The Bank of New York Mellon Corporation or BNY (NYSE:BK) reported third-quarter 2025 diluted EPS of $1.88 and adjusted diluted EPS of $1.91, beating the $1.77 estimate.
Total revenue rose 9% year over year to $5.081 billion, topping the $4.974 billion estimate, driven by a 7% increase in fee revenue and an 18% gain in net interest income. GAAP pre-tax operating margin was 36%, return on equity was 13.7%, and return on tangible common equity was 25.6%.
Average deposits totaled $299.3 billion, up 5% from a year ago, while average loans rose 5% to $72.69 billion. Net interest margin was 1.31%, up 15 basis points year over year, and provision for credit losses was a $7 million benefit.
Capital Strength and Shareholder Return
Book value per share was $55.99, and tangible book value per share was $30.60. CET1 capital totaled $20.6 billion, Tier 1 capital was $25.5 billion, and the CET1 ratio stood at 11.7%.
BNY returned $1.2 billion to common shareholders through $381 million in dividends and $849 million in share repurchases, resulting in a 92% total payout ratio year to date.
Liquidity remained strong with an average Liquidity Coverage Ratio of 112% and a Net Stable Funding Ratio of 130%.
Segment Performance
Securities Services revenue rose 11% to $2.46 billion with a pre-tax operating margin of 33%. Asset Servicing revenue increased 11% to $1.92 billion, Issuer Services revenue climbed 10% to $544 million, and securities lending revenue reached $62 million, up 32%. Assets under custody and administration were $41.7 trillion, up 11% year over year.
Market and Wealth Services revenue increased 14% to $1.77 billion with a 50% pre-tax operating margin. Pershing revenue rose 12% to $729 million, Treasury Services grew 20% to $510 million, and Clearance and Collateral Management revenue increased 12% to $528 million. Segment assets under custody and administration reached $15.8 trillion, up 10%.
Investment and Wealth Management revenue declined 3% to $824 million, but pre-tax operating margin improved to 22%, or 24% on an adjusted basis. Segment assets under management were $2.14 trillion, while Wealth Management client assets rose 5% to $348 billion.
CEO Commentary and Strategic Outlook
The company achieved positive operating leverage of 11 basis points and maintained an effective tax rate of 21.3%.
CEO Robin Vince said, “BNY delivered another quarter of strong results. Record revenue of $5.1 billion was up 9% year-over-year on the back of broad-based growth across the platforms that make up our Securities Services and Market and Wealth Services segments, and we continued to drive significant positive operating leverage.”
Vince added, “We are embracing the power of AI, which, we believe, is for everyone, everywhere and for everything.” The clear signs of progress across the company give us confidence that the strategy is working, he stated.
BNY ended the quarter with $57.8 trillion in assets under custody and administration and $2.1 trillion in assets under management. The company said its Total Loss Absorbing Capacity ratios exceeded minimum requirements. No quantitative guidance was provided.
Price Action: BK shares were trading lower by 0.12% to $108.80 premarket at last check Thursday.
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