explain inferior asset servicing revenue growth rates

Asset Servicing Fee Growth %(1)

11% 17% – 2% 4% 6% 8% 10% 12% 14% 16% 18% 1 2

Q1 2010 Investor Presentation

BK Has Lost Custody Market Share Under Current Management: Total Custody Assets

< 51 >

Indexed Custody Asset Growth (3Q11 = 100%)

BNY Mellon is about to be surpassed as the world’s largest global custodian

115% 131% 143% 126% 130% 90% 100% 110% 120% 130% 140% 150% 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 BK STT NTRS JPM C

Q1 2010 Investor Presentation

BK Has Lost Custody Market Share Under Current Management : Equity Assets

< 52 >

Indexed Equity Custody Growth (3Q11 = 100%)

BNY Mellon is about to be surpassed as the world’s largest global custodian

144% 152% 152% 148% 100% 110% 120% 130% 140% 150% 160% 170% 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 BK STT NTRS JPM

Q1 2010 Investor Presentation

103% 105% 139% 113% 90% 100% 110% 120% 130% 140% 150% 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 BK STT NTRS JPM

BK Has Lost Custody Market Share Under Current Management : Fixed Income Assets

< 53 >

Indexed Fixed Income Custody Growth (3Q11 = 100%)

BNY Mellon is about to be surpassed as the world’s largest global custodian

Q1 2010 Investor Presentation

Net Interest Revenue Is Under-earning Due to Excess Accumulation of Low-Yielding Cash / Interbank Investments (cont’d)

Net Interest Margin % (FY14)(1)

< 54 >

Cash / Interbank Investments % of Interest-Earning Assets (FY14)

0.97% 1.08% 1.16% 0.90% 0.95% 1.00% 1.05% 1.10% 1.15% 1.20% 1 2 3 45.0% 33.6% 28.4% – 10.0% 20.0% 30.0% 40.0% 50.0% 1 2 3

Q1 2010 Investor Presentation

BNY Mellon Has Consistently Returned Less Capital to Shareholders Than State Street

Total Capital Return (% of Average Quarterly Market Capitalization)

< 55 >

1.70% 1.69% 1.14% 1.26% 1.52% 0.84% 1.33% 1.45% 1.59% 1.42% 1.42% 2.82% 2.97% 2.88% 1.82% 2.44% 2.22% 2.20% 1.79% 1.91% 1.83% 1.79% – 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 BK STT

Q1 2010 Investor Presentation

• V. No New Ideas For A Better Future

< 56 >

Q1 2010 Investor Presentation

“New” Strategy – No New Ideas

< 57 >

11/14/11 Investor Day 12/11/13 GS Conference

Despite rhetoric about “moving faster and with a greater sense of speed and urgency”, new targets imply business as usual

CEO Gerald Hassell: “It’s part of our goals that if we get a 4%, 5% revenue growth in a range, we should be able to produce positive operating leverage” CFO Todd Gibbons: “Our core fee business has been growing at about the 3% to 5% range...on the lower end

• f that, to generate positive
• perating leverage...is going to be

challenging”

10/28/14 Investor Day (“Flat”)

Revenue CAGR Expense CAGR EPS CAGR

3 – 5% 2 – 3% 7 – 11% 3 – 5% ~3 – 4 % 3.5% – 4.5% ~4%(1) 7 – 9%

Q1 2010 Investor Presentation

No New Ideas

< 58 >

New guidance demonstrates little commitment to restoring or improving returns on tangible equity, even in a normal interest rate environment

Return on Tangible Equity (non-GAAP)

25% 22% 20% 18% 17 -19% 20 - 22% 10% 15% 20% 25% 30% 2011 2012 2013 9/30/14 2017 Flat 2017 Normalized

25% 22% 20% 18% 17 -19% 20 - 22% 10% 15% 20% 25% 30% 2011 2012 2013 2014 2017 Flat 2017 Normalized

Q1 2010 Investor Presentation

Technology “Efficiencies” Are Unobservable

< 59 >

Stated Efficiencies Indexed Expense $

Highly touted technology efficiencies (reduced infrastructure spend, reduced application development costs) are unobservable in key expense lines Software and professional service expenses have risen 10 – 18% since 2012

100 114 118 100 102 110 80 85 90 95 100 105 110 115 120 2012 2013 2014

Software Professional, Legal and Other Purchased Services

Q1 2010 Investor Presentation

Lack of Accountability on “Operating Leverage”

< 60 >

Management claims to be focused on operating leverage but offers no consistent benchmark to be held accountable against Management has re-defined “operating leverage” three times in the past year

Operating Leverage Adjustments

2Q14 3Q14 2014 Earnings Earnings Investor Day

GAAP revenue

• (-/+) Gain (loss) on assets / investments
• (-) Investment and other income
• (-/+) Net securities gains (losses)
• (-) Minority interest of cons. inv. mgmt. funds
• (-) Accretable discount
• (+) Fully-taxed equivalent adjustment
• Adj. Revenue

GAAP Expenses

• (-) M&I, restructuring
• (-) Amortization
• (-) Charge related to i-mgmt funds
• Adj. Expenses

Q1 2010 Investor Presentation

Lack of Accountability on “Operating Leverage”

< 61 >

• equivalent. Adjusted expenses defined as GAAP expenses – M&I and restructuring charges – amortization of intangibles – charges related to investment management funds

Method 1(1): 3Q14 Earnings (10/17/14) Method 2(2): 2014 Investor Day (10/28/14) Commentary “Our operating leverage was up 245 basis points year-over-year...” (Todd Gibbons) “This is one of our real focuses, delivering positive operating leverage and improving the operating margins of our company...And so you can see over the last 12 months, the operating margin has in fact, improved by 78 bps across the firm” (Gerald Hassell)

Less than 2 weeks apart, Management showed two different methodologies to showcase the best version of “operating leverage” and “margin improvement” to investors

3Q14 vs. 3Q13 Results LTM 3Q14 vs. LTM 3Q13 Results

Results

245 bps 176 bps 14 bps 10 bps – 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% Operating Leverage Margin Expansion 77 bps 58 bps 107 bps 78 bps – 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% Operating Leverage Margin Expansion As presented Method 1 Method 2 As presented

Q1 2010 Investor Presentation

'14A - '17E 2014A 2015E 2016E 2017E CAGR Revenue $14,856 $15,450 $16,068 $16,711 4% % growth 4% 4% 4% (-) Accretable discount (163) (145) (120) (100) (-) Net securities gains (91) (91) (91) (91) (+) FTE 62 62 62 62 (-) Minority interest (84) (70) (70) (70) Core Revenue $14,580 $15,206 $15,849 $16,512 4% % growth 4% 4% 4% Core Expense (implied) ($10,645) ($10,991) ($11,451) ($11,924) 4% % growth 3% 4% 4% Core Pretax Income $3,935 $4,215 $4,398 $4,588 5% (+) Accretable discount 163 145 120 100 (+) Net securities gains 91 91 91 91 (-) FTE (62) (62) (62) (62) (+) Minority interest 84 70 70 70 (+/-) Provision for credit losses 48 (10) (10) (10) (-) Intangible amortization (298) (268) (240) (216) (10%) Pretax Income $3,961 $4,181 $4,367 $4,561 5% (-) Taxes @ 27% (1,038) (1,129) (1,179) (1,231) Net Income $2,923 $3,052 $3,188 $3,329 4% (-) Minority interest (84) (70) (70) (70) (-) Preferred dividends (73) (73) (73) (73) (-) Participating securities (43) (43) (43) (43) Net Income to common $2,723 $2,866 $3,002 $3,143 5% (/) FD shares outstanding 1,137 1,109 1,075 1,042 (3%) Diluted EPS $2.39 $2.59 $2.79 $3.02 8% % growth 8% 8% 8%

Guidance Implies Virtually No Operating Leverage on a “Core Margin” Basis

< 62 >

Key Management Guidance Drivers 4% Revenue Growth 8% EPS Growth 70% Buyback Ratio ~$600mm of share dilution per annum

Where is the operating leverage?

