The Bank of New York Mellon Corporation
BNY · NYSE
Next quarter
Expected to report Oct 15, 2026 — estimated from last year’s reporting date.
Consensus is $2.25 EPS for Sep 2026 across 6 estimates, ranging $2.19 to $2.29.
BNY Jun 2026
- 11.82%
- -0.92%
- $2.20
- $2.46
- —
- —
Reported results
- $1.76B
- $2.45
Highlights
- Earnings beat: Second-quarter non-GAAP diluted EPS was $2.46, versus the $2.20 consensus estimate, an 11.82% surprise; GAAP diluted EPS was $2.45.
- Profit growth: Net income applicable to common shareholders rose to $1.70 billion from $1.56 billion in the prior quarter and $1.39 billion a year ago, up 9% and 22%, respectively.
- Revenue: Total revenue increased 5% sequentially and 13% year over year to $5.70 billion, with fee and other revenue up 11% year over year to $4.25 billion.
- Net interest income: NII rose 6% from the prior quarter and 20% year over year to $1.45 billion; net interest margin expanded to 1.45% from 1.38% sequentially and 1.27% a year ago.
- Securities Services: Segment revenue grew 15% year over year to $2.83 billion and pretax income increased 28% to $1.11 billion, helped by higher client activity, market values, FX revenue and net interest income.
- Market and Wealth Services: Revenue rose 12% to $1.97 billion and pretax income increased 21% to $1.02 billion, led by Payments and Trade revenue growth of 17% and Clearance and Collateral Management growth of 16%.
- Asset gathering: Assets under custody and/or administration reached $62.6 trillion, up 12% year over year, while assets under management rose 6% to $2.2 trillion; investment management still recorded $21 billion of long-term strategy outflows.
- Capital returns: BNY returned $1.5 billion to common shareholders in the quarter, including $1.1 billion of share repurchases, while the July dividend increase lifted the quarterly payout 19% to $0.63 per share.
- Capital position: The standardized CET1 ratio was 11.0% at June 30, unchanged from March 31, while the Tier 1 leverage ratio declined to 5.9% from 6.0% as average assets increased.
Analysis
BNY's second quarter was a broad-based beat with stronger fee revenue, net interest income and operating leverage. Non-GAAP diluted EPS of $2.46 exceeded the $2.20 consensus by 11.82%, while GAAP diluted EPS was $2.45. Net income applicable to common shareholders reached $1.70 billion, up from $1.56 billion in the first quarter and $1.39 billion in the year-ago quarter. Total revenue rose to $5.70 billion from $5.41 billion sequentially and $5.03 billion a year ago, and the pre-tax operating margin improved to 39.8% from 37.3% and 36.6%, respectively.
The defining feature was the combination of fee-based growth and a stronger interest contribution. Fee and other revenue increased 11% year over year to $4.25 billion, led by investment services fees, client activity, market values and higher FX volumes. NII increased 20% to $1.45 billion as securities were reinvested at higher yields and the balance sheet expanded, lifting NIM by 18 basis points to 1.45%. Expense growth was contained at 7%, despite investments, salary increases and revenue-related costs. Securities Services and Market and Wealth Services were the main operating engines, while Investment and Wealth Management grew more modestly and continued to face long-term strategy outflows.
Revenue and earnings
BNY produced its strongest quarterly result on file, with revenue growth translating into higher profitability despite a 7% increase in noninterest expense. Reported results included severance expense and litigation reserves; excluding notable items, diluted EPS was $2.46 versus $1.94 a year ago.
- Operating leverage: Income before taxes rose 12% year over year to $2.27 billion, while the pre-tax operating margin expanded to 39.8% from 36.6%.
- Share count: Average diluted shares declined 4% year over year to 692.2 million, supporting the 27% year-to-date increase in diluted EPS to $4.68 from $3.51.
- Credit costs: The provision for credit losses was an $8 million benefit, compared with a $17 million benefit in the year-ago quarter, primarily reflecting improvement in commercial real estate exposure.
Fee revenue and scale
The fee franchise remained the center of the quarter, supplying 71% of total revenue. Growth reflected both market-sensitive factors and underlying client activity, although investment management flows remained mixed.
- Investment services: Fees increased 13% year over year to $2.91 billion, driven by net new business, higher client activity and higher market values.
- Investment management: Investment management and performance fees rose 5% to $796 million, while performance fees fell to $3 million from $10 million; on a constant-currency basis, the fee increase was also 5%.
- Market assets: AUC/A increased 12% to $62.6 trillion, reflecting higher market values and net client inflows, partly offset by the stronger dollar. AUM increased 6% to $2.2 trillion, but long-term strategy outflows were $21 billion, partly offset by $24 billion of short-term inflows.
- Other fee drivers: FX revenue rose 8% to $229 million on higher client volumes, and financing-related fees increased 25% to $64 million, primarily on higher underwriting fees.
Net interest income
NII was a major incremental earnings driver. The benefit came from reinvesting investment securities at higher yields and balance-sheet growth, though BNY continued to experience deposit margin compression.
- NII growth: Net interest income reached $1.45 billion, up 20% year over year and 6% sequentially. Average interest-earning assets increased 6% year over year to $397.6 billion.
- Margin expansion: Net interest margin increased to 1.45%, 18 basis points above the year-ago level and 7 basis points above the first quarter.
- Balance-sheet mix: Average loans increased 20% year over year to $85.6 billion, while average investment securities rose to $156.4 billion from $146.8 billion. Average interest-bearing deposit costs declined to 2.33% from 2.95%.
Business segment momentum
Securities Services was the largest contributor to the quarter's acceleration, while Market and Wealth Services delivered the fastest growth among the major fee businesses. Investment and Wealth Management improved profitability but remained exposed to product mix and flows.
- Securities Services: Revenue rose 15% to $2.83 billion and pretax income increased 28% to $1.11 billion. Asset Servicing revenue increased 14% to $2.12 billion, Issuer Services revenue rose 17% to $707 million, and securities lending revenue increased 39% to $78 million.
- Market and Wealth Services: Revenue increased 12% to $1.97 billion and pretax income rose 21% to $1.02 billion. Payments and Trade revenue grew 17% to $571 million, while Clearance and Collateral Management increased 16% to $593 million.
- Investment and Wealth Management: Revenue increased 8% to $863 million and pretax income rose 23% to $182 million. Investment Management revenue grew 6% to $577 million, while Wealth Management revenue increased 11% to $286 million.
Capital and shareholder returns
BNY continued to distribute a substantial portion of earnings while maintaining a stable standardized CET1 ratio. The quarter also included a subsequent dividend increase, reinforcing the company's capital-return emphasis.
- Quarterly distributions: BNY paid $371 million of common dividends and repurchased $1.10 billion of common stock, returning $1.47 billion in total to common shareholders; the total payout ratio was 87%.
- Repurchase authorization: The company has a new $10.0 billion repurchase authorization, in addition to remaining capacity under the prior $6.0 billion authorization.
- Dividend increase: In July, the board approved a 19% increase in the quarterly common dividend from $0.53 to $0.63 per share, expected to be paid August 7, 2026.
- Liquidity and capital: Available funds increased to $208 billion, or 40% of total assets, from $176 billion, or 37%, at December 31, 2025. The average liquidity coverage ratio was 111% and the average net stable funding ratio was 130%.
