What Bank of New York Mellon (BNY) Said on Its Q3 Earnings Call

Key Points

• Strong Q3 performance: BNY reported EPS of $2.34, up 24% year over year, on revenue of $5.7 billion, up 12%. The company delivered a 39% pre-tax margin and approximately 390 basis points of positive operating leverage.
• Broad-based business growth: Securities Services revenue rose 15%, while Market and Wealth Services revenue increased 12%; assets under custody or administration reached $63.4 trillion. BNY returned about $1.4 billion to shareholders through dividends and buybacks.
• Raised 2026 outlook: BNY now expects nearly 500 basis points of positive operating leverage for the year, with revenue growth near the midpoint of its 12%–13% range and net interest income growth of 15%. Management also highlighted more than 400 AI solutions in production and new digital-asset offerings.

Bank of New York Mellon NYSE: BNY reported third-quarter earnings per share of $2.34, up 24% from a year earlier, as revenue growth across its businesses outpaced expense growth and drove positive operating leverage.

Chief Executive Officer Robin Vince said the company generated $5.7 billion in revenue, a 12% year-over-year increase, and recorded a 39% pre-tax margin and 29% return on tangible common equity. BNY also produced approximately 390 basis points of positive operating leverage during the quarter.

“Our growth was broad-based across our business segments,” Vince said, citing continued client demand, sales momentum and larger, more comprehensive client wins. The company recorded its 15th consecutive quarter of year-over-year sales growth, according to management.

Revenue and Capital Results

Chief Financial Officer Dermot McDonogh said fee revenue increased 12% year over year. Investment Services fees rose 15%, supported by new business, client activity and higher market values. Investment Management and Performance fees increased 3%, primarily because of higher market values, partly offset by the mix of assets-under-management flows.

Assets under custody and/or administration totaled $63.4 trillion, up 10% from a year earlier. Assets under management rose 2% to $2.2 trillion. Net interest income increased 15% year over year to $1.4 billion, helped by reinvesting securities at higher yields and balance-sheet growth, partly offset by deposit-margin compression.

Expenses totaled $3.5 billion, up 8% from the prior-year period. More than three-quarters of the increase was tied to revenue-related expenses, McDonogh said, while the remainder reflected investments that were partly offset by efficiency savings.

The company returned approximately $1.4 billion of capital to common shareholders during the quarter through dividends and share repurchases, resulting in an 85% total payout ratio. Its Tier 1 leverage ratio was 5.7%, while its CET1 ratio stood at 10.9%.

Segment Performance

Securities Services revenue increased 15% year over year to $2.8 billion. Investment Services fees in the segment rose 19%, including a 12% increase in Asset Servicing fees. ETF servicing assets under custody and/or administration rose 26%, while alternatives AUC/A grew 14%.

Issuer Services fees increased 43%, driven in part by corporate-trust fees, including pass-through expenses related to BNY’s role as financial agent for Trump Accounts. Total debt serviced rose 6% to $15.4 trillion. Securities Services generated $1 billion of pre-tax income, up 24%, with a 36% pre-tax margin.

Market and Wealth Services posted revenue of $2 billion, up 12% year over year, and pre-tax income of $1 billion, up 17%. Wealth Solutions reported $48 billion of net new assets during the quarter, representing a 7% annualized growth rate. Clearance and Collateral Management fees rose 17%, with average collateral balances up 14% to $8.3 trillion and average daily transaction volumes up 10%.

Investment and Wealth Management revenue rose 4% to $857 million. The unit had $6 billion in long-term active-strategy inflows and $4 billion in index inflows, offset by $22 billion of cash outflows. Segment pre-tax income increased 11% to $205 million.

Raised 2026 Outlook

BNY raised its outlook for 2026 operating leverage, now expecting nearly 500 basis points of positive operating leverage for the full year. That is up from its prior forecast of 400 basis points and from guidance of slightly more than 100 basis points at the start of the year.

• Full-year revenue growth, excluding notable items, is expected around the middle of a 12% to 13% range, dependent on markets.
• Net interest income is expected to increase 15% for the full year.
• Expense growth, excluding notable items, is now expected around the middle of a 7% to 8% range, up from prior guidance as revenue-related costs rise.

McDonogh said the outlook assumes current market-implied forward interest rates and a broadly constructive operating environment. He also said BNY expects some seasonal improvement in deposits in the fourth quarter, following a seasonal decline in the third quarter.

AI, Digital Assets and Platform Strategy

Vince said BNY spends about $4 billion annually on technology within a $13 billion expense base and views artificial intelligence as a source of capacity, product improvement and potential new client services rather than solely an efficiency tool.

The company has more than 400 AI solutions in production, according to Vince. BNY is using its enterprise AI platform, Eliza, to support workflow analysis, model selection and governance. Vince said the firm is not separately disclosing AI spending because it is embedded across its expense base.

BNY also introduced digital-asset-related offerings during the quarter, including global Digital Transfer Agency capabilities and a digitally native money market fund through BNY Dreyfus using BLIQUID tokens to represent fund shares on-chain. The company launched a Pay-to-Wallet capability for cross-border payments to participating retail digital wallets.

Management said its platform operating model is now fully live across the company. McDonogh said the model, alongside BNY’s commercial approach and AI initiatives, is intended to support cross-selling, client engagement, efficiency gains and growth across the firm’s businesses.

About Bank of New York Mellon (NYSE:BNY)

BNY, formerly known as BNY Mellon, is a global financial services company headquartered in New York City. Formed in 2007 through the merger of the Bank of New York and Mellon Financial Corporation, BNY traces its roots back to 1784, making it one of the oldest banking institutions in the United States. It was also the first company listed on the New York Stock Exchange.

BNY operates at the center of the world's capital markets, partnering with clients to help them operate more efficiently and accelerate growth.

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