BNY's Q2 2026 revenue rose 13% to $5.70B as fees grew 11% and net interest income 20% while costs rose 7%, lifting diluted EPS 27% to $2.45 and pre-tax margin to 39.8%.
Revenue
$5.7B
+13.3% YoY
Net income
$1.7B
+21.9% YoY
Diluted EPS
$2.45
+26.9% YoY
Overview
BNY (The Bank of New York Mellon) doesn't make most of its money from lending. It is a custody and trust bank: it holds, services, settles and moves assets for pension funds, asset managers, brokers and governments, and charges fees for that work. It also earns net interest income (NII), the gap between what it earns on the cash clients leave with it (invested in securities, loans and central-bank deposits) and what it pays those clients on their deposits.
In the second quarter of 2026 (quarter ended June 30), both parts of the business grew together. Total revenue rose 13% to $5.70 billion, while noninterest expense (the cost of running the bank) rose only 7%. Because revenue outgrew costs, net income applicable to common shareholders rose 22% to $1.70 billion and diluted earnings per share (EPS) rose 27% to $2.45. EPS grew faster than profit because BNY bought back shares: it had 3.8% fewer shares outstanding than a year earlier (678.5 million vs. 705.2 million).
Key metrics
Metric
Q2 2026
Q2 2025
YoY Change
Total revenue
$5,698M
$5,028M
+13.3%
Fee revenue
$4,036M
$3,641M
+10.8%
Net interest income
$1,446M
$1,203M
+20.2%
Noninterest expense
$3,439M
$3,206M
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Pre-tax operating margin is income before taxes as a share of total revenue. Return on tangible common equity (ROTCE) measures annualized profit against shareholders' equity after removing goodwill and other intangible assets from past acquisitions. It shows how much profit the bank earns on the capital that actually does the work, and it is a non-GAAP (company-adjusted) measure.
"Notable items" (one-offs the company itself separates out) were small this quarter: $6 million of severance and $2 million of litigation reserves. Excluding them, adjusted EPS was $2.46, against $1.94 a year earlier, so one-offs are not distorting the reported growth.
First half of 2026: revenue of $11,107M (+13.1% from $9,820M), net income applicable to common shareholders of $3,258M (+28.3% from $2,540M), diluted EPS of $4.68 (+33.3% from $3.51) and a pre-tax operating margin of 38.6% (vs. 34.2%).
Takeaway: Revenue grew about six percentage points faster than costs (13% vs. 7%), with both fees and interest income contributing, while full-time headcount was 7% lower than a year ago (46,500 vs. 49,900). That gap moved the pre-tax margin from 36.6% to 39.8% and pushed ROTCE above 30%. Part of the fee growth came from higher market values rather than new business, so some of this depends on markets holding up.
Where the revenue came from
Fee revenue (+11%). About 71% of revenue came from fees. The largest line, investment services fees (what BNY charges for custody, fund administration, clearing and related services), rose 13% to $2,909M. The 10-Q attributes this "primarily" to "net new business, higher client activity and higher market values." Foreign exchange revenue rose 8% to $229M on higher client volumes, and financing-related fees rose 25% to $64M on higher underwriting fees. Investment management and performance fees grew a slower 5% to $796M. Performance fees were just $3M, down from $10M a year earlier.
Net interest income (+20%). NII rose to $1,446M. BNY says the increase primarily reflects "the reinvestment of investment securities at higher yields and balance sheet growth, partially offset by deposit margin compression." In plain terms, as older, lower-yielding bonds matured, BNY reinvested the money at better rates. Average interest-earning assets also grew 6% to $397.6 billion, with average loans up 20% to $85.6 billion. The average rate BNY paid on interest-bearing deposits fell from 2.95% to 2.33%. The net interest margin (NII as a share of interest-earning assets) widened from 1.27% to 1.45%.
Investment and other revenue was $216M, up from $184M. It was helped by better seed capital results (gains on BNY's own money used to launch its funds) and partly offset by $25M of net losses on sales of investment securities.
