Growth in NII, Fee Income to Support BNY Mellon's Q2 Earnings

The Bank of New York Mellon Corporation BK is scheduled to report second-quarter 2025 results on July 15, before market open. The company’s quarterly revenues and earnings are expected to have increased on a year-over-year basis.

In the last reported quarter, BK’s earnings surpassed the Zacks Consensus Estimate. Results were primarily aided by a rise in fee revenues and net interest income (NII), alongside lower provisions. Assets under custody and/or administration balance grew on higher inflows. However, higher expenses and lower assets under management balances were the undermining factors.

BNY Mellon has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average beat being 7.4%.

The Bank of New York Mellon Corporation Price and EPS Surprise

 

The Bank of New York Mellon Corporation price-eps-surprise | The Bank of New York Mellon Corporation Quote

The consensus estimate for the company’s second-quarter earnings is pegged at $1.73 per share, which has been unchanged over the past seven days. The figure reflects a rise of 14.6% from the year-ago quarter’s reported number.

The consensus estimate for sales is pegged at $4.85 billion, implying 5.6% year-over-year growth.

BNY Mellon’s Other Key Estimates for Q2

Fee Revenues: The Zacks Consensus Estimate for total investment services fees (constituting more than 50% of the company’s total revenues) is pegged at $2.49 billion, suggesting a rise of 5.5% from the year-ago quarter’s actual. Our estimate for the metric is $2.45 billion.

The consensus mark for financing-related fees stands at $55 million, which suggests a 3.8% year-over-year rise. Our estimate for financing-related fees is $55.6 million.

The consensus estimate for distribution and servicing fees is pegged at $38.08 million, implying a 7.1% year-over-year decline. Our estimate for the same is $39.1 million.

Because of global trade tensions and tariff-related uncertainty, there was an increase in foreign exchange (FX) trading volumes and volatility in the second quarter. This is expected to have had a positive impact on BNY Mellon’s FX revenues. The consensus estimate for foreign exchange revenues stands at $185 million, suggesting a marginal rise from the year-ago quarter. Our estimate for the same is $182.5 million.

The consensus estimate for total fees and other revenues is $3.71 billion, suggesting a rise of 4% from the year-ago quarter’s actual. We project the metric to be $3.69 billion.

NII: Because of the uncertainty surrounding the impacts of Trump’s tariff policy on the economy, the Federal Reserve kept interest rates unchanged at 4.25-4.5% in the second quarter of 2025. Per the Fed’s latest data, despite an uncertain macroeconomic backdrop, the lending scenario was decent in April and May, which is expected to have resulted in an increase in overall loan balances in the quarter.

Thus, amid gradually stabilizing funding costs, relatively higher rates and loan growth are expected to have positively impacted BNY Mellon’s NII in the quarter.

The consensus mark for NII is pegged at $1.14 billion, indicating a 10.9% year-over-year rise. We expect NII to be $1.10 billion.

Expenses: Because of higher restructuring charges and buyouts, BNY Mellon’s expenses have been elevated over the past few years. In the second quarter, overall costs are expected to have increased, driven by inflationary pressure, technology upgrades and a multi-year transformation plan.

Our estimate for non-interest expenses is $3.23 billion, suggesting a 5.3% year-over-year rise.

What the Zacks Model Unveils for BK

According to our quantitative model, the chances of BNY Mellon beating the Zacks Consensus Estimate this time are low. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for BNY Mellon is -0.14%.

Zacks Rank: The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bank Stocks That Warrant a Look

Here are a couple of bank stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time:

The Earnings ESP for Northern Trust Corporation NTRS is +1.56% and it sports a Zacks Rank #1 at present. The company is slated to report second-quarter 2025 results on July 23.

Over the past seven days, the Zacks Consensus Estimate for Northern Trust’s quarterly earnings has been unchanged at $2.04.

Prosperity Bancshares, Inc. PB is also scheduled to announce second-quarter 2025 results on July 23. The company has a Zacks Rank #3 and an Earnings ESP of +1.33% at present. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Quarterly earnings estimates for Prosperity Bancshares have been unchanged at $1.40 over the past week.

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This article originally published on Zacks Investment Research (zacks.com).

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