Q1 2010 Investor Presentation

Expense Growth Assumptions Are Unrealistic

< 63 >

Higher expense growth in “flat scenario” than “normalized scenario”?

Investment Services Segment:

2014A 2015E 2016E 2017E CAGR "FLAT SCENARIO":

Revenue 10,059 $ 10,411 $ 10,775 $ 11,153 $

3.5%

Pretax Income (excl. intangible amort., M&I, litigation & restructuring)

3,063 $ 3,216 $ 3,377 $ 3,546 $ 5.0%

Implied Pretax Expenses 6,996 $ 7,195 $ 7,398 $ 7,607 $

2.8% "NORMALIZED SCENARIO":

Revenue 10,059 $ 10,562 $ 11,090 $ 11,645 $

5.0%

Pretax Income (excl. intangible amort., M&I, litigation & restructuring)

3,063 $ 3,400 $ 3,774 $ 4,189 $ 11.0%

Implied Pretax Expenses 6,996 $ 7,162 $ 7,316 $ 7,455 $

2.1%

Q1 2010 Investor Presentation

'14E - '17E 2014A 2015E 2016E 2017E CAGR PTI @ 8.0% EPS CAGR $3,961 $4,167 $4,353 $4,546 5% (-) M&I, restructuring and legal (1,130) (450) (450) (450) (-) i-mgmt. fund charges (104) – – – (+) FX litigation charge 779 – – – (+) Intangible amortization 298 268 240 216 Pretax Income (ex. amort) $3,804 $3,985 $4,143 $4,312 4% (-) Investment Management PTI ($1,116) ($1,216) ($1,326) ($1,445) 9% % growth 9% 9% 9% (-) Investment Services PTI ($2,794) ($2,934) ($3,080) ($3,234) 5% % growth 5% 5% 5% Other PTI ($106) ($165) ($264) ($368) 51% % growth 55% 60% 40%

Questionable Expense Allocation To Meet Segment Targets

< 64 >

Guidance implies ~$250mm of incremental excess expenses will be allocated into the “Other” segment “Other” has historically been a bucket for excess expenses Whose bonus is tied to “Other” expenses?

Illustrative Income Statement (Flat Environment)

(1) Segment guidance Segment guidance

Q1 2010 Investor Presentation

Speculative Investments in “Growth” Initiatives

< 65 >

BK will incur hundreds of millions of dollars of expenses to pursue strategic investments that will only become accretive to earnings in 2017 and 2018

Investment Management Investment Servicing

Q1 2010 Investor Presentation

2013 2014 2015 2016 2017 2018 2019 Investment Management Initiatives ($36) ($74) ($39) – $44 $94 $99 Strategic Platform Investments (120) (111) (135) (11) 145 150 155 Total Investments ($156) ($185) ($175) ($11) $189 $244 $255

Speculative Investments in “Growth” Initiatives (cont’d)

< 66 >

Strategic investments are unlikely to reach breakeven until at least 2019, assuming Management does not underperform on its current plan as it has in the past

Pre-Tax Impact of “Initiatives” Cumulative Investment in “Initiatives”

($600) ($500) ($400) ($300) ($200) ($100) – $100 $200 2013 2014 2015 2016 2017 2018 2019

Q1 2010 Investor Presentation

0% 3% 6% 9% 12% BK STT

Despite a commitment to “investments”, Management does not appear equally committed to “growth” BK’s normalized revenue growth targets are well below State Street’s Revenue growth disparity is striking because: 1. BK has greater interest rate sensitivity than State Street 2. BK derives a greater mix of revenue from faster-growing asset management business lines 3. BK has greater breadth of capabilities that should drive superior growth from cross-selling (State Street targets 4 – 5% revenue CAGR from cross-selling(1))

Investments in “Growth” Initiatives – Where’s the Growth?

< 67 >

Long-term Guidance: Normalized Organic Revenue Growth

6% - 8% 7% - 10%

Q1 2010 Investor Presentation

$3,961 $500 $374 $82 $431 ($787) $4,561 $3,000 $3,500 $4,000 $4,500 $5,000 $5,500 $6,000 2014 PTI "Transformation Process" "Initiatives", "Strategic Platform" Incremental amortization of intangibles Organic growth @ 3.5% CAGR, constant margin [Gap] 2017 Implied PTI @ 8% EPS CAGR

Deja Vu All Over Again

< 68 >

At least $500mm

• Pg. 66 – 2014 Investor Day

2014 PTI drag of $185mm 2017 PTI benefit of $189mm

• Pg. 25, 64 – 2014 Investor Day

Natural organic growth and announced “Transformation Process”, “Initiatives” and “Strategic Platform” investments should imply higher EPS growth than guidance.... ...unless the collective financial impact of actions (yet again) do not drop to the bottom line, just as with Management’s “Operational Excellence” program launched in 2011

$3,961 @ 3.5% CAGR(1) “Incremental regulatory costs”

• vs. Buffer for poor Management

execution?

Q1 2010 Investor Presentation < 69 >

• 1. This Management team has failed to address the chronic

underperformance of the Company

• 2. This Management team has responded to its challenges with a

victim mentality – blaming the external environment while failing to control expenses or hold market share

• 3. New forecasts show no evidence of promised IT or expense

efficiency performance

• 4. Management’s business plan shows inability to identify new

business growth or opportunities created by new regulatory environment

Conclusion

Q1 2010 Investor Presentation

• VI. Case Study: JPM 2015 Investor Day

< 70 >

Q1 2010 Investor Presentation

1 1 1 1 1 2012 2013 2014 1 1 1 1 2012 2013 2014

Case Study: JP Morgan Chase’s 2015 Investor Day

< 71 >

Revenue / Expense Growth Trends (Index) Treasury Services Custody and Fund Services Treasury Services(1) Asset Servicing(1) Investment Services Noninterest Expense

1 1 1 1 1 1 2012 2013 2014

+ 5% + 8% + 7% + 2%

Revenue Revenue Actual Adjusted(2) Indexed to 2012 Indexed to 2012 Indexed to 2012

JP Morgan has delivered faster revenue growth and deeper expense reductions than BNY Mellon in key investment services business lines

Q1 2010 Investor Presentation

$10,170 ($176) $385 $10,379 ($123) ($120) ($636) $104 $2,573 $12,177

Case Study: JP Morgan Chase’s 2015 Investor Day

< 72 >

Corporate & Investment Bank – Expense Trend Noninterest Expense(1)

BNY Mellon has allowed expenses to grow significantly faster (in both $ and %) than JP Morgan’s entire Corporate & Investment Banking segment (which comprises JP Morgan’s investment services business) ■ Control, legal expenses and regulatory fees alone do not explain or justify BNY Mellon’s dramatic increase in

• costs. Investors would need to believe that BNY Mellon experienced more absolute dollar headwinds than a

peer that generates >2x in revenue and operates in business lines with greater regulatory and legal scrutiny

$2.6bn – more $ headwind (controls, legal, regulatory, etc.) than JPM CIB??

