BANK OF NEW YORK MELLON CORP (BNY) — Earnings Preview (Q3 2026)
Key Points
| Factor | Details & Signals to Watch |
|---|---|
| Revenue Growth | Consensus for Q3 2026: $5,546M (+12% YoY vs. Q3 2025 actual $4,976M). Strong double-digit growth expected. |
| Net Interest Income (NII) | Q2 2026 NII up +20% YoY; guidance for FY26 NII growth raised to +12–13%. Watch for sustainability of NII. |
| Fee Revenue | Q2 2026 fee revenue up +11% YoY. Organic fee growth at 4.5% 1H26. Monitor for continued acceleration. |
| Operating Leverage | Q2 2026: +400 bps YTD; FY26 guide now ~400 bps. Margin expansion is a key focus. |
| Pre-tax Margin | Q2 2026: 40% (vs. 36.6% Q2 2025). Already above medium-term target (38%). |
| ROTCE | Q2 2026: 31.3% (vs. 27.8% Q2 2025). Also above medium-term target (28%). |
| Expense Growth | FY26 expense guide raised to +6–7% (from +3–4%), mainly revenue-related. Watch for discipline and mix. |
| Capital Returns | Payout ratio YTD 2026: 87%. Dividend increased +19%. Buybacks continue. |
| Segment Trends | Securities Services, Market & Wealth Services, and IWM all showing broad-based growth. |
| Seasonality/Comparables | Q3 is seasonally slow; Q2 is typically strongest. Q3 2025 was a tough comp due to idiosyncratic strength. |
Forward-Looking Consensus and Guidance
Quarterly Consensus (Q3 2026–Q2 2027)
| Quarter | Revenue ($M) | EPS (GAAP) | Net Income ($M) |
|---|---|---|---|
| Q3 2026E | 5,546 | 2.27 | 1,539 |
| Q4 2026E | 5,612 | 2.29 | 1,535 |
| Q1 2027E | 5,667 | 2.40 | 1,645 |
| Q2 2027E | 5,892 | 2.65 | 1,777 |
Full-Year Consensus (FY2026–FY2027)
| Fiscal Year | Revenue ($M) | EPS (GAAP) | Net Income ($M) |
|---|---|---|---|
| FY2026E | 22,261 | 9.24 | 6,371 |
| FY2025A | 20,035 | 7.31 | 5,292 |
Most Important Factors to Watch This Quarter
- Revenue Growth: Consensus expects +12% YoY for Q3 2026. Q2 2026 delivered +13% YoY. The bar is high; any deceleration or miss will be notable.
- Net Interest Income (NII): Q2 2026 NII was up +20% YoY; full-year guide raised to +12–13%. Q3 is a seasonally slow quarter for deposits/NII; watch for sequential moderation.
- Fee Revenue & Organic Growth: Fee revenue up +11% YoY in Q2 2026; organic fee growth at 4.5% 1H26. Management expects further acceleration as commercial/platform models mature.
- Operating Leverage & Margins: Q2 2026 pre-tax margin at 40%, ROTCE at 31%. Both are above medium-term targets. FY26 guide for operating leverage raised to ~400 bps. Any sign of margin compression or expense slippage will be scrutinized.
- Expense Discipline: FY26 expense growth guide raised to +6–7% (from +3–4%), mainly due to revenue-related expenses and investments. Investors will look for evidence of continued efficiency and self-funding of growth.
- Capital Returns: YTD payout ratio at 87%; dividend up +19%. Buybacks ongoing. Any change in capital return philosophy or payout ratio will be material.
- Segment Performance: Securities Services, Market & Wealth Services, and IWM all posted strong growth in Q2. Watch for continued broad-based momentum and cross-sell metrics.
- Seasonality and Comparables: Q3 is seasonally slow, and Q3 2025 was a tough comp due to idiosyncratic deposit/NII strength. Expect sequential moderation; YoY growth may compress.
Recent Actuals — How Did They Report Last Year?
