The Bank of New York Mellon Corporation
BNY · NYSE
Next quarter
Expected to report Jan 12, 2027 — estimated from last year’s reporting date.
Consensus is $2.37 EPS for Dec 2026 across 7 estimates, ranging $2.34 to $2.45.
BNY Sep 2026
- 4.87%
- $2.26
- $2.37
- —
- —
Reported results
- $1.69B
- $2.34
Highlights
- EPS and expectations: Adjusted diluted EPS was $2.37 versus consensus of $2.26, a 4.87% beat; GAAP diluted EPS was $2.34, up 24% year over year but down from $2.45 in Q2.
- Revenue and earnings: Revenue of $5.676 billion rose 12% year over year and was nearly flat sequentially; net income was $1.687 billion, up 15% year over year and down from $1.792 billion in Q2.
- Raised 2026 outlook: BNY now expects nearly 500 basis points of positive operating leverage, with revenue growth around the midpoint of 12%–13% and expense growth around the midpoint of 7%–8%, excluding notable items.
- Fee growth: Fee and other revenue increased 11% year over year to $4.253 billion; investment services fees rose 15%, while investment management and performance fees grew 3%.
- Net interest income: NII rose 15% year over year to $1.423 billion, supported by higher reinvestment yields and balance-sheet growth, but declined 2% sequentially amid seasonal deposit weakness.
- Scale and client assets: Assets under custody and/or administration reached $63.4 trillion, up 10% year over year; AUM was $2.2 trillion, up 2%.
- Operating leverage and returns: Positive operating leverage was approximately 390 basis points; pretax margin was 38.5% and return on tangible common equity was 29.0%.
- Capital returned: BNY returned $1.373 billion to common shareholders in the quarter, including $937 million of repurchases and $436 million of dividends; the total payout ratio was 85%.
Analysis
BNY delivered a strong year-over-year quarter, though earnings and revenue were slightly below Q2’s elevated levels. Adjusted diluted EPS of $2.37 topped the $2.26 consensus by 4.87%; GAAP EPS was $2.34, up 24% from $1.88 a year earlier and below Q2’s $2.45. Revenue rose 12% year over year to $5.676 billion, essentially flat sequentially, while net income increased 15% year over year to $1.687 billion but declined from $1.792 billion in Q2. The central story was broad-based fee growth, supplemented by stronger NII, with 390 basis points of positive operating leverage and a 29% return on tangible common equity.
Investment services fees advanced 15%, reflecting new business, client activity and higher market values; NII increased 15% year over year as securities reinvested at higher yields, despite deposit margin compression and a seasonal sequential dip. Management raised its full-year 2026 outlook to nearly 500 basis points of positive operating leverage, on revenue growth around the midpoint of 12%–13% and expense growth around the midpoint of 7%–8%, excluding notable items. The outlook assumes a broadly constructive environment and remains market-dependent. AUC/A rose 10% to $63.4 trillion, while the quarter’s $1.373 billion of capital returns came alongside a preliminary CET1 ratio of 10.9%, down from 11.0% in Q2.
Earnings and outlook
Revenue growth outpaced expense growth, expanding profitability year over year, although both revenue and earnings eased from Q2. Fee and other revenue was $4.253 billion, up 11% year over year; NII was $1.423 billion, up 15%. Noninterest expense increased 8% to $3.489 billion, with management attributing more than three-quarters of the increase to revenue-related costs and the remainder mainly to investment, partly offset by efficiency savings. The result was $2.186 billion of pretax income and a 38.5% pretax margin, compared with $1.845 billion and 35.6% a year earlier.
- Full-year target: BNY raised its 2026 positive operating leverage outlook to nearly 500 basis points, from 400 basis points previously and slightly more than 100 basis points at the start of the year.
- Revenue and costs: The updated outlook is for total revenue growth around the midpoint of 12%–13% and expense growth around the midpoint of 7%–8%, both excluding notable items. Management expects NII to increase 15% for the year.
- Earnings comparison: Adjusted diluted EPS of $2.37 exceeded the $2.26 consensus; GAAP diluted EPS was $2.34, up 24% year over year and down from $2.45 in Q2.