UNLIKELY

2010A – 2014A

$ Net Expense ∆ ~$400mm ~$1.8bn % Net Expense ∆ ~2% ~17%

Q1 2010 Investor Presentation

Case Study: JP Morgan Chase’s 2015 Investor Day

< 73 >

2014A – 2017E

$ Net Expense ∆

• $2.8bn

+$1.3bn

% Net Expense ∆

• 12%

+12%

JP Morgan is targeting significant net cost reductions in its Corporate & Investment Banking division between now and 2017 (versus significant expense growth for BNY Mellon) “Every single number that is here is attached to a name and to a particular action. So this is not aspirational at all, just to be clear” (Daniel Pinto, JP Morgan CEO – Corporate & Investment Bank, 2/24/15 Analyst Day) JP Morgan Corporate & Investment Bank – 2017 Expense Targets

(1)

Q1 2010 Investor Presentation

Case Study: JP Morgan Chase’s 2015 Investor Day

< 74 >

All the efficiency opportunities available to JP Morgan Chase for achieving net cost reductions are equally available to BNY Mellon

AVAILABLE TO BNY MELLON?

Corporate & Investment Bank – Expense Initiatives

• No Secret Playbook: better results come down to Management’s intent and capacity to EXECUTE

Q1 2010 Investor Presentation

Case Study: JP Morgan Chase’s 2015 Investor Day

< 75 >

Within asset management, JP Morgan has delivered stronger historical results and laid out more ambitious 2 – 3 year financial targets

2014 momentum 2009 – 2014 CAGR LT AUM +11% (-1%∆) +13% (-1%∆) Revenue +1% (-4%∆) +5% (-3%∆) Pretax Income(1)

• 1% (-6%∆)

+6% (-2%∆) Pretax margin(1) 28% (-1%∆) 28% (-1%∆)

Actual Results Medium-term Targets

CAGR(2)

Revenue

~12%

Pretax Income

~20% J.P. Morgan Chase BNY Mellon CAGR(3)

Revenue

8% - 10%

Pretax Income

12% - 14%

Q1 2010 Investor Presentation

Case Study: JP Morgan Chase’s 2015 Investor Day

< 76 >

Within asset management, JP Morgan is delivering strong actual margins for shareholders, as opposed to adjusted, “pro-forma” illustrative margins that do not ultimately create shareholder value

Presented pre-tax margins are adjusted for: ? Distribution and servicing expense (real) ? Money market fee waivers (real) Amortization of intangible assets

Q1 2010 Investor Presentation

• VII. Maximizing Value: Bold Action and New Ideas

< 77 >

Q1 2010 Investor Presentation

• A. Common Sense Principles

< 78 >

Q1 2010 Investor Presentation

Common Sense Principles

< 79 >

The principles that will rejuvenate BNY Mellon are common sense:

A vision for the business. Clearly stated and compelling A sustainable competitive advantage that forms the foundation of the vision Metrics must be aspirational, transparent and achievable A first class management team that is unified, stable and of the highest ethical standard A fervent commitment to execution. The CEO must move the

• rganization to deliver

Vision Competitive Advantage Clear Metrics First Class Management Execution

Q1 2010 Investor Presentation

Vision

< 80 >

1. BNY Mellon will be the bank for the world’s asset managers ■ Custody ■ Investment Services ■ Financing ■ Risk Management 2. BNY Mellon will be a leader in Wealth Management ■ Intermediate between the best active managers in the world and high net worth clients ■ Provide the best, low cost beta investment products for clients 3. BNY Mellon will excel in managing the most efficient balance sheet in the industry ■ Balancing return, with risk, with regulatory requirements ■ Far more complex in the post-crises world 4. BNY Mellon must win the technology race in finance ■ Creativity, innovation, and production per technologist must be the best in the industry ■ Use technology to capitalize on scale 5. BNY Mellon must be the market’s safe harbor

Q1 2010 Investor Presentation

Global Presence Sustainable Competitive Advantage

< 81 >

BNY Mellon must deliver the lowest cost platform for the asset management business BNY Mellon must provide asset managers with an integrated platform that leverages scale and breadth of product; deliver the whole offering BNY Mellon must maximize its global footprint

How BNY Mellon Will Win:

Low-Cost Structure Integrated Solutions

Q1 2010 Investor Presentation

Clear Metrics

< 82 >

Management must establish Clear Metrics that are within Management’s control

Targeted operating margins of 35%+ Targeted ROE at 10%+ Target highest headcount productivity in the industry. Start with a 10% - 20% headcount reduction Operating Margins Returns on Equity Headcount

Q1 2010 Investor Presentation

Execution

< 83 >

Goals must be clear and measurable Hold people accountable to meet these goals Follow-up to measure progress and identify weakness Complete tasks and finish projects Tie completion back to metrics

Clear Targets Systematic Measurement Continuous Review Rewards & Consequences

Q1 2010 Investor Presentation

• B. Business Opportunities

< 84 >

Q1 2010 Investor Presentation

• 1. Reconsider Value Proposition to Customers

< 85 >

Be the “Bank to the Buyside” by providing full-service outsourced functions that help buy-side clients manage new regulatory, liquidity and financing regulations Expand service potential for the “middle” and “front” offices, where new regulations and complexities are driving demand for a variety of value-added services that trust banks are uniquely positioned to provide

• State Street is the market leader and BNY Mellon remains a follower in the middle and front offices

Integrate “front” and “back” office offerings to drive better client solutions and stickier relationships Asset Manager Needs Back Office Middle Office Front Office

Real-time, detailed data analytics Risk platforms Clearing platforms Compliance platforms Portfolio accounting Risk management Performance analytics Valuation Trade and settlement activity Custody Fund accounting & administration Foreign exchange Treasury & cash management

Full-Service

Q1 2010 Investor Presentation

Illustrative Investment Services ROE % Consolidated ROE 8.6% 8.0% 8.5% 9.0% 9.5% 10.0% 15.0% 6.9% 7.4% 8.0% 8.5% 9.0% 17.5% 6.8% 7.3% 7.8% 8.3% 8.8% 20.0% 6.7% 7.2% 7.6% 8.1% 8.6% 22.5% 6.6% 7.1% 7.5% 8.0% 8.5% 25.0% 6.5% 7.0% 7.4% 7.9% 8.4% 27.5% 6.5% 6.9% 7.4% 7.8% 8.3% 30.0% 6.4% 6.9% 7.3% 7.8% 8.2% Investment Mgmt. ROE

