Bank of New York Mellon Corp. (NYSE:BK) on Tuesday reported better-than-expected second-quarter 2025 results, topping both revenue and earnings estimates.
The firm reported second-quarter adjusted earnings of $1.94 per share, up 28% from a year ago and above the Street estimate of $1.76.
Revenue rose 9% year over year (YoY) to $5.03 billion, topping analysts’ forecast of $4.83 billion.
Fee revenue in the quarter grew 7% YoY to $3.641 billion. Net interest income rose 17% YoY, driven by higher-yield reinvestments and balance sheet growth, partly offset by deposit mix shifts.
Noninterest expense rose 4%, driven by higher investments, wage increases, FDIC adjustments, and a weaker dollar, partly offset by efficiency gains.
Provision for credit losses was a $17 million benefit, mainly due to reserve releases tied to commercial real estate exposure.
Assets under custody and/or administration rose 13%, driven by client inflows, higher market values, and a weaker U.S. dollar. Assets under management increased 3% as market gains and favorable currency impact offset cumulative net outflows.
The average deposit totaled $300 billion, up 5% year over year and 6% from the prior quarter. The Tier 1 leverage ratio rose 23 basis points yearly to 6.1%.
BNY returned $1.2 billion to common shareholders year-to-date, including $346 million in dividends and $895 million in share repurchases, resulting in a total payout ratio of 92%.
CET1 capital rose to $20.1 billion and Tier 1 capital to $25.5 billion as of June 30, 2025, driven by earnings and gains in other comprehensive income, partly offset by buybacks and dividends.
The CET1 ratio held steady at 11.5%, as increased risk-weighted assets offset higher capital, while the Tier 1 leverage ratio dipped to 6.1% due to higher average assets.
Liquidity and funding remained strong, with an average liquidity coverage ratio (LCR) of 112% and NSFR of 131%. TLAC ratios stayed above regulatory minimums.
BNY declared a quarterly dividend of 53 cents per share, up from 47 cents. The dividend is payable on Aug. 7, 2025, to shareholders of record as of July 25, 2025.
“BNY’s ongoing transformation has significant momentum. Only one year after the launch of our new commercial model last summer, we delivered two consecutive quarters of record sales in the first half of the year. It is also notable that the parts of the company that were the first to transition to our platform’s operating model in the spring of last year have displayed faster delivery times, enhanced service quality, increased innovation along with greater efficiency,” commented Robin Vince, CEO.
Vince mentioned that the firm reported significant positive operating leverage, driving a pre-tax margin of 37% and a return on tangible common equity (ROTCE) of 28%.
Outlook
BNY updated its 2025 financial outlook, reflecting stronger first-half results and revised market-implied interest rates as of June 30.
Net Interest Income is expected to grow in the high single digits year over year, with expenses up around 3%, resulting in positive operating leverage.
Price Action: BK shares were trading higher by 0.01% to $95.26 at last check Tuesday.
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