- Key insight: Bank of New York Mellon reported a strong third quarter, aided by higher net interest income and the release of provisions for credit losses.
- Forward look: BNY is continuing to push forward with key business strategies, including a new commercial model.
- Supporting data: The custody bank's revenue was more than $5 billion for the quarter.
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Bank of New York Mellon recorded another quarter of higher-than-forecasted revenue and earnings, driven by higher net interest income and a release of provisions for credit losses.
On Tuesday, the $455.3 billion-asset custody bank reported revenue of $5.08 billion for the third quarter, topping the $4.98 billion consensus estimate of analysts who were polled by S&P Capital IQ. For the second quarter in a row, BNY's total revenue came in 9% higher than the year-ago period.
Net income totaled $1.33 billion, up 21% from the same quarter in 2024, while earnings per share for the quarter came in at $1.88, exceeding analysts' average estimate of $1.76.
Net interest income rose 18% year over year to $1.24 billion, mostly as a result of the ongoing reinvestment of maturing securities at higher yields and balance sheet growth, the bank said in a press release. The increase was partially offset by changes in the deposit mix, it added.
The favorable results included the release of $7 million in provisions for credit losses and higher fee income, which climbed 7% year over year to $3.64 billion, according to the release. The uptick in fee income stemmed from a few factors, including net new business and an increase in client activity and market values, the company said.
Expenses increased 4% during the three-month period to $3.24 billion. Average loans and average deposits both increased by 5% compared with the third quarter of last year.
BNY's return on tangible common equity, which is a key profitability metric for banks, came in at 25.6%. That's better than the year-ago period when the metric was 22.8%.
The latest results come as BNY continues to push ahead with a pair of business strategies, including a "platforms operating model" that's intended to streamline and unify departments.
"The new commercial model is enabling greater sales momentum and multi-product solutioning, and as we continue to transition additional parts of the company into our platforms operating model, we see the benefits of this new way of working starting to materialize," CEO Robin Vince said in the press release.
BNY is also "embracing the power of AI," Vince said. Last month, the bank launched a new enterprise AI platform called Eliza, which is named after the wife of the bank's founder, Alexander Hamilton. It
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"It is our people and culture that propel us forward on our mission to unlock BNY's full potential for our clients and shareholders," Vince said in the press release. "The clear signs of progress across the company give us confidence that the strategy is working."
During the quarter, the bank said it will
BNY is one of the oldest banks in the world. Executives will share more information about the third quarter and what's ahead during a call with analysts Thursday morning.