30% 9% – 5% 10% 15% 20% 25% 30% 35%

• Adj. PBT Margin

(Reported)

• Adj. PBT Margin

(ex. Net Interest Revenue)

• 1. Reconsider Value Proposition to Customers (cont’d)

< 86 >

Reconsider fee schedule and structure to earn appropriate margin for services and ROE

Investment Services ROE (Implied)(1) Investment Services Margins

• ROE. Ignores Other segment for illustrative purposes

Without the subsidy from net interest revenues, BNY Mellon earns much thinner margins for the valuable services it provides Investment Services is unlikely earnings its cost of capital (~10% cost of equity)

Q1 2010 Investor Presentation

3-4% 4-5% 5% 5% 5-6% 8-9% 12% 15-20% 15-20% 0% 5% 10% 15% 20% 25%

BK 2017 Targets US Insurance US Endowments US Foundations US Retirement Market Global Market US Alternatives (HF / PE) Global ETFs Asia-Pacific

• 1. Reconsider Value Proposition to Customers (cont’d)

< 87 >

Seize fast-growing, higher-margin markets within asset management, such as non-US, global ETFs and alternatives

Projected Long-Term Nominal Growth(1)

Legacy BK Markets Future Growth Markets

Revenue targets of 3 – 4% CAGR in Investment Services do not reflect ability to capture the long-term growth prospects of underlying markets

Q1 2010 Investor Presentation

• 1. Reconsider Value Proposition to Customers (cont’d)

< 88 >

Global Alternative Investments Market Global ETF Market

ETFs and Alternative Investments are key long-term growth priorities, where significant portions of the servicing functions remain insourced

Q1 2010 Investor Presentation

• 1. Reconsider Value Proposition to Customers (cont’d)

< 89 >

Lou Gerstner, CEO of IBM (1993 – 2002): “I announced Operation Bear Hug. Each of the fifty members of the senior management team was to visit a minimum of five of our biggest customers during the next three months. The executives were to listen, to show the customer that we cared, and to implement holding action as appropriate. Each of their direct reports (a total of more than 200 executives) was to do the same. For each Bear Hug visit, I asked that a one- to two-page report be sent to me and anyone else who could solve that customer’s problems”

Senior leadership should be hands-on and actively focus on cultivating client relationships, and the CEO needs to be active as the face of the firm to clients

Q1 2010 Investor Presentation

• 2. Raise I.T. Effectiveness To Top Company Priority

< 90 >

Scalable systems are a critical driver of business value and yet appear antiquated and inefficient to employees, clients and competitors Platforms have yet to be integrated and have been a major source of expense growth An entire new architecture may be necessary

Two Custody Platforms Five Accounting Platforms Major Redundancies

• Back office headcount
• Systems maintenance
• Application development
• Reporting costs

“Upgrade your tech and bring your business processes and products into the 21st century. The competition is selling cars while BNY is proud of the fact that it sells the cheapest and fastest horse drawn buggy in town. Banking is not a labor intensive business yet BNY has managed to turn it into one via underinvestment in tech and revenue generating professionals”

Employees Clients

“Bank of New York Mellon are letting themselves down with the continuing lack of merger in their systems” “BNYM continue to struggle with service differentials driven by their multiple platforms custody and accounting”

Competitors(1)

“They’re going to get to a point when it becomes hard to catch up with us just because

• ur future functionality is just 6x faster”

Q1 2010 Investor Presentation

• 2. Raise I.T. Effectiveness To Top Company Priority (cont’d)

< 91 >

BNY Mellon’s current model emphasizes labor over technology and automation However, investing in automation is a long-term competitive necessity for BNY Mellon to mitigate risk and improve client services More investments in automation to reduce manual process may be useful but should take place only after legacy IT systems are re-architected

Labor Technology Long-term Expense Growth Inflationary Deflationary Innovation Potential & Velocity Medium High Scalability Not Scalable Scalable Operational Risk High (Human Error) Medium (Straight-Through Processing)

Q1 2010 Investor Presentation

9.4x 4.2x – 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 7.0x 8.0x 9.0x 10.0x

• 2. Raise I.T. Effectiveness To Top Company Priority (cont’d)

< 92 >

Staff Expense / Information Technology Expense (FY14)

Invest in I.T. to drive speed, accuracy and transparency BNY Mellon’s antiquated I.T. systems and manual processes results in an unbalanced mix of spending on labor over technology and innovation

1x reduction = ~0.40 of potential incremental EPS(1)

Q1 2010 Investor Presentation

Compensation Expense Headcount Software Expense Purchased Services Returns Speed & Transparency Operational Risk

• 2. Raise I.T. Effectiveness To Top Company Priority (cont’d)

< 93 >

Applications Cloud-Enabled Apps Data Centers Shared Services ERP Systems Custody Platforms

I.T. TRANSFORMATION Strategy BUSINESS IMPACT

Set Explicit Targets... How many systems today? How many in the future?

Q1 2010 Investor Presentation

Implied Headcount (Asset Manager + Asset Servicer) Asset Managers

Capital JPM Vanguard BLK BEN Group GIM (2) PIMCO

AUC/A ($tn) $29 $28 $21 AUM ($bn) $1,710 $3,100 $4,652 $898 $1,147 $792 $747 $1,744 $709 $2,480 $1,680 $363

STT (IS) JPM (TSS)

Asset Servicers

32,700 29,490 29,960 33,170 41,670 39,670 36,736 34,470 41,200 39,200 36,266 34,000

50,300 27,470 ~27,000 ~14,200 12,200 9,266 ~7,000 6,264 5,870 5,700 3,100 ~2,500 2,490 1,435

– 10,000 20,000 30,000 40,000 50,000 60,000 BK STT (Inv. Serv.) JPM (TSS) Vanguard BLK BEN Capital Group IVZ TROW JPM (Global Inv. Mgmt.) LM STT (Inv. Mgmt.) PIMCO FII

Total Employees

• 3. Aggressive Headcount Reduction Initiative

Headcount disproportionate to that of comparable companies ■ Combinations of similar sized investment managers and investment servicers would imply meaningfully lower headcount levels ■ Headcount discrepancy not bridgeable by BK’s Corporate Trust or Pershing business units

Total Employees

< 94 >

Investment Managers Investment Servicers

Q1 2010 Investor Presentation

50,300 ~40,000 30,000 35,000 40,000 45,000 50,000 55,000 BK Benchmarking Target 42,500 42,200 48,000 48,700 49,500 51,100 50,300 40,000 42,000 44,000 46,000 48,000 50,000 52,000 2008 2009 2010 2011 2012 2013 2014

• 3. Aggressive Headcount Reduction Initiative

< 95 >

Business model requires scalability, efficiency, accuracy, data capture and data security. Manual human processes are an impediment to all of these things BK needs better people, not more people

Total Headcount Trajectory Relative Headcount to Benchmark(1)

