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Bank of New York Mellon Corp (BK)·Q2 2025 Earnings Summary

Executive Summary

  • Strong quarter with revenue surpassing $5B for the first time; EPS $1.93 (+27% YoY), pre-tax margin 37% (+4 pts YoY), ROTCE 27.8% .
  • Broad-based momentum: NII +17% YoY on reinvestment at higher yields and balance sheet growth; fee revenue +7% YoY; operating leverage ~+633 bps .
  • Updated FY25 outlook: NII raised to high-single-digit growth; expenses ex-notables to ~+3% YoY; fee growth “up YoY”; tax rate 22–23%; total payout ~100% ±; board declared 13% dividend hike to $0.53 for 3Q25 and continued buybacks .
  • Street comparison: Q2 EPS and revenue beat consensus; see Estimates Context for details (S&P Global).*

What Went Well and What Went Wrong

What Went Well

  • Record scale and profitability: “Total revenue was up 9% year-over-year and for the first time exceeded $5 billion… pre-tax margin of 37% and ROTCE of 28%” — CEO Robin Vince .
  • Engines firing: Securities Services revenue +10% YoY (PT margin 35%) and Market & Wealth Services +13% YoY (PT margin 49%) on higher client activity, FX volatility, collateral balances, and NII .
  • Capital returns and dividend action: $1.2B returned in Q2 (dividends $346mm; buybacks $895mm); 92% YTD payout; board declared $0.53 dividend for Q3 (+13%) .

What Went Wrong

  • Investment & Wealth Management softness: revenue -2% YoY; $17B net outflows (index, multi-asset, equity), partially offset by cash/fixed income inflows; margin 19% despite sequential improvement from 8% in Q1 .
  • NIM down 3 bps QoQ to 1.27% on deposit mix, partly offsetting balance sheet and reinvestment tailwinds .
  • Investment securities activity: $35mm net losses on sales within investment and other revenue .

Financial Results

MetricQ2 2024Q1 2025Q2 2025 (Actual)Q2 2025 (Consensus)*Surprise (Act - Cons)*
Total Revenue ($B)$4.60 $4.79 $5.03 $4.83*+$0.19*
Diluted EPS ($)$1.52 $1.58 $1.93 $1.76*+$0.17*
Adjusted Diluted EPS ($)$1.51 $1.58 $1.94 ——
Pre-tax Operating Margin (%)33% 32% 37% ——
ROE (%)12.7% 12.6% 14.7% ——
ROTCE (%)24.6% 24.2% 27.8% ——
Net Interest Income ($B)$1.03 $1.16 $1.20 ——
Fee Revenue ($B)$3.40 $3.40 $3.64 ——
Noninterest Expense ($B)$3.07 $3.25 $3.21 ——
Provision for Credit Losses ($MM)$0 $18 $(17) ——
  • Notes: Consensus values marked with * are from S&P Global; see Estimates Context. Values retrieved from S&P Global.*

Segment performance

SegmentQ2 2024 Revenue ($B)Q1 2025 Revenue ($B)Q2 2025 Revenue ($B)Q2 2024 PT MarginQ1 2025 PT MarginQ2 2025 PT Margin
Securities Services$2.24 $2.30 $2.47 31% 31% 35%
Market & Wealth Services$1.54 $1.69 $1.74 46% 48% 49%
Investment & Wealth Mgmt$0.82 $0.78 $0.80 18% 8% 19%

KPIs

KPIQ2 2024Q1 2025Q2 2025
AUC/A (trillions)$49.5 $53.1 $55.8
AUM (trillions)$2.05 $2.01 $2.11
Average Deposits ($B)$284.8 $282.5 $300.3
Net Interest Margin (%)1.15% 1.30% 1.27%
CET1 Ratio (%)11.4% 11.5% 11.5%
Tier 1 Leverage (%)5.8% 6.2% 6.1%
Common Div/Share ($)$0.42 $0.47 $0.53 (declared for 3Q25)
Capital Returned ($MM)——Dividends $346; Buybacks $895

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Interest IncomeFY 2025Up mid-single-digits YoY Up high-single-digits YoY Raised
Fee RevenueFY 2025Up YoY Up YoY Maintained
Expenses (ex-notables)FY 2025Up 1–2% YoY Up ~3% YoY Raised
Effective Tax RateFY 202522–23% 22–23% (2H ~23%) Maintained
Total Payout RatioFY 2025~100% ± ~100% ± Maintained
Quarterly Common Dividend3Q 2025Intent to raise to $0.53 Declared $0.53 payable Aug 7, 2025 Implemented
Share RepurchasesFY 2025Continue under program Continue under program Maintained

