BNY posts record revenue, gets boost from market volatility

• Key insight: BNY has seen revenue surge in the volatile economic environment, and has also managed to keep expenses in check.
• Supporting data: The company's $1.6 billion bottom line marked a 33% increase from the same period last year.
• Forward look: The bank will become the financial agent for the so-called Trump accounts, which will provide $1,000 for each child born between 2025 and 2028.

The Bank of New York Mellon reeled in record revenue during the first quarter, as market volatility fueled business and a four-year-old transformation strategy enhanced efficiency.

America's oldest bank said Thursday that it benefited from higher client activity and new business across each of its segments, driving an outperformance in the first three months of the year. CEO Robin Vince added that clients are coming to BNY across its breadth of offerings, including securities services, market and wealth services and the investment and wealth management business.

As artificial intelligence rapidly advances and the war in Iran throws uncertainty into the economic environment, the $562 billion-asset company has leaned in, Vince said on a Thursday morning call with reporters.

"It's been an incredibly interesting, busy and different first three months of 2026 in lots of respects," Vince said. "We've got a continuing geopolitical conflict, and as a result of that, evolving policy outlooks, uncertainty on rates and inflation, all of which have driven ups and downs in the markets over the course of the quarter."

BNY's bottom line jumped, as the bank's embrace of technology, especially AI, drove sales and performance. At the same time, the company has managed to keep a lid on expenses and maintain credit quality.

BNY recorded net income of $1.6 billion, up 33% from the same period last year. Revenue of $5.4 billion, up 13% from the first quarter of last year, was driven in part by higher market values and foreign exchange revenue, and the favorable impact of a weaker U.S. dollar. The company's net interest income also rose 18% from the previous year, to $1.4 billion, reflecting BNY's management of its investment portfolio.

Noninterest expenses grew 5% from the prior year, to $3.4 billion. Provisions for credit losses decreased by $7 million.

Chief Financial Officer Dermot McDonogh said Thursday that 50% of clients who awarded BNY new business in asset servicing also brought the company new business in at least one other platform.

Earnings per share of $2.24 was up from $1.58 the prior year, and handily beat the consensus analyst estimate of $1.93.

"Clearly [BNY] is firing on all cylinders thanks to both the environment and the ongoing benefits of investments in both efficiency and a business model more conducive to reliable growth," wrote Truist Securities analyst David Smith in a Thursday note.

The bank, founded by Alexander Hamilton in 1784, is in year four of a 10-year transformation, spearheaded by Vince, who took the reins as CEO in 2022.

Earlier this month, the U.S. Treasury tapped BNY — in partnership with Robinhood — as the financial agent for its so-called Trump accounts program. The initiative was established last year by Congress to offer $1,000 for each child born between 2025 and 2028. The money will grow tax-free until withdrawn.

Vince said Thursday that he thinks the program is "terrific public policy."

"As a firm, we've been here since the very beginning of the nation," Vince said. "Our founder became the first Treasury secretary. And so we thought, 'What more fitting way to honor the U.S. and our own history than participate as an actual provider?'"

The bank will match the $1,000 government benefit for any of its U.S. employees who open accounts, Vince said.

About 5 million children have been signed up, and more than 1 million more are eligible, Treasury Secretary Scott Bessent said Wednesday. The Brookings Institution estimates that the overall tax legislation of which Trump accounts were a part will cost between $3.7 trillion and $5.1 trillion over the next ten years. 

Vince said the bank's recent business — such as the Trump accounts contract and PayPal selecting the bank to provide institutional digital asset custody — "illustrate that global reach that we have, the breadth across our different products, transitioning from the traditional to the new, all delivered with technology."

BNY has also kept its foot on the gas for AI development, Vince said, which has been a priority since 2023. Those investments have led to increased software releases, better onboarding processes for corporate clients and speedier customer service on the settlement side, he added.

Vince said that BNY thinks AI will be the most important, "fundamental, powerful technology" created in recent history, "and probably for generations."

"We put it at the heart of our strategy," he said. "We think it's going to be, and it's already turning out to be, a significant enabler of our evolution."