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Bank of New York Mellon Corp (BK)·Q3 2025 Earnings Summary

Executive Summary

  • Record revenue of $5.081B (+9% YoY) with positive operating leverage and pre-tax margin at 36%; diluted EPS $1.88 (+25% YoY), adjusted EPS $1.91; ROTCE 25.6% .
  • Beat vs consensus on adjusted EPS and revenue: Primary EPS consensus $1.77*, actual adjusted EPS $1.91; revenue consensus $4.98B*, actual $5.08B. GAAP EPS was $1.88. Bold beat on adjusted EPS and revenue. Values retrieved from S&P Global* .
  • Segment strength: Securities Services revenue $2.459B (+11% YoY), Market & Wealth Services $1.767B (+14% YoY); Investment & Wealth Management $824M (-3% YoY) with expense discipline and margin expansion .
  • Capital return remains robust: $1.2B to common shareholders in Q3 (dividends $381M, buybacks $849M); CET1 11.7%, Tier 1 leverage 6.1% .
  • FY guidance: Q4 NII approximately flat sequentially; full-year 2025 NII up ~12% YoY; expenses ex-notables up ~3% YoY; Q4 effective tax rate ~21%, FY 21–22%; total payout ratio 90–100% for FY25 .

What Went Well and What Went Wrong

What Went Well

  • Broad-based revenue growth: total revenue up 9% YoY to $5.081B; fee revenue +7%, NII +18% YoY; operating leverage improved and pre-tax margin expanded to 36% .
  • Segment execution: Securities Services and Market & Wealth Services delivered double-digit YoY revenue growth; Securities Services margin 33%, Markets & Wealth margin 50% .
  • Strategic progress and AI adoption: “We are embracing the power of AI … launched the next version of BNY’s AI platform, Eliza – smarter, faster and easier to use,” with 117 AI solutions in production (+75% QoQ), and partnerships in tokenization and money markets (Goldman blockchain mirror record, OpenEden) .

What Went Wrong

  • Sequential softness: diluted GAAP EPS declined to $1.88 from $1.93 in Q2; pre-tax margin fell 100 bps QoQ to 36% .
  • Investment & Wealth Management revenue down 3% YoY amidst cumulative net outflows; long-term strategies net outflows of $25B in Q3 partially offset by $34B inflows to cash .
  • FX and Issuer Services sequentially weaker: FX revenue and Issuer Services decreased QoQ, while noninterest expense rose QoQ, including litigation reserves; Other segment showed revenue pressure from net securities losses .

Financial Results

Consolidated Financials

MetricQ1 2025Q2 2025Q3 2025
Total Revenue ($USD Millions)4,792 5,028 5,081
Total Fee Revenue ($USD Millions)3,403 3,641 3,637
Net Interest Income ($USD Millions)1,159 1,203 1,236
Noninterest Expense ($USD Millions)3,252 3,206 3,236
Diluted EPS (GAAP, $USD)1.58 1.93 1.88
Adjusted Diluted EPS (Non-GAAP, $USD)1.58 1.94 1.91
Pre-tax Operating Margin (%)32% 37% 36%
ROE (%)12.6% 14.7% 13.7%
ROTCE (%)24.2% 27.8% 25.6%

Actuals vs Wall Street Consensus (Q3 2025)

MetricConsensusActual
Primary EPS (Adjusted) ($USD)1.77*1.91
Revenue ($USD Millions)4,976.7*5,081
Diluted EPS (GAAP) ($USD)—1.88

Values retrieved from S&P Global*.
Bold beat on adjusted EPS and revenue.

Segment Revenue and Margins

Segment Total Revenue ($USD Millions)Q1 2025Q2 2025Q3 2025
Securities Services2,300 2,474 2,459
Market & Wealth Services1,686 1,742 1,767
Investment & Wealth Management779 801 824
Segment Pre-tax Margin (%)Q1 2025Q2 2025Q3 2025
Securities Services31% 35% 33%
Market & Wealth Services48% 49% 50%
Investment & Wealth Management8% 19% 22%

KPIs and Balance Sheet

KPIQ1 2025Q2 2025Q3 2025
AUC/A (Trillions)53.1 55.8 57.8
AUM (Trillions)2.01 2.11 2.1
Average Deposits ($USD Millions)282,535 300,298 299,326
Net Interest Margin (%)1.30 1.27 1.31
CET1 Ratio (%)11.5 11.5 11.7
Tier 1 Leverage Ratio (%)6.2 6.1 6.1
Securities Lending Revenue ($USD Millions)52 56 62
Avg. Collateral Balances (Clearance & Collateral, $USD Billions)6,576 7,061 7,275
Pershing DARTs (U.S., ‘000)298 334 269
Pershing Net New Assets (U.S., $USD Billions)11 (10) 3

