Bank of New York Mellon Q1 2026 Financial Highlights and Performance Overview

Bank of New York Mellon (BK) — Key Financial Highlights for Q1 2026

1) Profitability and earnings

• Earnings per share (EPS): $2.24, up 42% year over year (reported and excluding notable items). ¹
• Operating leverage: the company reported over 800 basis points of positive operating leverage in Q1 2026. ¹
• Pre-tax margin: expanded to 37%. ¹
• Return on tangible common equity: 29%. ¹

2) Revenue growth and earnings drivers

• Total revenue: $5.4 billion, up 13% year over year. ¹
• Fee revenue: up 11% year over year. ²
  • Investment services fees: up 10% (drivers cited include higher client activity, net new business, and higher market values). ²
  • Investment management and performance fees: up 6% (primarily higher market values and a favorable impact of a weaker US dollar; partially offset by AUM flow mix). ²
• Foreign exchange (FX) revenue: up 49% year over year on higher volumes tied to elevated market activity and supported by new products/capabilities. ²
• Investment and other revenue: $271 million, including ~$135 million of investment-related gains and $50 million of net securities losses. ²

3) Net interest income (NII) and balance-sheet context

• Net interest income (NII): $1.4 billion, up 18% year over year and up 2% quarter over quarter. ³
• Sequential NII increase (Q/Q): attributed to reinvestment of investment securities at higher yields and balance sheet growth, partially offset by deposit margin compression. ³
• Deposit and balance-sheet trends:
  • Average deposit balances increased 3% sequentially, with 2% growth in interest-bearing deposits and 6% growth in non-interest-bearing deposits. ⁴
  • Cash and reverse repo balances were flat. ⁴
  • Loans increased 6% and investment securities portfolio balances increased 2% quarter over quarter. ⁴

4) Segment highlights (revenue, margins, and key accomplishments)

Securities Services

• Total revenue: $2.7 billion, up 17% year over year. ⁴
• Net/mix details and sub-drivers:
  • Total investment services fees: up 10% overall, with Asset Servicing investment services fees growing 11% (higher market values and broad-based client activity). ⁴
  • ETF AUCA: up 33% year over year driven by higher market values, client inflows, and net new business. ⁴
  • Foreign exchange revenue: up 44% year over year (cited as higher client volumes in Securities Services). ⁴
  • Net interest income for the segment: up 20% year over year. ⁴
• Pre-tax income and margin: pre-tax income $1.0 billion (+46% YoY) and pre-tax margin 39%. ⁵
• Margin note: management indicated investment-related gains added three percentage points to pre-tax margin in the quarter. ⁵
• Corporate Trust scale milestone: management stated that Corporate Trust reached $15 trillion of total debt serviced for the first time in the company’s history. ⁴

Markets and Wealth Services

• Total revenue: $1.9 billion, up 11% year over year. ⁵
• Investment services fees: up 10%. ⁵
• Pre-tax income and margin: pre-tax income $961 million (+18% YoY) and pre-tax margin 51%. ⁶
• Segment expense growth: segment expenses of $937 million, up 6% YoY, driven by investments, employee merit increases, higher revenue-related expenses, and weaker dollar impacts (partially offset by efficiency savings). ⁶

Investment and Wealth Management

• Total revenue: $825 million, up 6% year over year. ⁶
• Pre-tax income and margin: pre-tax income $90 million, up 43% YoY; pre-tax margin 11% vs 8% in the prior-year quarter. ⁶
• Segment expense growth: expenses $726 million, up 2% YoY, driven by weaker dollar, employee merit increases, and higher investments (partially offset by efficiency savings). ⁶

5) Assets under management and wealth metrics

• Firmwide AUCA: $59.4 trillion, up 12% year over year (net client inflows, higher market values, and weaker dollar impact). ²
• Assets under management (AUM): $2.1 trillion, up 6% year over year. ⁷
  • Management cited Q1 flows as long-term active flows flat, with net inflows into fixed income and LDI and net outflows from equity strategies; specifically $10 billion net outflows from cash and $7 billion net outflows from index strategies. ⁷
• Wealth Management client assets: $339 billion, up 4% year over year (higher market values). ⁷

6) Capital, liquidity, and shareholder returns

• Tier 1 leverage ratio: 6%, flat sequentially. ³
• Tier 1 capital: increased by $532 million, primarily due to preferred stock issuance and earnings retention, partially offset by a net decrease in accumulated other comprehensive income. ³
• CET1 ratio: 11%, down 89 bps sequentially. ³
  • Management attributed the decline to higher risk-weighted assets, including a single-day increase in overnight loan balances at quarter-end and higher client activity in agency securities lending and foreign exchange. ³
• Capital returned to shareholders: $1.4 billion during the quarter, representing a total payout ratio of 87%. ³
• Share repurchase authorization: Board authorized a new $10 billion share repurchase program. ³
• Liquidity: consolidated liquidity coverage ratio 111% and net stable funding ratio 131%. ³

7) Operating environment and revenue mix

• Management emphasized that volatility can be an enabler because it generates volumes, and in Q1 the firm cited a mix roughly 50/50 between balances and volumes. ⁸
• Strategic/capital-light framing: management noted the business has a diversified revenue stream and durability supported by balance-sheet strength and balance of fee drivers. ⁸

8) Forward-looking financial outlook raised (full-year 2026)

• Due to strong Q1 performance, the company raised full-year 2026 outlook for total revenue (excluding notable items) to ~6% YoY growth. ⁷
• Company expects full-year 2026 net interest income up ~10% YoY. ⁷
• Full-year 2026 expense growth (excluding notable items) expected at the top of the 3%–4% YoY range provided earlier. ⁷
• Tax rate expectation: ~23% quarterly tax rate for remaining quarters. ⁷

Bottom line

Q1 2026 showed strong earnings growth (EPS +42% YoY) supported by record revenue ($5.4B, +13% YoY) and meaningful operating leverage, with pre-tax margin rising to 37% and ROTCe at 29%. ¹ Segment results reinforced strength across Securities Services (revenue $2.7B, +17% YoY; pre-tax margin 39%), Markets and Wealth Services (pre-tax margin 51%), and Investment and Wealth Management (pre-tax income up 43%). ⁴⁶⁵ Capital management was shareholder-friendly and disciplined, with $1.4B returned and strong liquidity metrics, while CET1 modestly declined sequentially due to specific quarter-end balance-sheet and activity drivers. ³