Fee growth and scale
Fee growth was broad-based, and asset totals benefited from higher markets as well as client inflows and new mandates. Investment services fees increased 15% year over year to $2.973 billion. Investment management and performance fees rose 3% to $803 million, primarily reflecting higher market values, partly offset by AUM flow mix. Foreign-exchange revenue increased 19% to $198 million on higher client volumes. Firmwide AUC/A reached $63.4 trillion, up 10% year over year; AUM was $2.2 trillion, up 2%, with higher market values partly offset by outflows and the stronger dollar.
- Client momentum: Management reported a 15th consecutive quarter of year-over-year sales growth, with wins across products, client types and regions.
- Securities-services fees: Fees rose 19% year over year; Asset Servicing fees grew 12%, while Issuer Services fees increased 43%, including pass-through expenses tied to BNY’s financial-agent role for Trump Accounts.
- Market and Wealth Services: Investment services fees increased 10%, supported by 17% growth in Clearance and Collateral Management and 7% growth in Wealth Solutions. Wealth Solutions generated $48 billion of net new assets, an annualized growth rate of 7%.
- Investment management: AUM inflows were $6 billion in long-term active strategies and $4 billion in index, offset by $22 billion of cash outflows.
Net interest income
NII rose 15% year over year to $1.423 billion, but fell 2% from Q2’s $1.446 billion. The annual increase reflected higher yields as investment securities were reinvested and balance-sheet growth, partly offset by deposit margin compression. Sequentially, the main drag was seasonally lower deposits: average deposits declined 1%, including a 1% decrease in interest-bearing and a 3% decrease in noninterest-bearing deposits. Net interest margin was 1.43%, versus 1.45% in Q2 and 1.38% a year earlier.
- Reinvestment: Management said roughly $5 billion of securities roll off each quarter and are being reinvested at higher yields; the yield pickup has moved from about 150 to 200 basis points.
- Near-term deposits: BNY said deposits had begun to pick up early in Q4 and expects seasonal activity to support a sequential improvement relative to Q3.
- Full-year outlook: Management expects NII to be up 15% year over year in 2026, based on current market-implied forward rates.
Segment performance
- Securities Services: Revenue rose 15% year over year to $2.820 billion and pretax income increased 24% to $1.008 billion, with a 35.8% pretax margin. Growth included 19% higher investment services fees, 20% higher FX revenue and 14% higher NII. Securities on loan were $630 billion, and AUC/A was $45.9 trillion.
- Market and Wealth Services: Revenue grew 12% to $1.984 billion and pretax income rose 17% to $1.020 billion; the pretax margin was 51.4%. Average collateral balances increased 14% to $8.3 trillion, and daily average transaction volumes in Clearance and Collateral Management grew 10%.
- Investment and Wealth Management: Revenue increased 4% to $857 million and pretax income rose 11% to $205 million, lifting the pretax margin to 24%. Management cited higher market values, partly offset by AUM flow mix.
Costs, capital and investment
The quarter paired substantial shareholder distributions with lower preliminary capital ratios: CET1 was 10.9%, down from 11.0% in Q2, and the Tier 1 leverage ratio was 5.7%, versus 5.9%. Management said capital returns and a decline in accumulated other comprehensive income contributed to the sequential capital decline. It described its Tier 1 leverage target range as 5.5%–6% and said capital and liquidity remained within its framework.
- Shareholder returns: BNY paid $436 million in common dividends and repurchased $937 million of shares. Total capital returned was $1.373 billion, an 85% payout ratio.
- AI deployment: Management said more than 400 AI solutions were in production and framed the opportunity as creating internal capacity, improving products and enabling new client services. It cited a $4 billion annual technology budget within a $13 billion expense base, but did not separately quantify AI spending or financial benefits.
- Platform and digital capabilities: Management said the platform operating model was fully live across the firm. Recent launches included Digital Transfer Agency capabilities and Pay-to-Wallet cross-border payments; BNY also launched an on-chain money-market fund offering.
