Executive Summary

Q1 2025 was solid with total revenue $4.79B (+6% YoY), diluted EPS $1.58 (+26% YoY), and pre-tax margin 32%; ROTCE reached 24.2% (GAAP and adjusted) .
EPS and revenue modestly beat S&P Global consensus: EPS $1.58 vs $1.492; revenue $4.774B vs $4.773B; strength came from higher NII (+11% YoY) and resilient fee growth (+3% YoY) with disposal gains contributing in Investment & Other revenue (*Values retrieved from S&P Global).
Guidance unchanged: FY25 NII up mid-single digits, some fee revenue growth, expenses +1–2% ex-notables, effective tax rate c.23–24% for the remaining quarters, and total payout ≈100% of earnings; management emphasized deposit stability and immunized 2025 NII positioning .
Catalyst: accelerating platform operating model (>50% of org now), record cross-sell, and AI initiatives (OpenAI multi-year agreement, >40 AI solutions in production) underpin operating leverage and scalability .

What Went Well and What Went Wrong

What Went Well

Operating leverage and profitability: pre-tax margin 32% (vs 30% in Q4’24) and ROTCE 24.2%; strong NII (+11% YoY) from reinvestment at higher yields, with fee revenue +3% YoY .
Business momentum: Securities Services revenue +8% YoY; Market & Wealth Services +11% YoY; improved pre-tax margins (31% and 48% respectively) as FX and collateral activity increased .
Management execution and cross-sell: “the strongest sales quarter on record” and “meaningful positive operating leverage,” with platform transformation driving faster onboarding and trade finance cycle times; “we are making progress” toward integrated platforms strategy .

What Went Wrong

Investment & Wealth Management weaker: segment revenue $779M (-8% YoY), pre-tax margin 8%; headwinds from AUM flow mix, rebate adjustments, lower seed/equity investment income .
Issuer Services softness sequentially: lower DR revenue and NII; Securities Services total revenue down (1%) QoQ, despite YoY growth .
Macro uncertainty and tariff risk: CEO flagged elevated near- and medium-term risks and sentiment reversal; deposit flight-to-quality pickup minimal versus past crises, implying less benefit from “port-in-storm” behavior so far .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Total Revenue ($USD Millions)	$4,648	$4,847	$4,792
Fee Revenue ($USD Millions)	$3,404	$3,513	$3,403
Net Interest Income ($USD Millions)	$1,048	$1,194	$1,159
Diluted EPS ($USD)	$1.50	$1.54	$1.58
Pre-tax Operating Margin (%)	33%	30%	32%
ROE (%)	12.0%	12.2%	12.6%
ROTCE (%)	22.8%	23.3%	24.2%

Segment	Q3 2024 Revenue ($USD Millions)	Q4 2024 Revenue ($USD Millions)	Q1 2025 Revenue ($USD Millions)	Q3 2024 Pre-tax Margin (%)	Q4 2024 Pre-tax Margin (%)	Q1 2025 Pre-tax Margin (%)
Securities Services	$2,214	$2,324	$2,300	29%	28%	31%
Market & Wealth Services	$1,545	$1,667	$1,686	48%	48%	48%
Investment & Wealth Mgmt	$849	$873	$779	21%	20%	8%

KPI	Q3 2024	Q4 2024	Q1 2025
AUC/A (Trillions)	$52.1	$52.1	$53.1
AUM (Trillions)	$2.14	$2.03	$2.01
Average Deposits ($USD Billions)	$284.686	$286.488	$282.535
CET1 Ratio (%)	11.9%	11.2%	11.5%
Tier 1 Leverage Ratio (%)	6.0%	5.7%	6.2%

Estimates vs Actual (Q1 2025)	Consensus	Actual
EPS ($)	1.4916*	1.58
Revenue ($USD Millions)	4,773.27*	4,792

Values marked with * retrieved from S&P Global.

Non-GAAP notable items Q1 2025 (impact already reflected): $40M disposal gain (investment & other revenue); severance ($32M), litigation reserves ($2M), FDIC special assessment ($6M). Adjusted EPS equals reported $1.58 in Q1, vs $1.72 in Q4 due to notable items .