∆ ~10,000

Q1 2010 Investor Presentation

• 3. Aggressive Headcount Reduction Initiative (cont’d)

< 96 >

Successful restructuring precedents support a strategy of targeted, impactful headcount reductions

Headcount Restructuring in Historical Perspective

Starting Net Headcount % Period Company Headcount (est.) Reductions (est.) Reduction (Yrs.) Date Historical Restructurings Apple 10,896 4,238 38.9% ~ 2 1997 - 1998 Xerox 94,600 33,500 35.4% ~ 4 2000 - 2003 Credit Suisse First Boston 27,547 8,959 32.5% ~ 2 2002 - 2003 IBM 301,542 81,703 27.1% ~ 2 1993 - 1994 Merck 100,000 24,000 24.0% ~ 4 2010 - 2013 Starbucks 176,000 39,000 22.2% ~ 2 2008 - 2010 Heinz 41,000 8,000 19.5% ~ 2 2006 - 2007 Legg Mason 3,550 571 16.1% ~ 2 2011 - 2012 Lockheed Martin 140,000 17,000 12.1% ~ 2 2010 - 2011 Current Restructurings Canadian Pacific 19,500 6,000 30.8% N/A 2012 - 2016E Barclays (Investment Bank) 26,000 7,000 26.9% N/A 2014E - TBU Bank of America 284,000 46,000 16.2% N/A 2010 - TBU Microsoft 128,000 18,000 14.1% N/A 2014E - TBU UBS 62,628 8,628 13.8% ~ 3 2013 - 2015E Hewlett Packard 331,800 41,000 12.4% ~ 3 2012 - 2014E Valeant 18,000 2,250 12.5% N/A 2013 - TBU Royal Bank of Scotland 141,000 14,000 9.9% ~ 4 2015 - 2019

Q1 2010 Investor Presentation

• 3. Aggressive Headcount Reduction Initiative (cont’d)

< 97 >

+ Reduce headcount to reach world-class levels + Eliminate multiple layers of management and bureaucracy + Invest in world-class technology and automation + Re-engineer business processes to improve costs, speed and transparency Deliver services to clients at a fundamentally lower cost point and with greater service reliability Drive greater volumes through more highly-scaled platforms Profitably compete for more business with a lower cost structure; deliver greater revenue growth Improve returns on equity

OPERATIONAL SIMPLIFICATION BUSINESS IMPACT

Q1 2010 Investor Presentation

• 3. Aggressive Headcount Reduction Initiative (cont’d)

< 98 >

Lou Gerstner, CEO of IBM (1993 – 2002): “’If we have too many people, let’s right-size fast; let’s get it done by the end of the third quarter.’ I explained that what I meant by right-size is straightforward: ‘We have to benchmark our costs versus our competitors and then achieve best-in-class status’. I also remarked that we had to stop saying that IBM didn’t lay off people” “I’ve had a lot of experience turning around troubled companies, and one of the first things I learned was that whatever hard or painful things you have to do, do them quickly and make sure everyone knows what you are doing and why. Whether dwelling on a problem, hiding a problem

• r dribbling out partial solutions to a problem while you wait

for a high tide to raise your boat – dithering and delay almost always compound a negative situation. I believe in getting the problem behind me quickly and moving on”

Q1 2010 Investor Presentation

• 4. Reposition Asset Management

< 99 >

The Index / ETF industry represents a highly compelling long-term growth opportunity for asset management ETFs & Index Funds Total AUM ($tn)

Bernstein estimates Index & ETF AUM will grow by 4x

• ver the next decade

BlackRock estimates the global ETF industry will grow by 11% CAGR into 2017, expanding by $3.6tn

High-Quality Growth Pathway

Long runway for ETF growth supported by deepening adoption within new and existing client segments, financial products, and geographies

$2.6 $3.0 $3.3 $3.8 $4.3 $4.9 $5.5 $6.3 $7.1 $8.0 $8.9 $10.0 $11.1 $12.5 – $5.0 $10.0 $15.0 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25 Index Mutual Funds ETFs

Q1 2010 Investor Presentation

$993 $417 $389 $104 $54 $49 $41 $35 $27 $27 – $200 $400 $600 $800 $1,000 $1,200 iShares State Street Vanguard PowerShares db x-trackers Lyxor Nomura AMC Wisdom Tree ProShares First Trust

• 4. Reposition Asset Management (cont’d)

< 100 >

The ETF industry is highly concentrated due to the importance of economies of scale Index / ETF strategies have highly attractive incremental margins and can be highly profitable at scale

Top 10 ETF Providers by AUM globally ($bn)

Top 10 players control 87% of the Index / ETF market

Unit Economics

Index / ETF products carry the highest contribution margins of nearly all investment strategy

Q1 2010 Investor Presentation

• 4. Reposition Asset Management (cont’d)

< 101 >

BNY Mellon is uniquely positioned to capture the HUGE opportunity in passive / index / beta products by leveraging its large infrastructure base and existing strengths in technology, distribution, human capital and branding ■ Opportunity to serve as white-label asset management solution to other asset management companies, some of whom may already be custody clients ■ Leverage existing institutional distribution channels with RIAs and broker-dealers ■ Leverage data, technology and investment insights to become a product development leader BNY Mellon can scale its existing infrastructure to create a major passive asset manager, but successful execution requires new leadership, new technology, new product design teams and new marketing plan

Back Office Functions Front Office Functions Fund Accounting & Administration Portfolio Management Index Calculation Broker-Dealer Functions Product Development Sales & Distribution Research & Product Development Brand & Marketing BK Competencies BK Competencies Leverage & scale Develop & grow

Q1 2010 Investor Presentation

$186 $62 $24 $11 – $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 LDI Index Active Alternatives

• 4. Reposition Asset Management (cont’d)

< 102 >

BNY Mellon has experienced the greatest inflows into its more beta / process / scale-driven investment strategies like Liability-Driven Investments and Index businesses High-touch, alpha-oriented boutiques make no strategic sense for this Company and are hard to sell to clients...no competitive advantage Alpha boutiques should be sold or spun and BNY Mellon should focus its resources on its competitive advantages within asset management

BNY Mellon Investment Management Inflows (2011 – 2014) ($bn)

Strong: β Orientation Weak: α Orientation

Q1 2010 Investor Presentation

• 5. Culture of Effectiveness, Urgency and Accountability

< 103 >

Employee Feedback “Almost no career opportunities, non-existent training, terrible technology infrastructure, and overly

• bureaucratic. The fact that there is actually a committee to oversee other committees that set

internal policies kind of says it all. Unimaginative senior management that is always reacting to

• competition. Bloated middle management while underinvesting in products, services, and line

employees that actually drive revenues.” “Depending on your point-of-view there aren't high standards for performance. It seems people get rewarded for providing the bare minimum and it seems cultural. Working with other service groups is a nightmare as that culture seems pervasive.” “They have an ‘if it's not broke, don't fix it’ mentality, so the creativity and energy needed to drive ideas forward can only be done if you're truly passionate about what you do...But, I will say that it's near-impossible to get fired, so job security is incredible.” “The merger, even six years later, still shows signs of growing pains. Advancement is nearly stagnant and so are the salaries. Communication between the various departments is a struggle and they're constantly shuffling and consolidating.”