Quarterly Results (Q3 2025–Q2 2026)
| Quarter | Revenue ($M) | YoY Growth | EPS (GAAP) | Net Income ($M) | Pre-tax Margin | ROTCE |
|---|---|---|---|---|---|---|
| Q2 2026 | 5,698 | +13% | 2.45 | 1,696 | 39.8% | 31.3% |
| Q1 2026 | 5,409 | +13% | 2.24 | 1,562 | 37.3% | 29.3% |
| Q4 2025 | 5,179 | +7% | 2.02 | 1,427 | 36.0% | 26.6% |
| Q3 2025 | 5,081 | +9% | 1.88 | 1,339 | 36.0% | 25.6% |
| Q2 2025 | 5,028 | +8% | 1.93 | 1,391 | 36.6% | 27.8% |
- Q3 2025 revenue: $5,081M (+9% YoY), EPS: $1.88, pre-tax margin: 36%, ROTCE: 25.6%
- Q2 2025 revenue: $5,028M (+8% YoY), EPS: $1.93, pre-tax margin: 36.6%, ROTCE: 27.8%
Full-Year Results (FY2025)
| Fiscal Year | Revenue ($M) | YoY Growth | EPS (GAAP) | Net Income ($M) | Pre-tax Margin | ROTCE |
|---|---|---|---|---|---|---|
| FY2025 | 20,080 | +8% | 7.40 | 5,306 | 35.0% | 26.1% |
| FY2024 | 18,619 | 5.80 | 4,336 | 30.0% | 22.8% |
Year-over-Year Comparable Analysis
- Q3 2025 was a strong quarter with +9% revenue growth and robust NII (+18% YoY), driven by constructive markets, strong client activity, and positive operating leverage.
- Q3 2026 faces a tough comparable, as Q3 is seasonally the slowest quarter and Q3 2025 benefited from idiosyncratic deposit/NII strength.
- Management has flagged that Q3 2026 NII and deposit growth will likely moderate sequentially, and YoY growth rates may compress versus the first half.
Management Guidance and Intra-Quarter Commentary
Updated FY26 Guidance (as of Q2 2026)
| Metric | FY26 Guidance (as of Q2 2026) | Prior FY26 Guidance (as of Q1 2026) |
|---|---|---|
| Total Revenue Growth | +10–11% YoY (market dependent) | +6% |
| Net Interest Income (NII) | +12–13% YoY | +10% |
| Expense Growth | +6–7% YoY (excl. notable items) | +3–4% |
| Operating Leverage | ~400 bps positive | >100 bps |
| Pre-tax Margin | Already above 38% medium-term target | 38% medium-term target |
| ROTCE | Already above 28% medium-term target | 28% medium-term target |
| Tax Rate | ~23% for remaining quarters | ~23% |
| Capital Return | Payout ratio dynamic, no explicit guide | 90–95% (early year commentary) |
Key Management Commentary
- "We are increasing our outlook for total revenue, excluding notable items in 2026 to up 10% to 11% year-over-year, of course, market-dependent."
- "That includes our current expectation for full year 2026 net interest income to be up 12% to 13% year-over-year."
- "Accordingly, we now expect expenses, excluding notable items for the year to be up 6% to 7% year-over-year, primarily reflecting higher revenue-related expenses."
- "Taken together, that means we now expect to deliver approximately 400 basis points of positive operating leverage in 2026."
- "Q3 is seasonally the slowest quarter... last year's quarter is tough to beat."
Segment Trends and KPIs
| Segment | Q2 2026 Revenue ($M) | YoY Growth | Pre-tax Margin | Notable Trends |
|---|---|---|---|---|
| Securities Services | 2,828 | +15% | 39.3% | ETF AUC/A +35% YoY; >50% of new wins cross-sold |
| Market & Wealth Services | 1,970 | +12% | 52.0% | Wealth Solutions net new assets +4% annualized |
| Investment & Wealth Mgmt | 863 | +8% | 21.1% | AUM +6% YoY; margin improvement, but still below target |
Summary and Conclusions
- BNY enters Q3 2026 with strong momentum, having delivered record revenue, margin, and ROTCE in Q2.
- The company has already exceeded its medium-term targets for pre-tax margin (38%) and ROTCE (28%) in the first half.
- Guidance for FY26 has been raised across revenue, NII, and operating leverage, but expense growth is also tracking higher due to revenue-related costs and investments.
- Q3 is seasonally slow and faces a tough YoY comp, especially for NII and deposits. Sequential moderation is expected.
- Key factors to watch are the sustainability of double-digit revenue and NII growth, continued margin expansion, expense discipline, and evidence of further acceleration in organic fee growth and cross-sell.
- Capital returns remain robust, with an 87% payout ratio YTD and a recent dividend increase.
- Management continues to emphasize the durability of the business model, the benefits of the platform/commercial model transformation, and the long runway for organic growth and innovation (AI, digital assets).
- Investors should focus on whether BNY can maintain its strong growth trajectory and margin outperformance through the seasonal Q3 slowdown and into year-end, while balancing investment and expense control.
In summary: BNY is coming off a very strong first half, with tough comparables for Q3. The Street expects continued double-digit revenue and NII growth, but management has flagged seasonal moderation. Margin and ROTCE are already above medium-term targets. The most important signals will be the sustainability of growth, margin discipline, and further evidence of durable organic fee growth and cross-sell.
