Economists often examine bank earnings for signs of consumer financial health, but the report released yesterday by BNY Mellon provided a different perspective focused on financial markets.
BNY Mellon, founded in 1784 by Alexander Hamilton, operates as a custodian bank for institutional clients rather than serving retail consumers. The bank states it works with 92% of Fortune 100 companies, 94% of the world's top investment managers, 95% of S&P's top 100 banks globally, 94% of the largest US retirement funds, and 98% of the top life and health insurers.
A central figure in the earnings report was assets under custody and administration, which reached $59.3 trillion. This represents a 3% increase from the prior quarter and a 14% rise compared to the same period last year.
The company attributed the growth to client inflows, higher market values, and the effect of a weaker US dollar. Market performance last year included a 16% gain for the S&P 500 and a 7.12% gain for the Morningstar US Core Bond Index, its highest since 2020.
Fee revenue increased 5% year-over-year to $3.7 billion, while net interest income rose 13% from the fourth quarter of the previous year. The bank also updated its medium-term targets for pretax margin and return on tangible common equity.
Analysts from Truist noted in a Tuesday morning report that some investors might find the bank's 2026 outlook insufficiently ambitious, though they viewed potential share weakness as a buying opportunity.
Separately, BNY Mellon CEO Robin Vince expressed support for Federal Reserve independence, joining JPMorgan Chase CEO Jamie Dimon in responding to White House pressure on Fed Chair Jerome Powell. Vince described the administration's actions as "counterproductive" to improving affordability, according to The Wall Street Journal. He stated that Fed independence forms a critical foundation for the bond market and that undermining it does not appear to advance the administration's primary objectives.