Modernize the culture, with compensation to match – lean, faster, and commercially intense Employee feedback repeatedly emphasizes a culture of bureaucracy, lifetime employment, stifled creativity, out-of-touch leadership, lack of business integration and poor communication

Q1 2010 Investor Presentation

• 5. Culture of Effectiveness, Urgency and Accountability (cont’d)

< 104 >

Employee Feedback “There seems to be a fairly large number of individuals who don't know what the company does beyond their own responsibilities and they are ok with that. There is little global awareness.” “Politics, dysfunctional org structure, misalignment of systems, and the legacy of two strong financial institutions that have never ‘really’ merged.” “Invest more in technology and training employees on topics that matter. Keep morale up in the company and take better steps to retain talented employees.” “Main challenge is navigating the variety of corporate cultures which exist due to the lack of integration. Advice to Management: Focus on integrating, focus on the experienced employees, and consolidate the top three tiers of management.” “Senior Executives and Senior Mgmt who have been with BONY for 15+ years are not the ones who will lead the bank to new successful strategies and profitability.” “Very large company that can't get out of its own way. Bureaucracies are overwhelming, overly risk averse; little opportunity to make a value added contribution to the business of one's own client group...Stated initiatives by Chairman to improve on bureaucracies do not make it down to the

• perational level because people are fearful of losing their jobs (presumably). People are stifled of

creativity and line managers are fearful to support and create change for fear of losing job. Massive culture change is needed.”

Q1 2010 Investor Presentation

• 5. Culture of Effectiveness, Urgency and Accountability (cont’d)

< 105 >

FAST ORGANIZATION LOW-COST OPERATIONS BELIEF SYSTEMS ALIGNED INCENTIVES

+ Zero-based budgeting + Consolidate systems and vendors + Invest in digital automation + Fewer layers of management &

• rganizational bottlenecks

+ Common metrics & reporting + Hands-on management; less committee delegation + Greater % of processes as shared services + Greater leveraging of systems + Compensation and headcount levels + Purchased services costs + “Outcomes drive compensation” + “Clients define our success” + “Deliver results in an uncertain world” + “Adapt & learn” + “Discipline improves execution” + “Stay lean to go fast” + Targets-based program, reset annually + Targets should be applied as far down the

• rganization as practical (000s of eligible
• fficers and executives)

+ Focus on a mix of financial, strategic and total company performance goals + Key metrics: operating margins, ROE, growth, risk and talent development

< 105 >

Q1 2010 Investor Presentation

• 6. Update Regulatory Sophistication and Outreach Strategy

< 106 >

Mixed Track Record of Anticipating Key Regulatory Trends Mixed Track Record of Influencing Regulatory Changes Todd Gibbons (4/19/11): “In terms of the leverage ratio, I really haven’t been overly focused on it at this point. I don’t think it will be the constraining ratio for us...I don’t think it’s going to change business behavior at this point as I look at it” Todd Gibbons (10/28/14): “We now know most of what the rules are and so far it’s been the supplemental leverage ratio that is turning out to be our binding constraint”

Rule BNY Mellon Regulatory Proposal Final

SLR Balance sheet daily averaging

• SLR

Exclusion or caps on Central Bank deposits

• SLR

Exemptions to leverage requirements for cash deposit surges

• LCR

Operational services (not deposits) subject to legally binding written agreement

• LCR

Exclude deposits in connection with prime brokerage services

• LCR

Exclude from “operational deposits” instances where bank provides services as an “agent or administrator

• LCR

Revise definition of “operational services” to include administration of investment assets, collateral management services, and settlement of FX transactions

• BNY Mellon needs to hire key leaders and talent to develop a leadership position with regulatory

groups in priority geographies Sophisticated regulatory outreach requires more than just subject matter experts but also relationship managers Demonstrate safety, soundness and vision that comforts key regulatory constituents

Q1 2010 Investor Presentation

• 6. Update Regulatory Sophistication and Outreach Strategy (cont’d)

< 107 >

Position BNY Mellon as a problem solver in the global risk management matrix by forming a sovereign advisory franchise like BlackRock Solutions ■ In addition to being a $550mm+ revenue business, BlackRock Solutions helps BlackRock strengthen relationships with key regulators and official institutions, while also burnishing BlackRock’s reputation from prestige advisory assignments BNY Mellon has a unique opportunity to leverage its size, data, systems, expertise, lack of trading conflicts, and low public profile to support regulatory bodies and official institutions with similar complex assignments Risk analytics platform Operations outsourcing End-to-end investment system Valuation and risk assessment Balance sheet strategy Disposition of distressed assets Financial Markets Advisory Capabilities Clients & Assignments Assisted in 2012 Prudential Capital Assessment Review (PCAR) Reviewed and valued loan portfolio of 18 financial firms Advised on the creation of a bad bank for certain RBS assets Analyze assets of Fannie Mae and Freddie Mac; wind-down distressed debt book of Bear Stearns & AIG

Q1 2010 Investor Presentation

• 6. Update Regulatory Sophistication and Outreach Strategy (cont’d)

< 108 >

“If you can’t measure it, you can’t manage it” BNY Mellon blames a significant portion of its expense growth since 2011 on regulatory and compliance costs Despite the significant increases in regulatory & compliance costs, BNY Mellon has been unwilling or unable to quantify its compliance expenses We question how the Company can manage this huge component of expense growth without detailed visibility and thoughtful analysis of its components and drivers Compliance and Regulatory Restructuring Formulate a long-term strategy for tackling compliance and regulatory costs Immediately conduct a comprehensive review of compliance and regulatory

• perations to restructure and streamline the compliance chain, eliminate

redundancies and reduce costs

Q1 2010 Investor Presentation

• 7. Consider A New Brand Image

< 109 >

BNY

2

BNY is a company of gigantic scale and impact. It is the oldest bank in America, having been founded by Alexander Hamilton in 1784, and over 80% of Fortune 500 companies do business with BNY.

$28.5

trillion assets under custody or administration

$1.7

trillion assets under management

100

markets across the globe

Source: bnymellon.com

3

Yet in today’s market, the share of conversation in the news media and among the public has BNY coming in behind the majority of its competitors.

7:1

JP Morgan Chase: BNY Mellon

6:1

Citigroup: BNY Mellon

1:1

State Street: BNY Mellon

Source: Google trend report compiling news articles and public search of each company name in Jan 2015

4

Over the course of the last decade, the majority of the conversation about BNY took place at the moment the two companies came together as

• ne.

Source: Google trend report compiling news articles and public search of each term over the last 9 years.

• Bank of New York
• Bank of New York Mellon
• BNY
• BNY Mellon

5

• Bank of New York
• Bank of New York Mellon
• BNY
• BNY Mellon

Source: Google trend report compiling news articles and public search of each term over the last 9 years.

BNY went from being a relatively popular company in the public sphere, to losing its cache soon after the merger.

Over the course of the last decade, the majority of the conversation about BNY took place at the moment the two companies came together as

• ne.

6

Source: Google trend report compiling news articles and public search of each term over the last 9 years.

