BNY Q4 Earnings Beat Estimates on Y/Y Growth in NII & Fee Income

The Bank of New York Mellon Corporation’s BK fourth-quarter 2025 adjusted earnings of $2.08 per share surpassed the Zacks Consensus Estimate of $1.97. Also, the bottom line reflected a jump of 20.9% from the prior-year quarter.Results have been primarily aided by a rise in fee revenues and net interest income (NII). Also, the company recorded a provision benefit in the quarter, which was a tailwind. Growth in assets under custody and/or administration (AUC/A) and assets under management (AUM) balances further supported results. However, marginally higher expenses hurt the results to some extent.The reported quarter’s results excluded certain non-recurring items. Considering those, net income applicable to common shareholders (GAAP basis) was $1.43 billion, up 26.3% from the year-ago quarter.Adjusted earnings per share of $7.50 for 2025 surpassed the Zacks Consensus Estimate of $7.39. Also, the bottom line increased 24.4% from 2024. Net income applicable to common shareholders (GAAP basis) was $5.31 billion, up 22.4% from the previous year.BK’s Revenues Improve, Expenses Rise MarginallyTotal quarterly revenues increased 6.8% year over year to $5.18 billion. The top line surpassed the Zacks Consensus Estimate of $5.12 billion.For 2025, total revenues were $20.08 billion, up 7.8% year over year. The top line surpassed the Zacks Consensus Estimate of $20 billion.Quarterly NII was $1.35 billion, up 12.7% year over year. The rise reflected the continued reinvestment of maturing investment securities at higher yields and balance sheet growth, partially offset by deposit margin compression.The net interest margin expanded 6 basis points (bps) year over year to 1.38%.Total fee and other revenues increased 4.9% year over year to $3.83 billion. The rise was driven by an increase in investment services fees.Total non-interest expenses (GAAP basis) were $3.36 billion, up marginally from the prior-year quarter. The rise was due to an increase in software and equipment costs; costs related to professional, legal and other purchased services; sub-custodian and clearing costs; and business development costs.BNY’s Asset Balances IncreaseAs of Dec. 31, 2025, AUM was $2.2 trillion, up 7% year over year. The rise reflected higher market values and the favorable impact of the weaker U.S. dollar, partially offset by cumulative net outflows.AUC/A of $59.3 trillion increased 13.8% year over year, primarily reflecting client inflows, higher market values and the favorable impact of the weaker U.S. dollar.BK’s Credit Quality ImprovesThe allowance for loan losses, as a percentage of total loans, was 0.30%, down 11 bps from the prior-year quarter. As of Dec. 31, 2025, non-performing assets were $143 million, down 20.1% from the year-ago quarter.In the reported quarter, the company recorded a provision benefit of $26 million, primarily driven by improvements in commercial real estate exposure and changes in the macroeconomic forecast. In the prior-year quarter, provisions were $20 million.BNY’s Capital Position ImprovesAs of Dec. 31, 2025, the common equity Tier 1 ratio was 11.9%, up from 11.2% as of Dec. 31, 2024. The Tier 1 leverage ratio was 6%, up from 5.7% as of Dec. 31, 2024.BK’s Share Repurchase UpdateIn the reported quarter, BNY repurchased shares worth $1 billion.Our Take on BNYBK’s global expansion efforts and a strong balance sheet position are likely to keep supporting its top-line growth. Also, a robust AUM balance is another positive. However, concentration risk due to the company’s higher dependence on fee-based revenues and elevated expenses are worrisome.The Bank of New York Mellon Corporation Price, Consensus and EPS Surprise  The Bank of New York Mellon Corporation price-consensus-eps-surprise-chart | The Bank of New York Mellon Corporation QuoteCurrently, BNY carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Earnings Release Dates of Other Major BanksTruist Financial Corporation TFC is slated to report quarterly results on Jan. 21. The Zacks Consensus Estimate for Truist’s fourth-quarter earnings has been unchanged over the past seven days.BankUnited, Inc. BKU is scheduled to report quarterly results on Jan. 21. 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Click to get this free report The Bank of New York Mellon Corporation (BK): Free Stock Analysis Report BankUnited, Inc. (BKU): Free Stock Analysis Report Truist Financial Corporation (TFC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks