Bank of New York Mellon (BNY) is entering a new phase of growth, with management arguing that years of operational and strategic changes are now translating into stronger, more scalable performance. “Operating as One BNY, we are starting to bring the full breadth of the company together to deliver more products and services to meet our clients' needs. This includes embedding sales practices and behaviours that enable our teams to deliver more and better for clients with greater consistency to deepen relationships with existing clients and open doors to new ones,” said chief executive officer Robin Vince, pointing to tighter client relationships and broader product adoption as key drivers of the bank’s record 2025 results. That shift was reflected in the numbers. BNY reported net income of $5.3 billion for 2025 on record revenue of $20.1 billion, representing an 8% increase compared with 2024. Earnings per share (EPS) rose 28% to $7.40, while return on tangible common equity (ROTCE) reached 26% for the full year and 27% in the fourth quarter. On the back of this strong performance, the bank raised its medium-term targets, aiming for a pretax margin of 38% and ROTCE of 28%, each up 500 basis points from previous goals. At the fourth-quarter earnings call, leadership reported broad-based growth in fee and interest income while maintaining tight control over costs and capital. As part of its strategic initiatives, the bank is also expanding its range of services for existing clients and investing in platform capabilities to strengthen relationships and broaden its digital and end-to-end offerings. Robin Vince, Chief Executive Officer, BNY Revenue growth fuelled by client activity and more resilient income streams Vince attributed the bank’s revenue growth to a combination of stronger client activity and a deliberate shift toward more resilient income streams. “In combination with stronger organic growth, we took steady, deliberate actions to reduce sensitivity to interest rates, driving more resilient top-line revenue growth in a range of macroeconomic environments. At the same time, our ongoing transition and increasing maturity in the platform’s operating model are reducing friction and driving productivity improvements,” he said. BNY’s revenue expansion was driven by both fee income and net interest income (NII), reflecting broad-based performance across its business lines. Fee revenue grew 6% year-over-year, with investment services fees rising 8%, supported by net new business, higher market values and increased client activity. Investment management and performance fees were down 2%, reflecting the mix of assets under management (AUM) flows and certain adjustments. NII rose 15% for the year, supported by the reinvestment of maturing securities at higher yields and balance sheet growth, partially offset by pressure on deposit margins. Chief financial officer Dermot McDonogh emphasised that a growing share of revenue growth is tied to recurring client activity rather than one-off events. Over the past two years, the number of clients purchasing three or more services increased by more than 60%, reflecting the bank’s focus on deepening relationships. Revenue from new clients accounted for 10% of total 2025 sales, highlighting continued success in client acquisition alongside expansion within the existing base. McDonogh noted, “Net new assets were $51 billion in the fourth quarter, representing healthy growth from both new and existing clients. Over the course of 2025, we earned numerous wins from new $1 billion-plus wealth firms, and the business accomplished several multiyear contract renewals with key clients.” Dermot McDonogh, Chief Financial Officer, BNY Platform strategy and AI adoption drive efficiency and scalability A central element of BNY’s strategy is the shift toward a platform-based operating model, which Vince claims is improving efficiency and enabling growth at scale. The bank's proprietary enterprise artificial intelligence (AI) platform, Eliza, sits at the centre of BNY's effort to scale its operations and handle increasing complexity across its platform businesses. Rather than replacing human capacity, Vince frames it as augmenting what employees can do — allowing the same teams to take on higher volumes and more complex client work without a proportional increase in resources. Eliza acts as an orchestrator for over 134 "digital employees" — multi-agentic AI solutions that work alongside human staff to support workflows such as payment validation, trade settlement and data analysis. The platform reached 99% employee adoption in 2025, and BNY filed more than 60 AI-related patent applications during the year. Partnerships with Google Cloud and OpenAI have further enhanced its capabilities for research, analytics and operational efficiency. Vince was direct about the platform’s purpose. “Eliza is unlocking capacity for our people, allowing them to focus on higher-value work for our clients,” he said. McDonogh was similarly explicit in pushing back on a narrower efficiency framing when analysts pressed for headcount savings attributable to AI on the earnings call. “AI is unlocking capacity. We don’t think about it in the narrow definition of efficiency. It’s all about growing clients, increasing revenue, and optimising the potential for our employees.” Vince said this shift is key to improving scalability and supporting margin expansion over time. Around two-thirds of pretax income now comes from platform-style businesses, up from 55% three years ago. Markets and Wealth Services achieved a pretax margin of 49%, while Security Services exceeded its long-term pretax margin target, reaching 33% for the year. Security Services pretax income increased 30% year-over-year, driven by higher activity in asset servicing, custody and alternative asset management. By automating routine tasks and reducing reliance on manual processing, Eliza helps lower overall cost per transaction. “Investments in digitisation and automation have meaningfully lowered the unit cost for processes like striking a NAV (net asset value) and settling a trade, and our people are building innovative AI solutions that we expect over time will have a meaningful impact across the company,” said Vince. While BNY does not attribute a single isolated number for the cost-to-income (CIR) improvement solely to the platform, Eliza is a primary driver of the bank’s broader efficiency gains and positive operating leverage. The practical impact of individual tools is beginning to be documented. A December 2025 case study published by OpenAI, based on BNY's own disclosures, noted that the bank's Contract Review Assistant reduces legal review time by 75% — from four hours to one — across more than 3,000 vendor agreements annually. BNY also reported generating $550 million in efficiency savings in 2025. McDonogh described the underlying dynamic plainly on the call: "We've been harvesting roughly $500 million a year for each of the last three years, and we've reinvested that in the business to grow" — a cycle he presented as the engine behind sustained positive operating leverage rather than a one-time efficiency gain. Vince was candid about the difficulty of quantifying AI's financial impact with greater precision. "It's very hard to project very clearly exactly where we'll be one, two, three, four, five years from now," he said, adding that "adoption and integration risk becoming the limiting factors" as the technology matures. BNY's response, he explained, has been to treat AI as a cultural imperative — “AI for everyone, everywhere and for everything.” Operational discipline supports margin expansion Management continued to emphasise operating discipline as a core driver of performance. McDonogh said the platform model and ongoing efficiency initiatives helped offset higher investment spending, enabling the bank to fund growth while maintaining cost control. “Our continued focus on expense discipline and strategic investments allowed us to deliver positive operating leverage while sustaining growth across all our businesses,” he said. BNY recorded eight consecutive quarters of positive operating leverage in 2025, with revenue growth outpacing expense increases. Expenses rose 3% year-over-year, below the 8% growth in total revenue, supporting pretax margin expansion to 35% for the full year. Strategic client wins and multi-product adoption BNY’s 2025 growth was supported by targeted commercial initiatives and innovation in client solutions. Ten percent of revenue came from new clients, reflecting successful outreach and product development. Notable wins included WisdomTree, which selected BNY for banking-as-a-service on the WisdomTree Prime platform, and Jupiter Asset Management, which adopted BNY’s front-to-back investment operations and data services. Japan’s Government Pension Investment Fund engaged BNY for integrated data and analytics to manage private market assets. Vince emphasised the deepening of existing client relationships. Over two years, the number of clients buying three or more services increased significantly, underscoring the bank’s cross-platform integration capabilities. Capital discipline and shareholder returns remain priorities Alongside growth initiatives, management reiterated its focus on disciplined capital deployment. The bank returned $5 billion to shareholders through dividends and share repurchases, including a 100% payout ratio in the fourth quarter. Capital ratios remained strong, with a while Common Equity Tier 1 (CET1) ratio of 11.9% and a Tier 1 leverage ratio of 6%. Executives stressed that capital deployment remains conservative, preserving balance sheet stability while funding strategic initiatives. McDonogh said, “What remains unchanged is our commitment to prudent balance sheet management and with it, our philosophy for capital deployment and distributions.” Segment performance reflects strengths and ongoing challenges Performance across business segments was broadly strong, particularly in platform-driven areas. Markets and Wealth Services reported a pretax margin of 49%, while Security Services exceeded its long-term margin target, reaching 33% for the year. Security Services pretax income increased 30% year-over-year, supported by higher client activity and growth in asset servicing, custody, and alternative asset management. Vince highlighted that, “Asset Servicing continues to show strong momentum as clients increasingly access the breadth of capabilities across our platforms to help them evolve their operating models.” However, Investment and Wealth Management remained a weaker area, with revenue declining 2% and pretax income falling 14% year-over-year. McDonogh said the decline reflected net outflows in long-term strategies and pressure on performance fees. This also showed that not all parts of the business are benefiting equally from the broader transformation. McDonogh noted, “Over the past year, we've worked hard to bring our investment in wealth management business closer to our other BNY platforms, streamlined operations and build towards stronger top line growth, including by making several key strategic hires. We expect that 2026 will be the year in which this work will start to translate into improved financial performance.” Scaling platforms, sustaining growth and managing risk BNY has raised its medium-term targets, with McDonogh describing them as "a floor to our ambition" rather than a ceiling. For 2026, McDonogh guided for total revenue growth of approximately 5%, explicitly flagging the outlook as market-dependent and acknowledging uncertainty around the precise composition. "We're not quite exactly sure how the composition is going to come," he said on the call, "but we feel pretty good about the guide." Expense growth of 3% to 4% is also planned for 2026. McDonogh framed the operating leverage commitment in explicitly cautious terms. "Notwithstanding a very dynamic operating environment, positive operating leverage continues to be our North Star," he said, "and so we have set ourselves up for another year of more than 100 basis points of positive operating leverage in 2026." McDonogh was specific about the composition of that growth, noting that deposit balances are expected to remain roughly flat across 2026 — with Q4 typically the strongest quarter seasonally and subsequent quarters likely to moderate. The NII growth above 5%, he noted, is therefore driven primarily by the reinvestment of maturing securities at higher yields, with a pickup of roughly 100 to 150 basis points over runoff yields, rather than by balance sheet expansion. Looking ahead, Vince said BNY's next phase is about realising scale and growth opportunities across the company. “As we mature in our new commercial and platform models, unlock capacity using AI and in so doing, serve our clients in new and better ways, enabling the global financial markets and infrastructure of the future.”