The merger did not leave a strong impression of the new brand, and today the terms “Bank of New York” , “Bank of New York Mellon” , “BNY” and “BNY Mellon” are being used interchangeably.

• Bank of New York
• Bank of New York Mellon
• BNY
• BNY Mellon

Over the course of the last decade, the majority of the conversation about BNY Mellon took place at the moment the two companies came together as one.

BNY went from being a relatively popular company in the public sphere, to losing its cache soon after the merger.

7

Source: bnymellon.com

What’s made this convergence of brands even more difficult is that BNY still operates with a multitude of “boutique” brands under its Investment Management wing - 14 as of today - most of which are not recognizable as a part of the parent company.

8

Over the past two years, BNY has made an attempt to develop a stronger public image of its overarching brand through a global advertising campaign. The ads focused on growing awareness and significance

• f BNY Investment

Management and Servicing business, and coined a tagline of “Investments Company for the World.”

9

And while the advertising was well executed, it may have been developed across the wrong strategic brief. Without a singular brand, the company was still sending the majority of investors to work with one of its 14 boutiques, none of which are covered in the ads themselves.

10

What’s more, it did not seem to jar the opinions of individuals within the category. We conducted an anonymous, informal survey with senior stakeholders in the finance sector in New York, and discovered that their opinions of BNY have not shifted.

traditional

confused

custodian venerable

rational old

boring

stale

Hamilton

Source: Most common words used by our sample to describe BNY Mellon today. Bigger words were mentioned more frequently.

big

unchanging

11

And that lackluster opinion and lack of interest in the BNY brand may be influencing more than just investors and peers - it may have a significant influence

• n the new talent vying to

work at the company.

Source: quicksprout.com analysis of social media engagement in the past 60 days

BNY organic social media conversation is minimal in comparison to the competition, especially where it matters most - career interest.

BNY Mellon Citigroup JP Morgan Chase

12

ALL OF THIS DATA LEADS US TO A SINGLE CONCLUSION:

The public brand of BNY has not taken root with the press, investors, advisors, high net worth individuals nor potential employees.

13

ALL OF THIS DATA LEADS US TO A SINGLE CONCLUSION:

The public brand of BNY has not taken root with the press, investors, advisors, high net worth individuals nor potential employees. Instead, the BNY brand is splintered across a multitude

• f names, entities and

preconceptions, without a motivating image the public can connect with.

14

In order to succeed, BNY must immediately reconsider its marketing and services

• ffering in order to

build a brand for the future.

ALL OF THIS DATA LEADS US TO A SINGLE CONCLUSION:

The public brand of BNY has not taken root with the press, investors, advisors, high net worth individuals nor potential employees. Instead, the BNY brand is splintered across a multitude

• f names, entities and

preconceptions, without a motivating image the public can connect with.

How does BNY approach this challenge?

THE QUESTION IS:

16

First, we must note that the industry itself has become revolutionized over the past

• decade. Banks today are as

much technology services as they are finance institutions, and many have evolved to be massive marketing machines.

Source: McKinsey and Associates, How winning banks refocus their IT budgets for digital CMO Council Marketing Spend Factsheet 2013

“Digital technology is transforming the financial- services industry, and banks face the challenge of fully digitizing their businesses.” Escalating competition has created a 5.6% marketing spend lift in the financial services sector, raising its media expenditures beyond $4.6 billion in 2013.

17

BNY has remained traditional as

• ther banks embraced calculated

risks to move forward.

GOING FORWARD, BNY MUST DEVELOP AN INTEGRATED MARKETING PLAN BASED ON THREE OBJECTIVES:

BUILD A SINGLE BRAND

(MERGE ALL ENTITIES UNDER ONE NAME)

AND RAISE ITS PUBLIC IMAGE. CONNECT WITH PRIORITY TARGETS THROUGH DIGITAL AND MOBILE. COMBAT CURRENT PRECONCEPTIONS OF THE BRAND THROUGH BRAND ACTIONS.

OUR SOLUTION:

18

THE CAMPAIGN IDEA:

19

BUILD A SINGLE BRAND:

IN ORDER TO INCREASE SCALE AND CONNECT WITH MORE INVESTORS, WE MUST START WITH A LARGE-SCALE EFFORT TO MAKE OUR BRAND MEMORABLE

Magazine Televison

We advise focusing this above- the-line effort in key financial capitals in the world: New York, London, Shanghai, Hong Kong, Chicago and San Francisco.

SEO Public Relations

20

PRINT EXECUTIONS:

21

DIGITAL BILLBOARDS:

22

CONNECT WITH PRIORITY TARGETS:

HIGH NET WORTH INVESTORS, ADVISORS, AND TALENT IN THIS SEGMENT ARE AHEAD OF THE POPULATION IN DIGITAL, AND WE MUST MEET THEIR ON-DEMAND NEEDS THROUGH.

Responsive Brand Digital, Mobile & Tools Digital/Mobile Video and Blog Content Brand Social & CRM Magazine Televison SEO Public Relations

In coordination with a mass effort, we will tailor digital and mobile media and services directly to our most desirable target market, connecting with them when they are most receptive to our message.

23

DIGITAL TAKEOVERS:

24

MOBILE APPLICATION:

25

COMBAT PRECONCEPTIONS THROUGH BRAND ACTIONS.

BNY MUST NOT JUST TALK THE TALK, BUT WALK THE WALK. COORDINATING A SERIES OF PUBLIC EVENTS AND INTERNAL ACTIONS WILL GIVE THE WORLD PROOF THE BRAND HAS TRULY EVOLVED.

Responsive Brand Digital, Mobile & Tools Digital/Mobile Video and Blog Content Brand Social & CRM Magazine Televison SEO Public Relations

Develop programs that gives the press & our target audience the proof that BNY Mellon has truly evolved.

New Tools Public Events & Sponsorships

26

EXPERIENTIAL BRAND ACTION:

This integrated marketing approach will propel BNY to become a household name of significant value. What’s more, it will assist the company in retaining current customers while encouraging new prospects to experience BNY firsthand.

DESIRED RESULT

APPENDIX

Thank You

29

What we mean when we say “brand action”:

Develop a program that gives investors, advisors, institutions, high net worth individuals, potential employees and the press the belief that BNY Mellon is one of the few globally great institutions.

30

EMOTIONAL RATIONAL

Develop practices, policies, behaviors and comms that make the public feel that BNY Mellon’s ambitions match its size. With those actions in mind, BNY Mellon becomes an entity whose forward thinking create trust in the future.

In order to do so, we must develop or promote our rational actions and services in order to feed a larger emotional message.

31

EMOTIONAL RATIONAL

Employees are allowed to use up to 20% of their time on projects

• utside of their day to day work.

Google is a tech company that values humanity and innovation

• ver the pursuit of profit.

Instead of learning from our competitors, we should learn from brands outside of our category.

32

EMOTIONAL RATIONAL

Ritz Carlton service employees are allowed to spend up to $2,000 per customer to improve their stay. The Ritz-Carlton is devoted to making sure I only have the best experience.

Instead of learning from our competitors, we should learn from brands outside of our category.