Guidance Changes

Metric	Period	Previous Guidance (January 2025 Call)	Current Guidance (Q1 2025 Call)	Change
Net Interest Income	FY 2025	Up mid-single-digit YoY	Up mid-single-digit YoY	Maintained
Fee Revenue	FY 2025	Some growth, market dependent	Some growth, market dependent	Maintained
Expenses (ex-notables)	FY 2025	+1–2% YoY	+1–2% YoY	Maintained
Effective Tax Rate	FY 2025	22–23% full-year	~23–24% for each of remaining three quarters; ~22–23% full-year	Clarified trajectory
Capital Returns (Total Payout)	FY 2025	≈100% ± of earnings	≈100% ± of earnings; pace managed conservatively	Maintained
Common Dividend	Q2 2025	$0.47 declared Q1; typical cadence	$0.47 per share payable May 2, 2025	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024 and Q4 2024)	Current Period (Q1 2025)	Trend
Platforms Operating Model	~25% of employees transitioned by YE’24; >80% targeted by YE’25	>50% of BNY now in new model; strongest sales quarter on record; improved onboarding/trade finance cycle times	Accelerating adoption and commercial impact
AI/Technology	Promoting AI tools; ~35% employees enabled for Eliza at YE’24	Multi-year OpenAI agreement; >80% trained, >8,000 experimenting; >40 AI solutions in production	Scaling rapidly with clear productivity ambitions
Macro/Tariffs & Sentiment	Noted macro resilience and capital strength in 2H’24	CEO highlights tariff uncertainty and sentiment reversal; near/medium-term risks	Deteriorating sentiment; cautious outlook
Deposits & NII Immunization	Deposits stable; NII up QoQ in Q4’24	Deposits modest pickup but no “port in storm”; 2025 NII immunized; 35 scenarios run	Stable deposits; NII risk managed
Pershing Flows	NNA -22B (Q3’24); -23B (Q2’24)	NNA +11B in Q1; pipeline strong; Wolfe platform momentum	Improving from negative to positive
Treasury Market Liquidity	Stable markets with rising activity (Q3’24)	Rails functioning well; liquidity thinner at top of book; Fed intervention not warranted	Functioning; wider bid/offer
Regulatory Leverage Ratios	Capital ratios up QoQ (Q3’24)	Discussion on SLR/Tier 1 leverage; banks’ flex to support markets; preference for less gold-plating	Policy debate intensifying
Digital Assets/Stablecoin	New product initiatives (Alts Bridge, Archer) in Q3’24	Stablecoin legislation viewed as enabling on-chain transactions; not near-term revenue driver	Strategic positioning; long-term optionality

Management Commentary

“Earnings per share of $1.58 were up 26% year-over-year… Total revenue of $4.8 billion was up 6%… Expenses remained well controlled… meaningful positive operating leverage… pretax margin improved to 32%, and ROTCE improved to 24%.” – Robin Vince .
“Our new commercial coverage model is proving increasingly effective… strongest sales quarter on record… number of clients who bought from 3 or more lines of business has increased by 40% over the past 2 years.” – Robin Vince .
“We announced a multiyear agreement with OpenAI… more than 40 AI solutions into production… we expect these to drive productivity gains, improved risk management…” – Robin Vince .
“We continue to expect full year 2025 NII to be up mid-single-digit… some fee revenue growth… approximately 1% to 2% year-over-year growth in expenses (ex-notables)… effective tax rate approximately 23% to 24% for each of the remaining 3 quarters.” – CFO Dermot McDonogh .

Q&A Highlights

Deposits and NII: Deposits aligned with expectations; modest recent pickup but not a “port in the storm”; 2025 NII immunized via coordinated CIO/treasurer/deposit desk actions; high deposit betas continue to be managed .
Macro activity: Increased volumes in clearing, collateral, and liquidity platforms amid volatility; client behavior not yet shifting to large long-only liquidations; potential follow-on outsourcing opportunity as CEOs reassess operations .
Policy/Markets: Treasury market functioning well despite thinner top-of-book liquidity and wider spreads; Fed intervention not warranted absent dysfunction .
Digital Assets: Stablecoin legislation would facilitate on-chain DVP; strategy focused on custody and tokenization rails; not a sizable 2025 P&L driver .
Pershing flows & pipeline: Choppiness from timing; mandates slipping from Q1 to Q2; Wolfe platform guidance $60–$70M for 2025; Atria migration forthcoming .
Regulatory ratios: Discussion on SLR/Tier 1 leverage; management argues changes could improve banks’ ability to support markets .

Estimates Context

Q1 2025 EPS beat: $1.58 actual vs $1.4916 consensus; revenue slight beat: $4,792M actual vs $4,773M consensus. Strength driven by NII reinvestment at higher yields and fee resilience (FX, collateral, client activity). Adjusted EPS equaled reported as notable items netted out (*Values retrieved from S&P Global).
Potential estimate revisions: Investment & Wealth Management showed pressure from AUM flow mix and rebate accounting change; segments with market/volume sensitivity (Securities Services, Market & Wealth) may see upward revisions tied to FX volatility and collateral balances .

Key Takeaways for Investors

Operating leverage and profitability intact: 32% pre-tax margin, ROTCE 24.2%, with deposit stability and immunized 2025 NII underpinning visibility .
Platform model is delivering commercial impact: record multi-line sales and faster onboarding improve scalability; expect continued margin benefits over ’26–’27 as initiatives mature .
AI is shifting from pilots to production: OpenAI agreement and >40 solutions deployed suggest credible productivity and risk management tailwinds medium-term .
Macro/tariff uncertainty is the near-term swing factor: higher activity benefits BNY’s rails, but sentiment points to caution; minimal flight-to-quality deposit benefit so far .
Mix headwinds in Investment & Wealth Management are real: rebate accounting change and flow mix pressured revenue/margins; watch for stabilization with higher markets and product mix shifts .
Capital return attractive and sustained: Q1 dividends and buybacks ($1.09B total) with payout ≈95% YTD; FY25 guidance ≈100% ± remains in place .
Tactical focus: leverage segments benefiting from volatility (FX, clearance/collateral, treasury services) and cross-sell breadth; medium-term thesis centers on platform scalability, AI leverage, and steady capital return .

Additional relevant press releases: Q1 dividends declared ($0.47 per share) ; Q1 earnings release notice ; BNY’s strategic AI-related investment in Reality Defender (deepfake detection) highlights ongoing innovation/security focus .

Bank of New York Mellon Corp (BK)·Q1 2025 Earnings Summary