Segment results
Segment
Q2 2026 revenue
YoY
Pre-tax income
YoY
Pre-tax margin (Q2 2025)
Securities Services
$2,828M
+15%
$1,111M
+28%
39.3% (35.3%)
Market and Wealth Services
$1,970M
+12%
$1,024M
+21%
52.0% (48.4%)
Investment and Wealth Management
$863M
+8%
$182M
+23%
21.1% (18.5%)
Securities Services (custody, fund services, corporate trust, depositary receipts) grew fastest. Asset Servicing revenue rose 14% to $2,121M on higher net interest income, client activity, market values and FX revenue. Issuer Services rose 17% to $707M on higher Corporate Trust revenue. The segment's assets under custody and/or administration rose 14% to $45.3 trillion, securities lending revenue rose 39% to $78M, and the value of securities on loan rose 25% to $645 billion. The filing also flags a structural headwind: investors keep shifting toward cheaper fund products, which is "negatively impacting our investment services fees."
Market and Wealth Services (Pershing clearing for brokers and advisers, payments, and tri-party collateral management) is still the most profitable segment, at a 52.0% pre-tax margin. Clearance and Collateral Management revenue rose 16% to $593M as average collateral balances grew 16% to $8.2 trillion. Payments and Trade rose 17% to $571M, mainly on higher NII and net new business. Wealth Solutions (Pershing) grew 7% to $806M and brought in $25 billion of net new assets on its U.S. platform, compared with $10 billion of net outflows a year earlier. Segment expenses rose only 4%, partly because the prior-year quarter included litigation reserves.
Investment and Wealth Management (asset management and private wealth) is the smallest and least profitable segment. Revenue grew 8% to $863M, and Wealth Management revenue rose 11% to $286M. Assets under management rose to $2,226 billion, mainly because markets rose ($94 billion of positive market impact in the quarter). Client flows were mixed. Cash (money-market) strategies took in $24 billion, but long-term strategies lost $21 billion. That included $14 billion out of liability-driven investments (portfolios pension funds use to match their future payouts) and $9 billion out of index strategies. Overall, net inflows were $3 billion. BNY says this mix of flows held back management-fee growth.
Costs
Noninterest expense rose 7% to $3,439M. The 10-Q attributes this to "higher revenue-related expenses, investments and employee salary increases, partially offset by efficiency savings." Staff costs, the largest line, grew only 1% to $1,785M despite annual pay rises, which fits with the 7% lower headcount. Other lines grew faster: software and equipment (+8% to $569M), professional and purchased services (+14% to $441M), business development (+28% to $68M) and "other" expense (+66% to $153M). The provision for credit losses was an $8M release (a benefit), mainly from improvements in commercial real estate exposure. At this scale, that amount is immaterial.
Capital and shareholder returns
CET1 ratio: common equity tier 1 capital as a share of risk-weighted assets, regulators' core measure of a bank's cushion against losses. It was 11.0% under the Standardized Approach at June 30, 2026, unchanged from March 31 but down from 11.9% at Dec. 31, 2025. The filing attributes the decline to buybacks, dividends and higher risk-weighted assets, partly offset by earnings. The Tier 1 leverage ratio was 5.9%.
Capital returned: $1.5 billion to common shareholders in Q2, including $1.1 billion of buybacks (8.0 million shares at an average $137.62). In the first half, BNY repurchased 16.3 million shares for $2.1 billion.
New authorization and dividend: in April 2026 BNY announced a new $10.0 billion share repurchase authorization. In July the board approved a 19% increase in the quarterly dividend, from $0.53 to $0.63 per share. The Federal Reserve kept BNY's stress capital buffer at the 2.5% regulatory floor through Sept. 30, 2027.
The average liquidity coverage ratio was 111%.
Outlook
The 10-Q gives no numeric revenue or earnings guidance. It does give one sensitivity: a 5% move in global equity markets, spread evenly through the year, would change fee revenue by less than 1% and diluted EPS by $0.05 to $0.08. It also notes seasonal patterns that matter for the next quarter. In the third quarter, volume-related fees "may decline due to reduced client activity," while the second quarter usually benefits from higher depositary receipts revenue tied to client dividend payments.
Our read: the NII gain from reinvesting maturing bonds at higher yields is the most mechanical driver. It should continue as long as there are low-yielding securities left to roll over, and the filing names "deposit margin compression" as the offset to watch. On fees, 13% growth in investment services fees, $62.6 trillion of assets under custody and/or administration and positive Pershing flows point to healthy underlying demand. But part of that growth came from higher market values, which could reverse. CET1 is at 11.0% after heavy buybacks, with a $10 billion authorization in place. Buybacks are what let EPS grow faster than net income, so their future pace depends on BNY being willing to keep capital around this level rather than rebuild it.