33

EMOTIONAL RATIONAL

Every Apple store comes equipped with the Genius Bar to help buyers deal with product challenges. Apple is a friendly face in a cold technology landscape.

Instead of learning from our competitors, we should learn from brands outside of our category.

34

PR

Consumer engagement platform Ad Campaign

PR CONSUMER ENGAGEMENT PLATFORM

WE BELIEVE

actions like these, communicated to the public, will cause a reappraisal of BNY Mellon.

One bank, many brands Stale, old fashioned and slow to advance

TO FROM

One brand, one powerful entity: BNY Mellon Future thinking, with a discerning eye on the past

CORE BEHAVIOR COMMUNICATIONS CAMPAIGN DIGITAL TRADITIONAL ADVERTISING ADVOCACY SOCIAL EXPERIENTIAL

Q1 2010 Investor Presentation

• VIII. Unlocking Potential: New Leadership

< 110 >

Q1 2010 Investor Presentation

Reflections on Change

< 111 >

“And what's interesting, when you promote people into new jobs or bring in new talent from outside, how you get increasingly different insights into how we operate

• ur business. Adding these people and promoting these people are making us a

better company. They're raising the bar in terms of the excellence that we expect of

• urselves and we expect of our staff. And it is in fact permeating the entire
• rganization. As new people come in with new ideas and raise the expectations, it's

helping us better perform as a company.”

• Gerald Hassell, CEO

10/28/14 Investor Day

We Believe Shareholders Should Embrace This Advice And Seek New Leadership

Q1 2010 Investor Presentation

Key Leadership Needs

< 112 >

KEY LEADERSHIP ROLES KEY SKILLS AND EXPERIENCES

CEO Cultivate critical relationships with key clients and regulators Team-building: identify internal and external talent that can drive organizational change Invigorate culture by elevating H.R. and implementing organizational structures that drive accountability and emphasize clients “Block-and-tackle”: critically evaluate the business portfolio, focus the strategic priorities, enforce accountability CFO Perform continuous benchmarking of growth, costs and operating metrics against competitors Implement rigorous measurement and compensation systems Centralize business planning and budgeting to drive a unified strategy and reduce duplicate spending Critically evaluate return on investments for business initiatives Implement “zero-based budgeting” practices Optimize balance sheet against onerous regulatory constraints CTO Consolidate “mutant” IT systems and platforms that have proliferated over time Cull unproductive projects; manage, measure and prioritize technology initiatives Drive automation initiatives that increase employee productivity

Q1 2010 Investor Presentation

Leadership Tenure

< 113 >

@ BNY Mellon Executive Title Start Year Tenure (yrs.) Gerald Hassell CEO 1973 42 Todd Gibbons CFO 1986 29 Suresh Kumar CTO 1986 29 Karen Peetz President 1998 17 Brian Shea CEO, Investment Services 1983 32 Kurt Woetzel President, BNY Mellon Markets Group 1985 30 Curtis Arledge CEO, Investment Management 2010 5 Average 26 yrs Median 29 yrs

Nearly the entire Senior Management team has worked at BNY Mellon for 25+ years

Is this the team to deliver fresh perspectives and organizational change?

Q1 2010 Investor Presentation

Available Executive Talent For A New BNY Mellon (Anonymized)

< 114 >

Executive #1 Executive #2 Executive #3

Capital markets expertise

• Proven leadership at a large

global financial institution

• Operations, risk and

technology experience

• Asset management expertise
• Regulatory credibility
• Emerging markets expertise
• Shareholder credibility
• We Have Identified Compelling Executive Talent

Q1 2010 Investor Presentation

• IX. Valuation Potential

< 115 >

Q1 2010 Investor Presentation

Estimated Excess Headcount ~10,000 BK Staff Expenses $5,845 BK Staff Expenses per FTE $0.115 Implied Excess Staff Expenses $1,148 Other Expense Opportunity: Software, furniture & equipment $942 Professional, legal and other purchased services $1,339 Net Occupancy Expenses $610 "Other" $1,031 SubTotal $3,922 Illustrative Pre-Tax Impact of 5% improvement $196 EPS Impact

Excess Staff Expense Savings $1,148 Other OpEx Savings 196 Total Pre-Tax Savings $1,344 Incremental Net Income $981 Fully Diluted Shares Outstanding (FY15) 1,107

EPS Benefit $0.89 Assumed P/E 15.0 x Value Creation Per Share $13.30

HQLA Assets ($bn) $164 LCR Runoff ($bn) $151

LCR Ratio % 109%

Target LCR Ratio %

100%

Excess HQLA ($bn) $13 HQLA Yield 0.7% Non-HQLA Yield 1.4% Incremental Net Interest Revenue $182 Incremental Net Income $133 Fully Diluted Shares Outstanding (FY15) 1,107

EPS Benefit $0.12 Assumed P/E 15.0 x Value Creation Per Share $1.80

Expense Base and Investment Yield Opportunity

< 116 >

Expense Reduction Categories Enhanced Investment Yield Potential

Q1 2010 Investor Presentation

2015 2016 2017 SQ Cash Net Income $2,915 $3,450 $3,876 OpEx Savings Achieved(1) $736 $981 $981 Restructuring Costs (981) – – Technology reinvestment, after-tax (150) (200) (225) Enhanced Investment Portfolio 133 205 267

Incremental Net Income ($262) $986 $1,023

PF Cash Net Income $2,652 $4,437 $4,899 PF Cash Net Income (ex. Restructuring) $3,633 $4,437 $4,899 OpEx Savings as % of Run-Rate Savings 75% 100% 100% Restructuring Costs as % of Run-Rate OpEx Savings 100% – – SQ FDSO 1,107 1,073 1,035 (-) Incremental total shares repurchased(2) – (18) (33) PF FDSO 1,107 1,055 1,002 SQ Cash EPS $2.63 $3.22 $3.75 PF Cash EPS (ex. Restructuring) $3.28 $4.21 $4.89

EPS Benefit $0.65 $0.99 $1.14

P/E Multiple 15.0x 15.0x 15.0x

Total Value Creation Per Share $9.74 $14.83 $17.14 % Premium to Current 25% 38% 44%

Direct Incremental Earnings Into Share Buybacks

< 117 >

Margin Initiatives + Share Buybacks

Q1 2010 Investor Presentation

Marcato Proposal: Total Value Creation Opportunity

< 118 >

By restoring BK’s earnings trajectory to its potential and eliminating the “credibility discount” created from years of stagnant earnings and missed targets, significant shareholder value can be created

2015 2016 2017 SQ Cash EPS (LTM) $2.63 $3.22 $3.75 (+) Expense efficiencies & NIM yields 0.65 0.99 1.14 (+) Improved growth profile(1) 0.10 0.25 0.45 PF Cash EPS (LTM) $3.39 $4.45 $5.34 P/E Multiple 15.0x 15.0x 15.0x Value Per Share $50.78 $66.82 $80.05 (+) Cumulative DPS $0.74 $2.08 $3.68

• Adj. Value Per Share

$51.52 $68.90 $83.73 % Premium to Current 32% 76% 114%