Bank of New York Mellon Q1 2026 Financial Highlights and Outlook

Key financial highlights — Bank of New York Mellon (BK) Q1 2026

Consolidated results (the “headline” quarter)

• Earnings per share (EPS): $2.24, up 42% year over year (reported and excluding notable items). ¹
• Total revenue: $5.4 billion, up 13% year over year, described as reflecting broad-based growth across Securities Services and Markets & Wealth Services. ¹
• Operating leverage: over 800 basis points positive, alongside meaningful investments (including AI) and people/culture. ¹
• Pre-tax margin: 37%, and return on tangible common equity: 29%. ¹
• Net interest income (NII): $1.4 billion, up 18% year over year and up 2% quarter over quarter. ²

Revenue composition and drivers

• Fee revenue up 11% year over year in the quarter. ³
• Investment services fees up 10% (cited drivers: higher client activity, net new business, and higher market values). ³
• Investment management & performance fees up 6%, driven by higher market values and favorable weaker USD impacts, partially offset by AUM flow mix. ³
• Foreign exchange revenue up 49% year over year due to higher volumes from elevated market activity and supported by new products/capabilities. ³
• Firmwide AUCA: $59.4 trillion, up 12% year over year, reflecting net client inflows, higher market values, and a weaker dollar benefit. ³

Balance sheet / liquidity / capital

• Average assets up 2% supported by deposit growth. ²
• Tier 1 leverage ratio: 6%, flat sequentially. ²
• Tier 1 capital increased by $532 million, mainly from preferred stock issuance and earnings retention, partially offset by lower accumulated other comprehensive income. ²
• CET1 ratio: 11% at quarter-end, down 89 bps sequentially, with management citing higher risk-weighted assets (including a single-day increase in overnight loan balances at quarter end and higher activity in agency securities lending and FX). ²
• Capital returned to shareholders: $1.4 billion, equating to an 87% payout ratio, and the Board authorized a new $10 billion share repurchase program. ²
• Liquidity coverage ratio: 111% and net stable funding ratio: 131%. ²

Segment highlights

1) Securities Services

• Total revenue: $2.7 billion, up 17% year over year. ⁴
• Total investment services fees up 10%; in Asset Servicing specifically, investment services fees grew 11% (management attributed to higher market values and broad-based client activity). ⁴
• Pre-tax income: $1.0 billion, up 46% year over year, with pre-tax margin: 39%. ⁵
• Net interest income for the segment: up 20% year over year. ⁴
• Management also noted investment-related gains added three percentage points to pre-tax margin in the quarter. ⁵
• A segment context point: Corporate Trust reached $15 trillion of total debt serviced (noted as the first time in management’s history). ⁴
• Foreign exchange revenue in Securities Services up 44% year over year. ⁴

2) Markets and Wealth Services (combined segment)

• Total revenue: $1.9 billion, up 11% year over year. ⁵
• Total investment services fees up 10%. ⁵
• Management described net new assets of $22 billion in the quarter and annualized growth rate of 3%; AUCA: $3.3 trillion, up 14% year over year for Wealth Solutions. ⁵
• For Clearance and Collateral Management: investment services fees up 19%, with average collateral balances of $7.8 trillion up 18% year over year. ⁵
• Pre-tax income: $961 million, up 18% year over year, with pre-tax margin: 51%. ⁶
• Segment expenses: $937 million, up 6% year over year, cited drivers include higher investments, merit increases, revenue-related expenses, and unfavorable weaker dollar impacts (partly offset by efficiency savings). ⁶

3) Investment and Wealth Management

• Total revenue: $825 million, up 6% year over year. ⁶
• Pre-tax income: $90 million, up 43% year over year, with pre-tax margin: 11% versus 8% in the prior-year quarter. ⁶
• Segment expenses: $726 million, up 2% year over year, attributed to weaker dollar, merit increases, and higher investments (partly offset by efficiency savings). ⁶

Capital/interest-rate and operating environment context (why performance happened)

• Management emphasized that volatility can be an enabler because it generates volumes, and they reported the revenue mix was roughly 50/50 between balances and volumes (and the equity vs fixed income balance also “pretty balanced”). ⁷
• Consolidated results attributed NII growth mainly to reinvestment of investment securities at higher yields and balance sheet growth, partially offset by deposit margin compression. ²
• Expenses: $3.4 billion up 5% year over year, driven by investments, revenue-related expenses, weaker dollar, and employee merit increases, partially offset by efficiency savings. ³
• Provision for credit losses was a benefit of $7 million (with management citing improvements in commercial real estate exposure, partially offset by other macroeconomic factors). ³

Outlook / guidance signal (what changed after Q1)

• Management raised full-year 2026 total revenue outlook (excluding notable items) to ~6% year-over-year growth. ⁸
• For full-year 2026, management expects net interest income up ~10% year over year. ⁸
• Expense growth guidance (excluding notable items) is expected to be at the top of the 3%–4% range previously provided in January. ⁸
• Continued expectation for a ~23% quarterly tax rate for the remaining quarters of 2026. ⁸

Practical “so what” summary

Q1 2026 showed strong profitability expansion (EPS +42%, pre-tax margin 37%, ROTCE 29%) alongside broad revenue growth (revenue +13%, fee revenue +11%, and NII +18%) with segment-level strength across Securities Services (notably pre-tax margin 39%) and Markets & Wealth Services (pre-tax margin 51%). ¹²³⁵⁶