BNY Q4 Earnings Beat Estimates on Y/Y Growth in NII & Fee Income

The Bank of New York Mellon Corporation’s BK fourth-quarter 2025 adjusted earnings of $2.08 per share surpassed the Zacks Consensus Estimate of $1.97. Also, the bottom line reflected a jump of 20.9% from the prior-year quarter.

Results have been 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) and assets under management (AUM) balances further supported results. However, marginally higher expenses hurt the results to some extent.

The reported quarter’s results excluded certain non-recurring items. Considering those, net income applicable to common shareholders (GAAP basis) was $1.43 billion, up 26.3% from the year-ago quarter.

Adjusted earnings per share of $7.50 for 2025 surpassed the Zacks Consensus Estimate of $7.39. Also, the bottom line increased 24.4% from 2024. Net income applicable to common shareholders (GAAP basis) was $5.31 billion, up 22.4% from the previous year.

BK’s Revenues Improve, Expenses Rise Marginally

Total quarterly revenues increased 6.8% year over year to $5.18 billion. The top line surpassed the Zacks Consensus Estimate of $5.12 billion.

For 2025, total revenues were $20.08 billion, up 7.8% year over year. The top line surpassed the Zacks Consensus Estimate of $20 billion.

Quarterly NII was $1.35 billion, up 12.7% year over year. The rise reflected the continued reinvestment of maturing investment securities at higher yields and balance sheet growth, partially offset by deposit margin compression.

The net interest margin expanded 6 basis points (bps) year over year to 1.38%.

Total fee and other revenues increased 4.9% year over year to $3.83 billion. The rise was driven by an increase in investment services fees.

Total non-interest expenses (GAAP basis) were $3.36 billion, up marginally from the prior-year quarter. The rise was due to an increase in software and equipment costs; costs related to professional, legal and other purchased services; sub-custodian and clearing costs; and business development costs.

BNY’s Asset Balances Increase

As of Dec. 31, 2025, AUM was $2.2 trillion, up 7% year over year. The rise reflected higher market values and the favorable impact of the weaker U.S. dollar, partially offset by cumulative net outflows.

AUC/A of $59.3 trillion increased 13.8% year over year, primarily reflecting client inflows, higher market values and the favorable impact of the weaker U.S. dollar.

BK’s Credit Quality Improves

The allowance for loan losses, as a percentage of total loans, was 0.30%, down 11 bps from the prior-year quarter. As of Dec. 31, 2025, non-performing assets were $143 million, down 20.1% from the year-ago quarter.

In the reported quarter, the company recorded a provision benefit of $26 million, primarily driven by improvements in commercial real estate exposure and changes in the macroeconomic forecast. In the prior-year quarter, provisions were $20 million.

BNY’s Capital Position Improves

As of Dec. 31, 2025, the common equity Tier 1 ratio was 11.9%, up from 11.2% as of Dec. 31, 2024. The Tier 1 leverage ratio was 6%, up from 5.7% as of Dec. 31, 2024.

BK’s Share Repurchase Update

In the reported quarter, BNY repurchased shares worth $1 billion.

Our Take on BNY

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 are 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 carries a Zacks Rank #2 (Buy). 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 Jan. 21. The Zacks Consensus Estimate for Truist’s fourth-quarter earnings has been unchanged over the past seven days.

BankUnited, Inc. BKU is scheduled to report quarterly results on Jan. 21. The Zacks Consensus Estimate for BankUnited’s fourth-quarter earnings has been unchanged over the past seven days.

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

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