Bank of New York Mellon Q3 2026: fee growth and NII drove operating leverage

Updated: October 16, 2026

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  • Bank Of New York Mellon Corp
  • Diluted EPS rose 24% on positive operating leverage
  • Fee revenue and net interest income both expanded double digits
  • Capital ratios moderated after $1.4B was returned to shareholders

BNY’s quarter was broad-based beneath the 24% EPS growth: fee revenue and NII both grew double digits while expense growth stayed at 8%. The release also shows what moderated sequentially: margin, capital ratios and deposits, while cash flow detail and fuller risk disclosures are not yet provided 8-K8-K8-K8-K8-K.

Bank of New York Mellon Corp · Q3 2026 · Reported 15 Oct 2026 · US

Q3 2026

Q3 2025

Y/Y

Total revenue

$5.676bn

$5.081bn

+12%

Fee revenue

$4.078bn

$3.637bn

+12%

Net interest income

$1.423bn

$1.236bn

+15%

Noninterest expense

$3.489bn

$3.236bn

+8%

Income before taxes

$2.186bn

$1.852bn

+18%

Diluted EPS

$2.34

$1.88

+24%

Pre-tax operating margin

38.5%

36.4%

+2.1 pp

Average deposits

$311.1bn

$299.3bn

+4%

AUC/A

$63.4tn

$57.8tn

+10%

AUM

$2.2tn

$2.1tn

+2%

CET1 ratio

10.9%

11.7%

-0.8 pp

Tier 1 leverage ratio

5.7%

6.1%

-0.4 pp

Broad-based fee growth, not just buybacks, drove the EPS gain

Diluted EPS rose to $2.34 from $1.88, while total revenue increased 12% to $5.676 billion and noninterest expense increased 8% to $3.489 billion 8-K. That mix produced positive operating leverage of 389 bps year over year and lifted pre-tax operating margin to 38.5% from 36.4%, which suggests the quarter’s earnings growth was driven by underlying business expansion rather than capital actions alone 8-K.

Management attributed the 12% revenue increase primarily to 12% fee revenue growth from net new business, higher client activity and higher market values, plus 15% net interest income growth from reinvesting securities at higher yields and balance sheet growth, partly offset by deposit margin compression 8-K. Investment and other revenue was weaker year over year because fixed income and equity trading activity, seed capital results and the absence of a 3Q25 disposal gain more than offset other investment gains, so the core strength came from fees and NII rather than this more variable line 8-K.

The strongest evidence is in Securities Services and Market and Wealth Services

Securities Services revenue increased 15% to $2.820 billion and income before taxes increased 24% to $1.008 billion, with drivers including higher net interest income, client activity, net new business and market values in Asset Servicing, plus higher Corporate Trust revenue in Issuer Services 8-K. Market and Wealth Services also grew revenue 12% to $1.984 billion and income before taxes 17% to $1.020 billion, driven by higher net interest income and market values in Wealth Solutions, higher net new business in Payments and Trade, and higher collateral balances and clearance volumes in Clearance and Collateral Management 8-K.

That matters because the release describes growth across multiple operating lines rather than a single hot business 8-K8-K8-K. Investment and Wealth Management was positive but clearly less important to the quarter’s growth, with revenue up 4% to $857 million as higher market values were partly offset by the mix of AUM flows and AUM itself increased only 2% to $2.187 trillion 8-K.

Sequentially, momentum was steadier than margins or capital

The quarter was stronger than a year ago, but less clean versus 2Q26: total revenue was flat, diluted EPS fell 4%, pre-tax operating margin declined to 38.5% from 39.8%, and net interest income fell 2% as lower deposit balances more than offset reinvestment at higher yields 8-K. Average deposits decreased 1% sequentially to $311.1 billion 8-K.

Capital also moved down sequentially as BNY returned $1.4 billion to common shareholders through $436 million of dividends and $937 million of repurchases 8-K. CET1 fell to 10.9% from 11.0% and the Tier 1 leverage ratio fell to 5.7% from 5.9%, primarily reflecting capital returned to shareholders and a decline in accumulated other comprehensive income, partly offset by earnings generation 8-K.

What to watch next

  • Whether fee-led growth can re-accelerate relative to expense growth after adjusted pre-tax operating margin slipped sequentially to 38.9% from 39.9% 8-K.

  • Whether deposits and capital ratios stabilize after average deposits fell sequentially and CET1 and Tier 1 leverage both moved lower 8-K8-K8-K.

Sources

Produced by Clarifo Research with the Clarifo financial research engine from the company's public filings. AI was used in parts of the analysis and drafting. Figures are checked automatically against the filings they come from. This is not investment advice.