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BNY Q1 Earnings Beat on Growth in NII & Fee Income, Cost Woes Remain
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Key Takeaways
BK Q1 earnings beat estimates, driven by higher fee income, NII growth and provision benefit.
BNY saw revenues rise 12.9% y/y on fee growth and NII, aided by higher yields and balance sheet growth.
BK expenses climbed 4.6% y/y, while the CET1 ratio weakened y/y.
The Bank of New York Mellon Corporation’s (BK - Free Report) first-quarter 2026 adjusted earnings of $2.25 per share handily surpassed the Zacks Consensus Estimate of $1.94. Also, the bottom line reflected a jump of 42.4% 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 the results. However, higher expenses hurt the results to some extent.
Results excluded certain non-recurring items. Considering those, net income applicable to common shareholders (GAAP basis) was $1.56 billion, up 35.9% from the year-ago quarter.
BK’s Revenues Improve, Expenses Rise
Total revenues increased 12.9% year over year to $5.41 billion. The top line surpassed the Zacks Consensus Estimate of $5.15 billion.
NII was $1.37 billion, up 18.2% 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 8 basis points (bps) year over year to 1.38%.
Total fee and other revenues increased 11.2% year over year to $4.04 billion. The rise was driven by an increase in almost all fee income components except for distribution and servicing fees.
Total non-interest expenses (GAAP basis) were $3.40 billion, up 4.6% from the prior-year quarter. The rise was due to an increase in almost all cost components except for net occupancy costs, bank assessment charges and costs related to amortization of intangible assets.
BNY’s Asset Balances Increase
As of March 31, 2026, AUM was $2.1 trillion, up 5% 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 $59.4 trillion increased 11.9% year over year, primarily reflecting net client inflows, higher market values and the favorable impact of the weaker U.S. dollar.
BK’s Credit Quality Improves
The allowance for loan losses, as a percentage of total loans, was 0.23%, down 18 bps from the prior-year quarter. As of March 31, 2026, non-performing assets were $69 million, down 67.6% from the year-ago quarter.
In the reported quarter, the company recorded a provision benefit of $7 million, primarily driven by improvements in commercial real estate exposure, partially offset by changes in the macroeconomic factors. In the prior-year quarter, provisions were $18 million.
BNY’s Capital Ratios Fall
As of March 31, 2026, the common equity Tier 1 ratio was 11%, down from 11.5% as of March 31, 2025. The Tier 1 leverage ratio was 6%, down from 6.2% as of March 31, 2025.
BK’s Share Repurchase Update
In the reported quarter, BNY repurchased shares worth $983 million.
Also, the company’s board of directors authorized a new common share repurchase program worth $10 billion.
Our Take on BNY
BK’s global expansion efforts and a strong balance sheet position are likely to keep supporting its top-line growth. 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
Bank of America’s (BAC - Free Report) first-quarter 2026 earnings of $1.11 per share handily surpassed the Zacks Consensus Estimate of $1.00. The bottom line grew 24.7% year over year.
Improvement in the trading and investment banking (IB) business, along with higher NII, drove Bank of America’s total revenues. While provisions declined in the quarter on a year-over-year basis, non-interest expenses increased, which hurt the results to some extent.
JPMorgan (JPM - Free Report) posted first-quarter 2026 earnings of $5.94 per share, up 17.2% from $5.07 in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of $5.49.
JPMorgan reported net revenues of $49.8 billion, which increased 10% year over year. The metric also topped the consensus mark of $48.6 billion. JPM’s quarterly results were powered by a record Markets performance, a robust IB business and higher NII.
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BNY Q1 Earnings Beat on Growth in NII & Fee Income, Cost Woes Remain
Key Takeaways
The Bank of New York Mellon Corporation’s (BK - Free Report) first-quarter 2026 adjusted earnings of $2.25 per share handily surpassed the Zacks Consensus Estimate of $1.94. Also, the bottom line reflected a jump of 42.4% 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 the results. However, higher expenses hurt the results to some extent.
Results excluded certain non-recurring items. Considering those, net income applicable to common shareholders (GAAP basis) was $1.56 billion, up 35.9% from the year-ago quarter.
BK’s Revenues Improve, Expenses Rise
Total revenues increased 12.9% year over year to $5.41 billion. The top line surpassed the Zacks Consensus Estimate of $5.15 billion.
NII was $1.37 billion, up 18.2% 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 8 basis points (bps) year over year to 1.38%.
Total fee and other revenues increased 11.2% year over year to $4.04 billion. The rise was driven by an increase in almost all fee income components except for distribution and servicing fees.
Total non-interest expenses (GAAP basis) were $3.40 billion, up 4.6% from the prior-year quarter. The rise was due to an increase in almost all cost components except for net occupancy costs, bank assessment charges and costs related to amortization of intangible assets.
BNY’s Asset Balances Increase
As of March 31, 2026, AUM was $2.1 trillion, up 5% 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 $59.4 trillion increased 11.9% year over year, primarily reflecting net client inflows, higher market values and the favorable impact of the weaker U.S. dollar.
BK’s Credit Quality Improves
The allowance for loan losses, as a percentage of total loans, was 0.23%, down 18 bps from the prior-year quarter. As of March 31, 2026, non-performing assets were $69 million, down 67.6% from the year-ago quarter.
In the reported quarter, the company recorded a provision benefit of $7 million, primarily driven by improvements in commercial real estate exposure, partially offset by changes in the macroeconomic factors. In the prior-year quarter, provisions were $18 million.
BNY’s Capital Ratios Fall
As of March 31, 2026, the common equity Tier 1 ratio was 11%, down from 11.5% as of March 31, 2025. The Tier 1 leverage ratio was 6%, down from 6.2% as of March 31, 2025.
BK’s Share Repurchase Update
In the reported quarter, BNY repurchased shares worth $983 million.
Also, the company’s board of directors authorized a new common share repurchase program worth $10 billion.
Our Take on BNY
BK’s global expansion efforts and a strong balance sheet position are likely to keep supporting its top-line growth. 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 Quote
Currently, BNY carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Major Banks
Bank of America’s (BAC - Free Report) first-quarter 2026 earnings of $1.11 per share handily surpassed the Zacks Consensus Estimate of $1.00. The bottom line grew 24.7% year over year.
Improvement in the trading and investment banking (IB) business, along with higher NII, drove Bank of America’s total revenues. While provisions declined in the quarter on a year-over-year basis, non-interest expenses increased, which hurt the results to some extent.
JPMorgan (JPM - Free Report) posted first-quarter 2026 earnings of $5.94 per share, up 17.2% from $5.07 in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of $5.49.
JPMorgan reported net revenues of $49.8 billion, which increased 10% year over year. The metric also topped the consensus mark of $48.6 billion. JPM’s quarterly results were powered by a record Markets performance, a robust IB business and higher NII.