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    BNY
    Earnings call· Jun 2026(Q2 FY26)

    Bank of New York Mellon Q2 FY26 earnings call BNY

    Jul 15, 2026 Source

    Executive summary

    BNY Mellon Q2 FY26 — Record Revenue and Strong Operating Leverage

    BNY Mellon delivered strong Q2 FY26 results, driven by broad-based growth and the successful activation of its new operating and commercial models. The company is capitalizing on foundational work, focusing on innovation in AI and digital assets to enhance client solutions and drive durable growth. Management expressed confidence in its strategy, expecting continued momentum into the second half of the year despite anticipating seasonal slowdowns.

    Highlights

    5

    • Earnings per share increased by 27% year-over-year to $2.45.

    • Total revenue grew 13% year-over-year to a record $5.7 billion.

    • Generated approximately 600 basis points of positive operating leverage.

    • Pretax margin expanded to 40% and return on tangible common equity to 31%.

    • Achieved 14th consecutive quarter of year-over-year sales growth, with average deal size up over 20%.

    Guidance & targets

    5
    CategoryTargetConfidence
    Full-year 2026 total revenue (excluding notable items)
    up 10% to 11% year-over-year
    high materiality
    High
    Full-year 2026 net interest income
    up 12% to 13% year-over-year
    high materiality
    High
    Full-year 2026 expenses (excluding notable items)
    up 6% to 7% year-over-year
    high materiality
    High
    Full-year 2026 positive operating leverage
    approximately 400 basis points
    high materiality
    High
    Quarterly tax rate
    approximately 23%
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Securities Services
    Growth driven by higher client activity, market values, and net new business. Issuer Services benefited from higher corporate trust fees, including a public sector mandate, and seasonal depository receipts activity.
    Total Investment Services fees: up 15% YoYAsset Servicing Investment Services fees: grew 12% YoYETF AUCA: $4.4 trillion, up 35% YoYAlternatives AUCA: grew 17% YoYIssuer Services Investment Services fees: up 23% YoYCLO market share: #2 position, grew 200 bps YoYConventional debt servicing market share: #1 position, grew 400 bps YoYForeign exchange revenue: up 16% YoYNet interest income: up 16% YoY
    		$2.8 billion15%—39% pretax margin
    Market and Wealth Services
    Strong performance across the segment, with Wealth Solutions benefiting from market values and client activity, and Clearance and Collateral Management showing strong momentum from collateral balances and clearing volumes. Payments and Trade saw solid growth in international payments.
    Total Investment Services fees: up 10% YoYWealth Solutions Investment Services fees: up 5% YoYWealth Solutions net new assets: $25 billionWealth Solutions annualized growth rate: 4%Clearance and Collateral Management Investment Services fees: up 18% YoYAverage collateral balances: $8.2 trillion, up 16% YoYAverage daily clearing volumes: double-digit YoY growthPayments and Trade Investment Services fees: up 7% YoYNet interest income: up 21% YoY
    		$2.0 billion12%—52% pretax margin
    Investment and Wealth Management
    Growth primarily driven by higher market values, partially offset by the mix of AUM flows. Net inflows were concentrated in cash and fixed income strategies, offset by outflows in LDI index and equity strategies.
    Investment management fees: up 6% YoYAssets under management: $2.2 trillion, up 6% YoYNet inflows (AUM): $3 billionWealth Management client assets: $348 billion, up 3% YoY
    		$863 million8%—21% pretax margin

    Operational metrics

    22
    Investment and other revenue
    $216 million
    Q2 FY26

    Reported for the quarter.

    Total operating expenses
    $3.4 billionup 7% YoY
    Q2 FY26

    Reported on both a reported basis and excluding notable items.

    EPS (excluding notable items)
    $2.46up 27% YoY
    Q2 FY26

    Adjusted EPS figure.

    Securities Services segment expenses
    $1.7 billionup 7% YoY
    Q2 FY26

    Primarily driven by higher revenue-related expenses, investments, and salary increases, partially offset by efficiency savings.

    Market and Wealth Services segment expenses
    $948 millionup 4% YoY
    Q2 FY26

    Primarily driven by higher investments and revenue-related expenses, as well as salary increases, partially offset by efficiency savings and absence of prior year litigation reserves.

    Investment and Wealth Management segment expenses
    $686 millionup 5% YoY
    Q2 FY26

    Primarily driven by higher revenue-related expenses and investments, as well as salary increases, partially offset by efficiency savings.

    Tier 1 leverage ratio
    5.9%down 7 bps sequentially
    Q2 FY26

    Reflects a decrease in Tier 1 capital and an increase in average assets.

    Capital returned to common shareholders
    $1.5 billion$2.8 billion YTD
    Q2 FY26

    Includes common stock repurchases and dividends.

    Quarterly common stock dividend
    $0.63 per shareup 19%
    Q2 FY26

    Increased as previously announced.

    Consolidated liquidity coverage ratio (LCR)
    111%
    Q2 FY26

    Indicates strong liquidity.

    Net stable funding ratio (NSFR)
    130%
    Q2 FY26

    Indicates strong funding stability.

    Average deposit balances
    moderated by 1%sequentially
    Q2 FY26

    Overall deposit trend.

    Average interest-earning assets
    flatsequentially
    Q2 FY26

    Overall trend in interest-earning assets.