Earnings Call Themes & Trends

TopicQ4 2024 (Q-2)Q1 2025 (Q-1)Q2 2025 (Current)Trend
AI/TechnologyEliza platform adoption ~36% in FY24 snapshot Eliza adoption rising into 1H25; early digital employees “Nearly all employees are using Eliza”; digital employees introduced; medium/long-term P&L impact expected Accelerating adoption
Platforms Operating ModelFoundations laid; first platforms activated in early 2024 Transition ongoing>50% of employees transitioned; driving faster delivery, efficiency; supports operating leverage Maturing with visible benefits
Macro/Deposits/NIIReduced rate sensitivity “tails” via actions late 2024 NII momentum continuesAvg deposits +6% QoQ; NII +4% QoQ; expect Q3 deposit moderation; still confident on FY NII guide Constructive, moderating Q3
Digital Assets/Stablecoins——Selected reserve custodian for SocGen USD stablecoin; to act as primary custodian for Ripple’s USD stablecoin reserves; positioning across issuance-to-ops stack Expanding opportunity set
Pricing——Repricing down ~80% vs three years ago; overall “flat to slightly positive” YTD across firm Improving pricing environment
IWM (flows/margins)—Rebates accounting change started 1Q25 Net outflows $17B; margin 19% (up from 8% in Q1); focus on product + distribution synergy (1BNY) Sequential improvement; still work to do

Management Commentary

  • “BNY delivered a strong performance… revenue… exceeded $5 billion… improved pre-tax margin of 37% and an ROTCE of 28%.” — Robin Vince, CEO .
  • “We generated another quarter of significant positive operating leverage… in what is seasonally our strongest quarter, our pre-tax margin improved to 37%.” — Robin Vince .
  • “Positive operating leverage [is] our North Star… revenue up 9%, expenses up 4%.” — Dermot McDonogh, CFO .
  • “We now expect full year 2025 net interest income to be up high single-digit percentage points… expenses excluding notable items… up approximately 3%… total payout ratio roughly 100% ±.” — CFO .
  • On M&A: “Very high bar… focused on organic growth; open to sensible capability buys (e.g., Archer) if they make sense.” — CEO .

Q&A Highlights

  • Capital allocation and M&A: Emphasis on organic growth; M&A as a high-bar tool; capability buys preferred; any larger deal must fit strategy, culture, and economics .
  • Deposits/NII: Q2 deposit strength partly from corporate trust escrows (M&A activity); expect moderation in Q3; confidence in high-single-digit NII growth for FY25 reiterated .
  • AI impact: Company-wide adoption of Eliza and digital employees; viewed as both revenue enabler and expense lever over medium/long term; limited current P&L contribution .
  • Pricing: Repricing pressure materially eased; pricing “flat to slightly positive” across LOBs; down ~80% vs three years ago .
  • IWM trajectory: New leadership driving efficiency and cross-firm distribution; sequential margin recovery; focus on product shaping to match distribution channels (1BNY approach) .

Estimates Context

  • Q2 2025 EPS: Actual $1.93 (GAAP), $1.94 adjusted; Street consensus $1.76; beat ~$0.17 per share.*
  • Q2 2025 Revenue: Actual $5.03B; Street consensus $4.83B; beat ~$0.19B.*
  • Source and note: Consensus and “actual” figures in this section marked with * are from S&P Global. Values retrieved from S&P Global.*
MetricQ2 2025 ActualQ2 2025 Consensus*Surprise*
Diluted EPS ($)$1.93 (GAAP) / $1.94 (Adj) $1.76*+$0.17*
Total Revenue ($B)$5.03 $4.83*+$0.19*

Where estimates may adjust: upward revisions likely for NII trajectory given the raised FY guide; fee outlook remains market-dependent; IWM flows/margins could temper medium-term profit trajectory assumptions .

Key Takeaways for Investors

  • Broad-based beat with strong operating leverage; quality driven by Securities Services and Market & Wealth Services margin expansion and NII strength .
  • FY25 outlook improved on NII and expenses; management reaffirmed disciplined but high payout (~100% ±) and executed a 13% dividend lift to $0.53 for Q3 .
  • Strategic pivot to platform model and AI adoption is showing early operating benefits; deeper gains expected over 2026–2028 as the model matures .
  • IWM remains the laggard (outflows, lower growth), but leadership and 1BNY distribution strategy aim to improve mix and margins over time .
  • Deposit moderation expected in Q3; nonetheless, NII sensitivity has been reduced and guidance raised, supporting near-term earnings stability .
  • Digital assets custody/stablecoin roles enhance strategic optionality across multiple BNY platforms and can be a medium-term growth vector .
  • Risk watch: Securities losses, FX volatility, deposit mix/NIM drift, and market-dependent fee revenue remain key variables .

Additional detail and source documents:

  • Q2 2025 8-K with Earnings Release and Financial Supplement (EX-99.1/99.2): revenue $5.028B; EPS $1.93; operating metrics and segment detail .
  • Quarterly Update Presentation (EX-99.3): updated FY25 outlook; operating leverage; capital returns; AI/platform updates .
  • Q2 2025 Earnings Call Transcript: management commentary, Q&A themes, guidance clarification .
  • Dividend press releases: intention to increase (July 1) and declaration at $0.53 (July 15) .
  • Capital action: senior notes redemption announcement (July 17) .