BNY Mellon Q3 Earnings Top on Higher NII & Fee Income, Expenses Rise

The Bank of New York Mellon Corporation’s BK third-quarter 2025 adjusted earnings of $1.91 per share surpassed the Zacks Consensus Estimate of $1.76. Also, the bottom line reflected a jump of 25.7% from the prior-year quarter.

Results were primarily aided by a rise in fee revenues and net interest income (NII). Also, the company recorded a provision benefit in the quarter, which was a tailwind. Growth in assets under custody and/or administration (AUC/A) further supported results. However, higher expenses and lower assets under management (AUM) balances were undermining factors.

The results excluded certain non-recurring items. Considering those, net income applicable to common shareholders (GAAP basis) was $1.34 billion, up 20.6% from the year-ago quarter. We had projected net income applicable to common shareholders of $1.15 billion.

BK’s Revenues Improve, Expenses Rise

Total revenues increased 9.3% year over year to $5.08 billion. The top line surpassed the Zacks Consensus Estimate of $4.96 billion.

NII was $1.24 billion, up 17.9% year over year. The rise reflected the continued reinvestment of maturing investment securities at higher yields and balance sheet growth, partially offset by changes in deposit mix. Our estimate for the metric was $1.12 billion.

Net interest margin (NIM) expanded 15 basis points (bps) year over year to 1.31%. Our estimate for NIM was 1.24%.

Total fees and other revenues increased 6.8% year over year to $3.85 billion. The rise was driven by an increase in investment services fees, financing-related fees and investment and other revenues. Our estimate for the same was $3.75 billion.

Total non-interest expenses (GAAP basis) were $3.24 billion, up 4.4% from the prior-year quarter. The rise was due to an increase in almost all the cost components except for distribution and servicing costs. We had projected non-interest expenses of $3.25 billion.

BNY Mellon’s Asset Balances: Mixed Bag

As of Sept. 30, 2025, AUM was $2.14 trillion, down marginally year over year. The decline reflected cumulative net outflows, partially offset by higher market values. Our estimate for AUM was also $2.14 trillion.

AUC/A of $57.8 trillion increased 10.9% year over year, primarily reflecting client inflows and higher market values.

BK’s Credit Quality Improves

The allowance for loan losses, as a percentage of total loans, was 0.36%, down 7 bps from the prior-year quarter. As of Sept. 30, 2025, non-performing assets were $160 million, down from $211 million in the year-ago quarter.

In the reported quarter, the company recorded a provision benefit of $7 million, primarily driven by changes in macroeconomic forecast, partly offset by higher reserves related to commercial real estate exposure. In the prior-year quarter, provisions were $23 million. We had expected provisions to be $16.4 million.

BNY Mellon’s Capital Position: Mixed Bag

As of Sept. 30, 2025, the common equity Tier 1 ratio was 11.7%, down from 11.9% as of Sept. 30, 2024. The Tier 1 leverage ratio was 6.1%, up from 6% as of Sept. 30, 2024.

BK’s Share Repurchase Update

In the reported quarter, BNY Mellon repurchased shares worth $849 million.

Our Take on BNY Mellon

Relatively higher interest rates, BK’s global expansion efforts and a strong balance sheet position are likely to keep supporting its top-line growth. Also, a robust AUM balance is another positive. However, concentration risk due to the company’s higher dependence on fee-based revenues and elevated expenses is worrisome.

The Bank of New York Mellon Corporation Price, Consensus and EPS Surprise

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

Currently, BNY Mellon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Release Dates of Other Major Banks

Truist Financial Corporation TFC is slated to report quarterly results on Oct. 17. The Zacks Consensus Estimate for Truist’s third-quarter earnings has been revised 1% upward over the past seven days.

BankUnited, Inc. BKU is scheduled to report quarterly results on Oct. 22. The Zacks Consensus Estimate for BankUnited’s third-quarter earnings has been unchanged over the past seven days at 84 cents.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research