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Interest Income (Sequential)Q4 2025N/AApproximately flat New
Net Interest Income (YoY)FY 2025N/AUp ~12% YoY New
Expenses ex-notables (YoY)FY 2025~+3% YoY (updated in Q2) ~+3% YoY Maintained
Effective Tax RateQ4 2025N/A~21% New
Effective Tax RateFY 2025N/A21–22% New
Total Payout RatioFY 2025~100% +/– (Q2 outlook) 90–100% Lower range
Common DividendQ3 2025Intention to increase (Q2) Declared $0.53 (payable Nov 7) Implemented

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2, Q1)Current Period (Q3)Trend
AI/technology initiativesQ2: accelerating AI solutions and digital employees; mid-year business update . Q1: transformation framework .117 AI solutions in production (+75% QoQ); launch of Eliza 2.0; digital employees via agentik.ai .Strong acceleration
Platforms operating model>50% employees transitioned by end of 1H25 .>70% transitioned; full transition over next year; benefits fully realized by early 2028 .Progressing
Digital assets/tokenizationProduct innovation emphasis (Q2 update) .Goldman collaboration on blockchain mirror records; Dreyfus token-enabled share class; OpenEden tokenized T-bills; enabling stablecoin ecosystem .Accelerating
Macro and ratesQ1: prepared for uncertainty . Q2: deposits up, NII strength .Fed resumed rate cuts; Q4 NII flat seq.; FY NII +12% YoY .Cautiously constructive
Capital returnsQ1 payout 95% ; Q2 payout 89% .YTD payout 92%; FY guide 90–100% .Sustained high returns
Segment momentumQ1/Q2 double-digit growth in Securities & Markets .Continuation: Securities +11% YoY; Markets +14% YoY .Robust

Management Commentary

  • “BNY delivered another quarter of strong results. Record revenue of $5.1 billion was up 9% year-over-year… pre-tax margin of 36%… ROTCE of 26%… EPS $1.88 up 25% year-over-year.” – Robin Vince, CEO .
  • “Our two core transformation programs are showing results… embracing the power of AI… launched… BNY’s AI platform, Eliza – smarter, faster and easier to use.” – Robin Vince .
  • “We saw broad based strength… double digit revenue growth across… Securities Services and Market and Wealth Services… generated a return on tangible common equity of 26%.” – Prepared remarks .
  • “Q4 NII approximately flat sequentially… full year 2025 NII up 12% YoY… expenses ex-notables up ~3% YoY… Q4 ETR ~21%; full-year 21–22%; payout ratio 90–100%.” – Dermot McDonogh, CFO .

Q&A Highlights

  • Growth drivers vs market beta: Management emphasized execution of commercial model and platform operating model delivering organic growth and multi-line solutions; fee growth a balanced mix of organic, market levels, FX .
  • NII strategy in lower-rate backdrop: Enhanced risk tools and balance sheet derisking; Q3 NII supported by CLO/M&A escrow balances; base case for Q4 balances flat sequentially .
  • Capital markets/securities lending: No step-function change expected; agency lending remains strong and adjacent to broader collateral franchise .
  • Pershing dynamics and TIAA Wove win: Deconversion noise now behind; expect net new assets to reaccelerate; over 50 Wove clients signed, TIAA selection validates platform .
  • Stablecoins and tokenization TAM: Long-term optionality; enabling ecosystem via custody, rails, clearing/collateral/mobility; margin risk mitigated by breadth and efficiency opportunities .
  • Operating leverage trajectory: Multi-year momentum from platforming, product innovation, and AI; internal benchmarks suggest continued positive leverage potential .
  • Buybacks appetite: Capital-light model; maintain disciplined returns with FY payout 90–100% .

Estimates Context

  • Q3 adjusted EPS beat and revenue beat: Primary EPS consensus $1.77* vs actual adjusted EPS $1.91; revenue consensus $4.98B* vs actual $5.08B. GAAP EPS was $1.88 .
  • Implications: Consensus likely to drift higher on fee/NII strength and sustained operating leverage; Investment & Wealth Management net outflows and FX sequential softness may cap upward revisions. Values retrieved from S&P Global*.

Key Takeaways for Investors

  • Sustained operating leverage and margin expansion with multi-platform growth underpinning double-digit ROTCE; positive revenue breadth across fee/NII .
  • Bold beat on adjusted EPS and revenue versus consensus supports near-term sentiment; capital returns remain a durable anchor (90–100% FY payout) .
  • Q4 NII guide flat sequentially and FY +12% YoY suggests resilience in lower-rate environment; deposit mix management and securities reinvestment continue to drive NII .
  • AI and digital asset initiatives (Eliza 2.0, tokenization partnerships, blockchain mirror) create medium-term efficiency and product optionality; platform operating model nearing full transition .
  • Watch Investment & Wealth Management trajectory: improving margins on lower expenses but net outflows persist; AUM flat YoY with cash inflows offsetting long-term outflows .
  • FX and issuer services sequential volatility merits monitoring; litigation reserves impacted expense QoQ .
  • Actionable: Favorable setup for estimate revisions in fee/NII lines, maintain focus on capital efficiency, and monitor execution milestones in AI/platforming that could unlock further operating leverage.