BNY (NYSE:BK) reported what executives described as a “strong performance” to start 2026, driven by broad-based revenue growth, solid operating leverage, and elevated client activity amid a volatile market backdrop. On the company’s first-quarter earnings call, CEO Robin Vince and CFO Dermot McDonogh highlighted record revenue, margin expansion, and increasing adoption of artificial intelligence across the firm’s operations.
Record revenue and margin expansion in Q1
Vince said BNY delivered earnings per share of $2.24, up 42% year-over-year, “both on a reported basis and excluding notable items.” He added that the company generated “record revenue of $5.4 billion,” an increase of 13% from the prior year, reflecting “broad-based growth across our Securities Services and Market and Wealth Services businesses.”
McDonogh reiterated those results, noting that fee revenue rose 11% year-over-year and net interest income increased 18%. He said expenses were $3.4 billion, up 5% year-over-year, reflecting higher business investments, revenue-related expenses, the weaker U.S. dollar, and employee merit increases, partially offset by “continued efficiency savings.” Provision for credit losses was a $7 million benefit, which McDonogh attributed “primarily [to] improvements in commercial real estate exposure,” partially offset by macroeconomic changes.
Business drivers: activity, FX volumes, and higher-yield reinvestment
McDonogh pointed to multiple contributors to growth in the quarter:
- Investment services fees: Up 10%, driven by “higher client activity, net new business, and higher market values.”
- Investment management and performance fees: Up 6% on “higher market values and a favorable impact of a weaker U.S. dollar,” partially offset by the mix of AUM flows.
- Foreign exchange revenue: Up 49% year-over-year due to “higher volumes resulting from elevated market activity,” supported by “new products and capabilities.”
- Net interest income: $1.4 billion, up 18% year-over-year, driven by reinvestment of securities at higher yields and balance sheet growth, partially offset by “deposit margin compression.”
On business metrics, McDonogh said firmwide assets under custody and/or administration (AUCA) were $59.4 trillion, up 12% year-over-year, reflecting inflows, higher market values, and currency effects. Assets under management (AUM) were $2.1 trillion, up 6%, with market values and the weaker dollar offsetting “cumulative net outflows.”
Segment performance: Securities Services and Market/Wealth lead
In Securities Services, McDonogh reported revenue of $2.7 billion, up 17% year-over-year. Investment services fees rose 10%, with asset servicing fees up 11% due to market values and “broad-based client activity.” He said ETF assets under administration increased 33% and alternatives AUA rose 20%.
Issuer services fees increased 4%, and McDonogh said that “for the first time in our history, corporate trust reached $15 trillion of total debt serviced,” adding that the company was “particularly pleased” with market share gains in CLO servicing. Securities Services FX revenue rose 44%, and net interest income increased 20% year-over-year. Segment pre-tax income was $1.0 billion, up 46%, with a pre-tax margin of 39%. McDonogh noted that investment-related gains added three percentage points to the segment margin; he later clarified in Q&A that without those gains, the margin would have been 36%.
Market and Wealth Services generated $1.9 billion of revenue, up 11% year-over-year. McDonogh said the company formed a Wealth Solutions business by realigning Archer’s managed account solutions from asset servicing to Pershing, describing it as a move intended to strengthen wealth advisor capabilities with “fully integrated end-to-end solutions across the entire wealth ecosystem.”
Within the segment:
- Wealth Solutions: Investment services fees up 6%; net new assets of $22 billion (3% annualized), with AUCA of $3.3 trillion up 14%.
- Clearance and collateral management: Investment services fees up 19%; average collateral balances of $7.8 trillion, up 18% year-over-year.
- Payments and trade: Investment services fees up 5%, “primarily reflecting net new business.”
Market and Wealth Services pre-tax income was $961 million, up 18%, with a pre-tax margin of 51%.
Investment and Wealth Management revenue rose 6% to $825 million. Pre-tax income increased 43% to $90 million, with margin improving to 11% from 8% a year earlier. McDonogh said long-term active flows were flat, with inflows into fixed income and LDI strategies offset by equity outflows; the quarter also included $10 billion of net outflows from cash and $7 billion from index strategies. Wealth Management client assets were $339 billion, up 4% year-over-year on higher market values.
Deposits, capital return, and updated outlook
In Q&A, McDonogh addressed questions about deposit strength, saying clients held higher liquidity amid macro uncertainty and that BNY attracted “more non-interest-bearing [deposits] than anticipated.” He said the U.S. dollar deposit balance and mix “drove the NII outperformance,” particularly in issuer services and asset servicing, including corporate trust. On non-dollar deposit betas, he said euro and sterling are “a smaller part” of the book—“roughly 25% of the overall book”—and that betas “roughly peaked at 80% on the way up,” with the firm expecting a “symmetrical” pattern as rates move.
McDonogh said BNY returned $1.4 billion of capital to shareholders during the quarter, representing an 87% payout ratio, and that the board authorized a new $10 billion share repurchase program. The Tier 1 leverage ratio was 6%, flat sequentially, while the CET1 ratio ended the quarter at 11%, down 89 basis points sequentially. McDonogh attributed the CET1 decline primarily to higher risk-weighted assets tied to a “single day increase in overnight loan balances on the last day of the quarter,” plus higher client activity in agency securities lending and FX; he later said those spot balances “returned to normal levels on April 1.”
For full-year 2026, McDonogh said the company is raising its outlook for total revenue growth (excluding notable items) to approximately 6% year-over-year. The updated outlook includes expected net interest income growth of approximately 10% year-over-year. BNY expects expense growth (excluding notable items) to be at the top end of its prior 3% to 4% range, and it continues to expect a quarterly tax rate of about 23% for the remaining quarters of 2026.
AI strategy and client examples highlighted by management
Vince used the call to spotlight BNY’s AI strategy, describing multi-year investments and a “platform approach to embedding AI across the company,” including the creation of an AI Hub in 2023 and the launch of Eliza, BNY’s AI platform. Vince said Eliza is available to 100% of employees and that the firm has developed “more than 200 AI solutions” and introduced “digital employees” that operate alongside staff. In Q&A, Vince said BNY has “218 AI solutions in production right now,” “up 4 times year-over-year,” along with additional pilots.
While executives did not quantify long-term AI-related financial targets, Vince said he expects AI benefits to show up through productivity (including revenue per employee), enhanced client-facing platform capabilities, and making previously marginal activities more viable as “capacity” increases. He also discussed cyber risk, saying BNY is using AI tools, including internal capabilities he referred to as “Mythos,” as part of its defensive posture, and emphasized the need for continuous vigilance as AI capabilities accelerate.
Management also cited examples of multi-product client activity and strategic wins. Vince said Allianz Global Investors selected BNY to support an integrated operating model optimization, and that PayPal selected BNY to provide “institutional-grade digital asset custody.” Vince also referenced the U.S. Department of the Treasury selecting BNY as financial agent for “Trump Accounts,” which he described as an investment savings initiative for children, with Robinhood providing brokerage and initial trustee services.
About BNY (NYSE:BK)
BNY, formerly known as BNY Mellon, is a global financial services company headquartered in New York City. Formed in 2007 through the merger of the Bank of New York and Mellon Financial Corporation, BNY traces its roots back to 1784, making it one of the oldest banking institutions in the United States. It was also the first company listed on the New York Stock Exchange.
BNY operates at the center of the world’s capital markets, partnering with clients to help them operate more efficiently and accelerate growth.
