BNY Mellon (BK) — Q2 2026 Earnings Preview
Key Points
| Factor | Details |
|---|---|
| Q2 2026 Consensus | Revenue: $5,344M; EPS: $2.20; Net Income: $1,501M |
| Q1 2026 Actuals | Revenue: $5,409M (+13% YoY); EPS: $2.24 (+42% YoY); Net Income: $1,562M |
| Guidance | FY26 revenue growth: ~6% YoY (raised from 5%); NII up ~10% YoY; expense growth at top end of 3–4% range |
| Comparables | Q2 2025 revenue: $5,028M; EPS: $1.93; Net Income: $1,391M |
| Key Watch Areas | Fee growth sustainability, NII trajectory, expense discipline, AI/productivity impact, organic growth acceleration, Wealth/IWM margin recovery, deposit trends, cross-sell momentum |
| Macro/Operating | Management describes environment as "dynamic" but "constructive"; strong client activity and sales momentum continue |
Most Important Factors to Watch for Q2 2026
| Factor | What to Watch / Why It Matters |
|---|---|
| Revenue Growth | Consensus expects $5,344M (+11% YoY vs. Q2 2025 actuals). Q1 2026 was $5,409M (+13% YoY). Look for continued double-digit growth, especially in Securities Services and Market & Wealth Services. |
| EPS and Profitability | Consensus EPS is $2.20 (+14% YoY vs. Q2 2025 actuals). Q1 2026 was $2.24 (+42% YoY). Monitor for margin expansion and ROTCE improvement (Q1 2026: 29%). |
| Net Interest Income (NII) | Guidance is for FY26 NII up ~10% YoY. Q1 2026 NII was $1,370M (+18% YoY, +2% QoQ). Watch for sequential NII growth and any commentary on deposit mix and margin compression. |
| Fee Revenue | Q1 2026 fee revenue up 11% YoY. Guidance implies fee growth may moderate to low/mid-single digits for the rest of the year. Watch for sustainability of double-digit fee growth and organic fee growth acceleration. |
| Expense Discipline | FY26 expense growth guided to top end of 3–4% range. Q1 2026 noninterest expense up 5% YoY. Monitor for continued efficiency gains, especially from AI and platform operating model. |
| Organic Growth | Organic fee growth was 3% in FY25, with management targeting further acceleration. Track progress on cross-sell (clients buying 3+ products up 64% over 2 years) and new logo wins (10% of sales in 2025). |
| Segment Performance | Securities Services and Market & Wealth Services are key growth drivers. Watch for margin improvement in Investment & Wealth Management (IWM), which has lagged but is expected to recover. |
| AI/Productivity Impact | Over 200 AI solutions in production; management expects increasing productivity and capacity creation. Look for updates on realized financial benefits and further adoption. |
| Deposits and Balance Sheet | Q1 2026 average deposits up 13% YoY, 3% QoQ. Management expects balances to moderate but remain above 2025 levels. Watch for deposit mix, NIB trends, and capital ratios. |
| Capital Returns | Ongoing buybacks and dividends; payout ratio 87% in Q1 2026. New $10B repurchase program authorized. Watch for updates on capital deployment and leverage ratios. |
Recent Results and Year-Over-Year Comparables
Quarterly Financials — Actuals
| Quarter | Revenue ($M) | YoY Growth | Net Income ($M) | EPS | Pre-tax Margin | ROTCE | Avg Deposits ($M) | Notes |
|---|---|---|---|---|---|---|---|---|
| Q1 2026 | 5,409 | +13% | 1,562 | 2.24 | 37% | 29.3% | 318,446 | Record sales, strong NII |
| Q4 2025 | 5,179 | +7% | 1,427 | 2.02 | 36% | 26.6% | 310,482 | |
| Q3 2025 | 5,081 | +9% | 1,339 | 1.88 | 36% | 25.6% | 299,326 | |
| Q2 2025 | 5,028 | +9% | 1,391 | 1.93 | 37% | 27.8% | 300,298 | |
| Q1 2025 | 4,792 | +7% | 1,149 | 1.58 | 32% | 24.2% | 282,535 |
Annual Financials — Actuals
| Fiscal Year | Revenue ($M) | YoY Growth | Net Income ($M) | EPS | Pre-tax Margin | ROTCE | Avg Deposits ($M) | Notes |
|---|---|---|---|---|---|---|---|---|
