Custody Bank Stocks Q2 Recap: Benchmarking BNY Mellon (NYSE:BK)

Looking back on custody bank stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including BNY Mellon (NYSE:BK) and its peers.

Custody banks safeguard financial assets and provide services like settlement, accounting, and regulatory compliance for institutional investors. Growth opportunities stem from increasing global assets under custody, demand for data analytics, and blockchain technology adoption for settlement efficiency. Challenges include fee pressure from large clients, substantial technology investment requirements, and competition from both traditional players and fintech firms entering the space.

The 15 custody bank stocks we track reported a mixed Q2. As a group, revenues were in line with analysts’ consensus estimates.

In light of this news, share prices of the companies have held steady as they are up 3.5% on average since the latest earnings results.

BNY Mellon (NYSE:BK)

Tracing its roots back to 1784 when it was founded by Alexander Hamilton, BNY Mellon (NYSE:BK) is a global financial institution that provides asset servicing, wealth management, and investment services to institutions, corporations, and high-net-worth individuals.

BNY Mellon reported revenues of $5.03 billion, up 9.4% year on year. This print exceeded analysts’ expectations by 3.9%. Overall, it was a very strong quarter for the company with a beat of analysts’ EPS estimates.

The stock is up 15.1% since reporting and currently trades at $109.65.

Is now the time to buy BNY Mellon? Access our full analysis of the earnings results here, it’s free.

Best Q2: Voya Financial (NYSE:VOYA)

Originally spun off from Dutch financial giant ING in 2013 and rebranded with a name suggesting "voyage," Voya Financial (NYSE:VOYA) provides workplace benefits and savings solutions to U.S. employers, helping their employees achieve better financial outcomes through retirement plans and insurance products.

Voya Financial reported revenues of $1.9 billion, up 2.2% year on year, outperforming analysts’ expectations by 13.5%. The business had a stunning quarter with an impressive beat of analysts’ AUM and EPS estimates.

Voya Financial scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 11.7% since reporting. It currently trades at $75.78.

Is now the time to buy Voya Financial? Access our full analysis of the earnings results here, it’s free.

Slowest Q2: Franklin Resources (NYSE:BEN)

Operating under the widely recognized Franklin Templeton brand since 1947, Franklin Resources (NYSE:BEN) is a global investment management organization that offers financial services and solutions to individuals, institutions, and wealth advisors worldwide.

Franklin Resources reported revenues of $1.59 billion, down 3.7% year on year, falling short of analysts’ expectations by 18.8%. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates.

Franklin Resources delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 2.9% since the results and currently trades at $23.27.

Read our full analysis of Franklin Resources’s results here.

Federated Hermes (NYSE:FHI)

With roots dating back to 1955 and a pioneering role in money market funds, Federated Hermes (NYSE:FHI) is an investment management firm that offers a wide range of funds and strategies for institutional and individual investors.

Federated Hermes reported revenues of $424.8 million, up 5.5% year on year. This print was in line with analysts’ expectations. It was a strong quarter as it also produced an impressive beat of analysts’ EBITDA and EPS estimates.

The stock is up 4.4% since reporting and currently trades at $51.97.

Read our full, actionable report on Federated Hermes here, it’s free.

SEI Investments (NASDAQ:SEIC)

Founded in 1968 as Simulated Environments Inc. to train bank loan officers using computer simulations, SEI Investments (NASDAQ:SEIC) provides technology platforms, investment management, and operational solutions for financial institutions, wealth managers, and investors.

SEI Investments reported revenues of $559.6 million, up 7.8% year on year. This number missed analysts’ expectations by 0.7%. In spite of that, it was a very strong quarter as it logged a beat of analysts’ EPS estimates.

The stock is down 4.8% since reporting and currently trades at $85.70.

Read our full, actionable report on SEI Investments here, it’s free.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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