01—Abstract
Summary
Summary of the 8-K filed January 13, 2026. Cited figures are marked; the original filing is the authoritative source.
The Bank of New York Mellon (BK) reported strong fourth-quarter 2025 results on January 13, 2026, closing a year it describes as record for the firm.
Q4 total revenue rose 7% year-over-year to $5.2 billiona, GAAP diluted EPS was $2.02 (up 31%), and EPS excluding notable items was $2.08 (up 21%). Noninterest expense was flat year-over-year at $3.4 billion, or up 4% excluding notable items, producing 670 bps of positive operating leverage on a GAAP basis. Pre-tax operating margin reached 36% (37% excluding notable items), and ROTCE was 26.6%.
Net interest income grew 13% to $1.3 billionb, driven by reinvestment of maturing securities at higher yields and balance sheet growth, partly offset by deposit margin compression. Credit quality remained benign, with a $26 million provision benefit. For full-year 2025, BNY reported record net income of $5.3 billion applicable to common shareholders, record revenue of $20.1 billion, diluted EPS of $7.40 (up 28%, or $7.50 excluding notable items), and ROTCE of 26.1%.
The company returned $5.0 billionc to common shareholders, including $3.5 billion of buybacks and $1.4 billion of dividends, for a total payout ratio of 94%. Capital remained strong, with the CET1 ratio at 11.9% (up from 11.2% a year earlier) and the Tier 1 leverage ratio at 6.0%. AUC/A rose 14% to $59.3 trillion and AUM rose 7% to $2.2 trillion, though AUM carried cumulative net outflows for the year.
Looking forward, management issued 2026 guidance calling for total revenue (excluding notable items) up 3–4%d and expenses up approximately 5%, which would imply positive operating leverage of roughly 100+ bps for a fourth consecutive year. Management also raised its medium-term targets, now at a pre-tax margin of 33% or higher and ROTCE of 30% or higher (excluding notable items), up from 30% and 23% previously.
The guidance assumes market-implied forward rates and flat equity and fixed income market values from year-end 2025 levels. Investors should weigh the strong operating momentum against the sensitivity of net interest income to rate moves and the dependence on market values for fee revenue.
02—Key points
Key Highlights
- Q4 2025 total revenue of $5.2 billion rose 7% YoY, with net interest income up 13% to $1.3 billion and fee revenue up 5%.
- GAAP diluted EPS of $2.02 (up 31% YoY) and adjusted EPS of $2.08 (up 21% YoY) excluding notable items such as severance.
- Full-year 2025 record net income applicable to common of $5.3 billion, revenue of $20.1 billion, and diluted EPS of $7.40 (up 28%).
- Pre-tax operating margin of 36% in Q4 (37% adjusted) and ROTCE of 26.6%, with eight consecutive quarters of positive operating leverage.
- Capital returns of $5.0 billion in 2025 (94% payout ratio); CET1 ratio improved to 11.9% from 11.2% a year earlier.
- 2026 outlook targets total revenue growth of 3–4% and expense growth of about 5%, marking a fourth consecutive year of positive operating leverage.
- Raised medium-term targets to a pre-tax margin of 33%+ and ROTCE of 30%+ (excluding notable items), up from 30% and 23%.
03—Questions
Frequently Asked Questions
What drove the strong Q4 2025 earnings growth?
Growth was driven primarily by net interest income, which rose 13% YoY on reinvestment of maturing securities at higher yields and balance sheet growth. Fee revenue also grew 5%, supported by higher market values, net new business, client activity, and a weaker U.S. dollar. Expenses were held flat, which produced the operating leverage that lifted EPS 31%.
What are the notable items affecting Q4 2025 results?
Q4 GAAP noninterest expense included $51 million of net notable items, mainly $98 million of severance partially offset by a $50 million FDIC special assessment adjustment. Excluding these items, EPS was $2.08 rather than $2.02, and noninterest expense rose 4% YoY instead of being flat.
What is BNY's 2026 financial outlook?
BNY expects total revenue (excluding notable items) to grow 3–4% in 2026 and expenses to rise about 5%, based on market-implied forward rates and flat year-end 2025 market values. Management expects this to deliver a fourth consecutive year of positive operating leverage, supported by reinvestment yields, higher organic growth, and efficiency savings, offset by incremental investments and revenue-related expenses.
How strong is BNY's capital and liquidity position?
At December 31, 2025, the CET1 ratio was 11.9%, the Tier 1 leverage ratio was 6.0%, and the supplementary leverage ratio was 6.7%, all preliminary. Average liquidity coverage ratio was 112% and average net stable funding ratio was 130%. CET1 capital rose to $21.1 billion, and the company's medium-term CET1 target of about 11% and Tier 1 leverage target of 5.5–6% are unchanged.
What risks should investors monitor?
Key risks include net interest income sensitivity to interest rate changes, with the company reporting a 100 bps rate shock impact in its footnotes, and deposit margin compression. Fee revenue depends on market values and client activity, and AUM experienced cumulative net outflows during 2025. Securities portfolio carries unrealized losses of about $3.0 billion, mostly on held-to-maturity holdings. Management also flagged geopolitical, trade-policy, and fiscal risks in its forward-looking statements.
04—Continue