Preliminary brief— based on press release only. Full analysis including management tone and Q&A will be added when the transcript is available.

BK · Q4 2025 Earnings

BNY Mellon

Reported January 13, 2026

30-second summary

Q4 revenue grew 7% YoY to $5.18B, GAAP EPS printed $2.02, and pre-tax operating margin held at 36% — but the print is dominated by management raising medium-term targets: pre-tax margin to 38% (+500bps) and ROTCE to 28% (+500bps), alongside first-time consolidated FY2026 revenue guidance of ~5% YoY growth (ex-notables) with >100bps of positive operating leverage. Dermot was explicit on composition: NII "a little bit ahead of 5%" and fees "a little bit lower than 5%". The ex-notables guide is not directly comparable to FY2025's reported +8% total revenue growth, so any deceleration framing requires a like-for-like basis the company did not provide. Investment & Wealth Management remains in YoY decline (-2%), making three consecutive quarters of contraction in the only segment not participating in the platform story.

Headline numbers

EPS

Q4 FY2025

$2.02

Revenue

Q4 FY2025

$5.18B

+7.0% YoY

Operating margin

Q4 FY2025

36.0%

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$5.18B	+7.0%	$5.08B	+1.9%
EPS	$2.02	—	$1.88	+7.4%
Operating margin	36.0%	—	36.0%	+0bps

Guidance

Company raised medium-term profitability targets by 500 bps (pre-tax margin to 38%, ROTCE to 28%) and guided FY2026 revenue growth at ~5% with >100 bps operating leverage, signaling confidence in margin expansion despite moderating topline growth.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Net Interest Income	Q4 FY2025	approximately flat sequentially	not separately disclosed in actuals	in-line with qualitative guidance	Met

New guidance

Metric	Period	Guide	YoY
Revenue Growth	FY2026	approximately 5% year-over-year	—
Expense Growth	FY2026	approximately 3-4% year-over-year	—
Operating Leverage	FY2026	more than 100 basis points	—
Pre-tax Margin Target	FY2026	38%	—
Return on Tangible Common Equity Target	FY2026	28%	—
Tier 1 Leverage Ratio Target	FY2026	5.5% to 6%	—
Tax Rate	FY2026	approximately 23%	—

Segment performance

Q4 FY2025

Segment	Q4 FY2025	YoY
Securities Services	$2.497B	+7.0%
Market and Wealth Services	$1.805B	+8.0%
Investment and Wealth Management	$0.854B	-2.0%

Capital & returns

Q4 FY2025

Segment	Q4 FY2025
Common Equity Tier 1 (CET1) Ratio	11.9%
Tier 1 Capital Ratio	14.6%
Total Deposits	$331.9 billion

Other KPIs

Q4 FY2025

Segment	Q4 FY2025
Assets Under Custody/Administration (AUC/A)	$59.3 trillion
Assets Under Management (AUM)	$2.2 trillion
Return on Common Equity	14.5%
Return on Tangible Common Equity (Non-GAAP)	26.6%
Net Interest Margin	1.38%

Management tone

Narrative arc: Q2 no ceiling on medium-term targets → Q3 non-trust businesses now two-thirds of pre-tax income → Q4 raising the bar — 38% margin and 28% ROTCE.

Medium-term targets formally elevated, not just hinted at. In Q2 Vince refused to put a ceiling on margins; in Q3 he reframed the business mix as evidence of structural re-rating; this quarter Dermot McDonough quantified it: "We are raising the bar. We are increasing our pre-tax margin target by 500 basis points to 38% and our return on tangible common equity target also by 500 basis points to 28%." This is the explicit conversion of two quarters of bullish posture into committed targets — and it removes a key analyst hedge ("they keep saying no ceiling but they haven't moved the dots").

The transformation language shifted from defensive to offensive. Vince: "With the foundations largely in place and more of the people in their seats to help us execute, the next phase of our journey to unlock BNY's potential is about realizing scale and growth opportunities." In Q2 the framing was "longer journey," in Q3 it was "platform benefits in 2028"; this quarter it is "next phase" with explicit forward optimism: "We are entering 2026 with positive momentum and we are excited for the work ahead of us." The 2028 full-benefit caveat remains intact, but the near-term tone has stepped up.

AI moved from capacity-saving to revenue-generating in management's framing. Across Q2 and Q3, AI was discussed primarily as expense leverage with "early signs" of contribution. This quarter Dermot reframed: "AI is unlocking capacity…it's all about growing with clients, increasing revenues, and optimizing the potential for our employees…AI as a superpower…is going to increase revenues, create capacity." With over 130 digital employees deployed in 2025, AI is now embedded in the medium-term financial targets rather than positioned as upside to them.

