10-K · February 25, 2026
The Bank of New York Mellon Corporation (BNY) reported steady growth in its financial performance in 2025, with significant attention on enhancing operational efficiencies and capital strategies. Focused on…
Earnings analysis · 10-Q
BNY earnings analysis
Filed October 30, 2026 · Our reading of the company's report
The latest report
BNY delivered strong year-over-year growth in the third quarter, with revenue up 12% to $5.676 billion and GAAP diluted EPS up 24% to $2.34, supported by broad-based segment growth and higher fee revenue. Securities…
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BNY delivered strong year-over-year growth in the third quarter, with revenue up 12% to $5.676 billion and GAAP diluted EPS up 24% to $2.34, supported by broad-based segment growth and higher fee revenue. Securities Services and Market and Wealth Services led performance, while Investment and Wealth Management also improved profitability despite net outflows and mix pressure. The main offsets are sequential revenue and margin declines, increased unrealized securities losses, lower capital ratios, and limited goodwill impairment headroom.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
Reported figures
- Earnings per share
- $2.34
- Operating margin
- 38.5%
What stood out
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Revenue grew 12% year over year
Total revenue was $5.676 billion, up 12% from $5.081 billion in the prior-year quarter, although it declined from $5.698 billion in the second quarter. Fee and other revenue increased 11% to $4.253 billion, while net interest income rose 15% to $1.423 billion year over year.
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Strong EPS and earnings growth
GAAP diluted EPS increased 24% to $2.34 from $1.88 in the prior-year quarter, while adjusted diluted EPS was $2.37 versus $1.91. Net income applicable to common shareholders increased 20% to $1.608 billion from $1.339 billion.
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Securities Services led segment growth
Securities Services was the largest growth contributor, with revenue of $2.820 billion, up 15%, and income before taxes of $1.008 billion, up 24%. Issuer Services revenue rose 27% to $690 million, while Asset Servicing revenue increased 12% to $2.130 billion.
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Market and Wealth Services expanded
Market and Wealth Services revenue increased 12% to $1.984 billion, led by Payments and Trade revenue of $579 million, up 14%, and Clearance and Collateral Management revenue of $592 million, up 12%. The segment’s pre-tax operating margin improved to 51.4% from 48.9%.
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Asset metrics supported fee growth
Assets under custody and/or administration increased 10% to $63.4 trillion, and assets under management increased 2% to $2.2 trillion. Securities lending revenue rose 48% to $92 million.
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Operating cash flow strengthened
Operating cash flow was $4.182 billion for the first nine months of 2026 versus $1.545 billion in the prior-year period. Purchases of premises and equipment and capitalized software were $1.787 billion, representing approximately 43% of operating cash flow, while the filing does not disclose free cash flow.
What to watch
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Sequential margin compression
The pre-tax operating margin declined to 38.5% from 39.8% in the second quarter, despite increasing from 36.4% in the prior-year quarter. Noninterest expense rose 8% year over year to $3.489 billion, primarily due to higher revenue-related expenses and investments.
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Capital affected by OCI losses
The standardized CET1 ratio fell to 11.0% from 11.9% at Dec. 31, 2025, and total shareholders’ equity declined to $43.6 billion from $44.3 billion. The after-tax unrealized loss on available-for-sale securities increased to $1.5 billion from $241 million, primarily reflecting higher interest rates.
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Limited goodwill impairment cushion
The Investment Management reporting unit had $6.3 billion of allocated goodwill, and its estimated fair value exceeded carrying value by only approximately 3%. A 25-basis-point increase in the discount rate would reduce estimated fair value by approximately 5%, creating impairment sensitivity.
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Higher lending and macro exposure
Total lending-related exposure increased 6% to $139.1 billion from $131.8 billion at Dec. 31, 2025, including margin loan exposure of $31.0 billion versus $26.6 billion. Management stated that applying 100% weighting to the downside macroeconomic scenario would have increased the allowance for credit losses by approximately $91 million.
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Securities losses remain elevated
BNY reported $6.1 billion of net unrealized losses in its investment securities portfolio, compared with $3.0 billion at Dec. 31, 2025. The portfolio included $4.171 billion of net unrealized losses in held-to-maturity securities, increasing sensitivity to higher interest rates and liquidity needs.
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Technology and regulatory risks expanded
The filing identifies new or heightened technology-related risks from artificial intelligence and quantum computing, stating that AI-enhanced threats and quantum-related cryptography vulnerabilities could increase the likelihood or severity of cybersecurity incidents. It also notes that the OCC’s GENIUS Act implementation rule becomes effective Jan. 18, 2027, creating additional stablecoin-related regulatory requirements.
Management's outlook
The 10-Q does not provide explicit numeric revenue or EPS guidance. Management provides sensitivity and forward-looking information, including that a 5% change in global equity markets would affect diluted EPS by $0.05 to $0.08, but no formal outlook range is disclosed.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.