| 2025 | 20,080 | +8% | 5,306 | 7.40 | 35% | 26.1% | Record net income | |
| 2024 | 18,619 | 4,336 | 5.80 | 31% | 22.8% |
Forward Consensus Estimates
Quarterly Consensus
| Quarter | Revenue ($M) | EPS | Net Income ($M) |
|---|---|---|---|
| Q2 2026 | 5,344 | 2.20 | 1,501 |
| Q3 2026 | 5,329 | 2.13 | 1,454 |
| Q4 2026 | 5,414 | 2.21 | 1,483 |
Annual Consensus
| Fiscal Year | Revenue ($M) | EPS | Net Income ($M) |
|---|---|---|---|
| 2026 | 21,475 | 8.74 | 6,096 |
Guidance Summary
| Metric | FY26 Guidance (as of Q1 2026) | Q1 2026 Update |
|---|---|---|
| Total Revenue Growth | ~6% YoY (raised from 5%) | Q1 2026 revenue +13% YoY |
| Net Interest Income | Up ~10% YoY | Q1 2026 NII +18% YoY; expect moderation but above 2025 |
| Expense Growth | Top end of 3–4% YoY range | Q1 2026 expense +5% YoY |
| Tax Rate | ~23% per quarter (excl. Q1 benefit) | Q1 2026 effective tax rate 19.1% (stock award benefit) |
| Operating Leverage | >100 bps positive in FY26 | Q1 2026: 325 bps (GAAP), 211 bps (adj.) |
| Medium-Term Targets | Pre-tax margin 38%, ROTCE 28% | Q1 2026: Pre-tax margin 37%, ROTCE 29% |
Segment Trends and KPIs
| Segment | Q1 2026 Revenue ($M) | YoY Growth | Pre-tax Margin | Key Trends/Notes |
|---|---|---|---|---|
| Securities Services | 2,678 | +17% | 39% | Strong client activity, ETF AUC/A +33% YoY |
| Market & Wealth Services | 1,892 | +11% | 51% | Wealth Solutions (Pershing) net new assets +3% ann. |
| Investment & Wealth Mgmt | 825 | +6% | 11% | Margin recovery underway, AUM +6% YoY |
How Did They Report Last Year? Are They Coming Off a Tough Comparable?
- Q2 2025 Actuals: Revenue $5,028M (+9% YoY), EPS $1.93 (+27% YoY), Net Income $1,391M (+21% YoY)
- Q2 2026 Consensus: Revenue $5,344M (+6% YoY), EPS $2.20 (+14% YoY), Net Income $1,501M (+8% YoY)
- Q1 2026 Actuals: Revenue $5,409M (+13% YoY), EPS $2.24 (+42% YoY), Net Income $1,562M (+36% YoY)
Conclusion:
- Q2 2025 was a strong quarter, but Q1 2026 delivered even stronger growth, setting a high bar for Q2 2026.
- The company is coming off a period of accelerating growth, with Q1 2026 showing double-digit increases across revenue, EPS, and net income.
- The YoY comparable for Q2 2026 is tough, but management's raised guidance and Q1 outperformance suggest continued momentum.
Summary and Conclusions
- Momentum Remains Strong: BNY Mellon enters Q2 2026 with record Q1 results, raised full-year guidance, and strong sales momentum.
- Key Focus Areas: Investors should watch for sustained double-digit revenue and NII growth, expense discipline, further margin expansion, and evidence of organic growth acceleration (cross-sell, new logos).
- AI and Productivity: Management continues to emphasize AI as a driver of both efficiency and growth, with over 200 AI solutions in production and more to come.
- Segment Watch: Securities Services and Market & Wealth Services are expected to remain growth engines; IWM margin recovery is a key area to monitor.
- Balance Sheet and Capital Returns: Deposit trends, capital ratios, and ongoing buybacks remain supportive.
- Macro Sensitivity: Management describes the environment as dynamic but constructive, with the business model positioned to perform across a range of scenarios.
Bottom Line: BNY Mellon is coming off a very strong Q1 and a robust FY25, with Q2 2026 consensus expecting continued growth but at a slightly moderated pace. The most important factors for the upcoming report are the sustainability of revenue/NII growth, expense control, margin expansion, and tangible evidence of organic growth and productivity gains from AI and the integrated operating model. The company faces a tough YoY comparable but has set expectations for another year of positive operating leverage and higher profitability.