    Provision for credit losses
    $8 million benefit
    Q2 FY26

    Reflecting improvements in commercial real estate exposure, with 0 nonperforming assets.

    Average deal size growth
    more than 20%YoY
    Q2 FY26

    Reflects momentum in the commercial model.

    New client deals
    approximately 10%
    Q2 FY26

    Percentage of deals with clients entirely new to BNY Mellon.

    Headcount
    down 7%YoY
    Q2 FY26

    An output of workforce management and efficiency efforts.

    Comp expense per head
    up 8%YoY
    Q2 FY26

    Reflects increased productivity and repositioning of talent.

    Comp expense per head (from peak)
    up 17%from peak headcount
    Q2 FY26

    Reflects long-term trend of increased productivity.

    Engineering budget
    approximately $4 billion
    annual

    Total budget for technology investments.

    Software written using AI
    approximately 40%
    current

    Reflects the deep integration of AI into the enterprise.

    Clients buying 3+ lines of business
    up greater than 60%
    last 3 years

    Demonstrates the efficacy of the commercial model and increased client engagement across offerings.

    Industry KPIs

    3
    MetricValueDetails
    AUM$2.2 trillionUSD
    Fundraising inflows$3 billionUSD
    Performance revenueup 5%%

    Product announcements

    2
    ProductTypeDetails
    24/7 U.S. dollar book transferslaunch
    Same-day FX wire settlement coverageexpansion

    Deals & partnerships

    3
    Circlepartnership

    Expanded relationship to integrate institutional digital asset custody with mint and burn capabilities for USDC within a single operating model. Aims to enable seamless movement between traditional cash and blockchain-based networks.

    Ceteracustomer contractmultiyear

    Wealth Solutions signed a multiyear contract renewal with Cetera, one of the largest wealth management firms in the U.S. and a long-standing partner.

    U.S. Treasury Departmentcustomer contract

    BNY Mellon is supporting the U.S. Treasury Department as the financial agent for 'Trump accounts', leveraging capabilities from across BNY's platforms. This mandate went live on July 1.

    Q&A highlights

    7

    Why is the updated full-year guidance lower than the strong Q2 performance, considering Q3 is seasonally slower and there might be tough comps for NII and Issuer Services?

    Q2 was exceptionally strong due to market conditions, and Q3 is typically the slowest quarter. The guidance incorporates a conservative bias, assuming current market levels and interest rates. Q3 NII will face a tough year-over-year comparison due to idiosyncratic events in the prior year.

    “typically, the second quarter is our strongest quarter and this particular quarter had a unique set of circumstances around it in terms of the constructed backdrop, the flows in the markets, et cetera. And is seasonally the slowest quarter.”

    asked by Kenneth Usdin · answered by Robin Vince

    2 min read6 chapters

    Detailed Narrative

    01

    Commercial Model Momentum

    BNY Mellon's commercial model, now in place for two years, is driving significant momentum. The second quarter marked the 14th consecutive quarter of year-over-year sales growth, with two consecutive record sales quarters year-to-date. The average deal size has increased by over 20% year-over-year, and approximately 10% of deals are with clients entirely new to BNY. This indicates successful market penetration and deeper client relationships.

    02

    Platform Operating Model Benefits

    The transition to the new platform operating model is complete, shifting focus from implementation to realizing its benefits. This model enables faster collaboration, more consistent innovation, and integrated solutions. Early progress includes more nimble operations, bringing product, technology, operations, and commercial teams together to respond quickly to evolving client needs and build more comprehensive solutions.

    03

    Innovation in Digital Assets and Always-On Ecosystem

    BNY Mellon is actively investing in the shift towards an 'always-on' financial ecosystem, encompassing real-time payments, tokenized assets, and digital cash. A key development in Q2 was the expanded relationship with Circle, integrating institutional digital asset custody with mint and burn capabilities for USDC within a single operating model. This aims to bridge traditional and blockchain-based networks, enhancing efficiency and resilience for clients.

    04

    AI as a Value Creator

    The company views AI as a critical long-term opportunity, embedding it across operations to strengthen innovation and client delivery. AI is creating value by improving internal productivity and capacity, enabling better product development and client experiences, and expanding BNY's market perimeter through new capabilities. While early, AI is showing tangible impact across the client lifecycle, with approximately 40% of software now written using AI.

    05

    Capital and Liquidity Strength

    BNY Mellon maintains a strong capital and liquidity position. The CET1 ratio stood at 11% and the Tier 1 leverage ratio at 5.9% at quarter-end. The consolidated liquidity coverage ratio was 111% and the net stable funding ratio was 130%. The company returned approximately $1.5 billion of capital to common shareholders in Q2, totaling $2.8 billion for the first half of the year, representing an 87% payout ratio. The quarterly common stock dividend was increased by 19% to $0.63 per share.

    06

    NII and Balance Sheet Trends

    Net interest income (NII) increased by 20% year-over-year and 6% quarter-over-quarter to $1.4 billion, driven by the reinvestment of investment securities at higher yields and balance sheet growth. Average deposit balances moderated slightly by 1% sequentially, with noninterest-bearing deposits remaining flat. Loans increased by 6% sequentially, primarily due to growth in securities finance, which are short-term, collateralized, and low-risk.

    AI-generated summary of the company’s earnings call. Not investment advice.