Organic growth thesis quantified for the first time. Vince disclosed that clients buying three or more BNY services have grown 60%+ over two years and that organic fee growth has climbed to 3%. This is the cleanest data the company has put behind the "One BNY" cross-sell thesis since it was introduced.

Recurring themes management leaned on this quarter:

Transition from transformation/foundation-setting to scale and growth realizationCommercial model consolidation driving cross-sell and deeper client relationships (64% increase in multi-product clients)AI as capacity multiplier and embedded capability (134 digital employees, ELIZA platform, Google Cloud integration)Digital assets and tokenization as frontier growth and market infrastructure playPositive operating leverage as north star metric and enabler of margin expansionPlatform operating model maturation reducing friction and improving productivity

Risks management surfaced:

Macroeconomic variability affecting revenue composition (NII, fees, markets)Market environment dependency for growth realization despite strategic executionExecution risk on AI adoption and scaling (cultural and operational integration)Deposit margin compression ongoing despite reinvestment gainsCompetitive pressure in wealth and asset management segments post-deconversion

Answers to last quarter's watch list

Does Investment & Wealth Management inflect out of YoY decline now that the deconversion is complete? Partial — segment improved to -2% YoY from -3% in Q3, but extended a third consecutive quarter of contraction. Management's Q3 "re-acceleration" framing has not yet shown in the print. Status: Continue monitoring

Q4 NII print against the "approximately flat sequentially" guide. Q4 NII printed $1,346M, up 9% sequentially from $1,236M — a clear beat versus the flat guide. NIM expanded to 1.38% from 1.31%. Status: Resolved positively (beat)

Q4 buyback pace within the 90–100% payout band. Dermot disclosed Q4 capital return of $1.4B representing a 100% total payout ratio — at the high end of the FY guide. CET1 still stepped up to 11.9% from 11.7%, reflecting strong earnings generation. Status: Resolved positively

Pre-tax operating margin defending 36%+. Held at 36% in Q4, matching Q3 and validating the floor. Full-year operating margin came in at 35%. The 38% medium-term target now provides an explicit ceiling-removal that wasn't quantified in Q3. Status: Resolved positively

AI production cadence — does 117 solutions extend toward ~200 by year-end? Disclosure framework shifted to digital-employee headcount, with over 130 deployed in 2025 (vs "over 100" cited in Q3); the company didn't repeat the "AI solutions in production" count, so the +75% QoQ cadence from Q3 cannot be directly extended. Status: Not resolved (metric reframed)

Effective tax rate landing inside 21–22% for FY2025, with FY2026 guided to ~23%. FY2025 tax rate not separately disclosed in the print, but FY2026 quarterly tax rate is explicitly guided to ~23%, confirming management's earlier flag that the favorable FY2025 rate would normalize higher. Status: Resolved negatively for FY2026 — a 100–200bps headwind from the FY2025 baseline.

What to watch into next quarter

Whether Q1 FY2026 revenue (ex-notables) growth tracks the +5% FY guide trajectory, and how the NII (>5%) vs fees (<5%) composition shakes out in the first print

Investment & Wealth Management posting its first positive YoY revenue quarter in over a year — a fourth consecutive decline would undermine the post-deconversion thesis entirely

Whether Securities Services and Market & Wealth Services Q4 YoY rates (+7% and +8%) hold or step further toward mid-single digits as FY2026 progresses

Q1 FY2026 expense growth against the +3–4% FY guide; the widened range (vs FY2025's ~3%) leaves room for slippage, and Dermot flagged Q1 staff expense as seasonally elevated from long-term incentive comp

NIM trajectory above 1.38% as reinvestment tailwinds compound — management framed FY2026 NII setup as constructive, with Dermot calling December a particularly strong month for NII

Pace of pre-tax margin progression toward the 38% medium-term target from FY2025's 35% — implied path is ~100bps/year, so Q1 FY2026 holding 36% would be on-track

Whether the 100% Q4 payout pace continues into Q1 FY2026 given CET1 has now built to 11.9%

Sources

BNY Mellon Q4 FY2025 Financial Supplement — SEC filing, https://www.sec.gov/Archives/edgar/data/1390777/000139077726000004/ex992_financialsupplementx.htm
BNY Mellon Q4 FY2025 earnings call commentary — Robin Vince (CEO) and Dermot McDonough (CFO) prepared remarks

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