Bank of New York Mellon Corp at Goldman Sachs U.S. Financial Services Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Great, well, let's unpack some of this starting maybe with your first point really around creating this One BNY commercial model, what is showing up ultimately in better top-line growth. You guys started to break out and really highlight organic revenue growth. I think it was running at around 4%-ish in the first half of the year. Talk to us a little bit about, aspirations there. I know you don't have an official target for sort of fee growth, but if you think about areas where some of these initiatives could become most needle moving and where you hope to get that number to overtime, that would be helpful.

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Yeah. We'll dig into some of the individual areas of organic growth in a second, but I did want to ask you about inorganic. You guys have not been particularly active, but there is no shortage of headlines this year surrounding some of the M&A speculation out there. Talk to us a little bit about where M&A ranks in your priority list as you look out and the growth of the business over the next few years, including maybe some of the largest scale deals.

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : --showing up (multiple speakers)--

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Got it. Okay, let's pivot back and talk about some of the organic growth opportunities you see in the business. Starting really with the asset servicing and the traditional quote-unquote, the trust businesses and acknowledging that you guys are obviously a lot more than that and you and I have talked plenty about that and I think the market gets that as well. But when I look at the servicing business for you guys, it's still the largest fee pool out of all the individual businesses and it's been growing really nicely. I think you guys are on track to deliver the fastest growth there and so they're almost the last 10 years. And while some of that is probably helped by some of the macro factors, right, like volatility in fixed income markets has been probably pretty helpful, but talk to us a little bit more about where you're seeing the incremental share gains, how sustainable do you think the level of fee growth is in that business and what are the opportunities to take market share even higher there.

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Yeah, well, let's talk about the digital asset part of the business for a couple of minutes here. BNY is positioning itself to be sort of the bridge, I guess, between the traditional finances sort of the rapidly-evolving digital ecosystems, the way you guys LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 1:00PM, BK.N - Bank of New York Mellon Corp at Goldman Sachs U.S. Financial Services Conference sort of described it. Obviously, you were early in the crypto custody offering, and there are other things on the com you guys are obviously doing the tokenized money market fund with Goldman. You rolled out Dreyfus stable coin reserve fund, so there's plenty to do there. But when you zoom out, what do you think the tokenized asset ecosystem looks like 2 to 3 years from now, so not going 10 years out, but also not asking you to call the next quarter. And what role do you guys see yourself playing in that? And maybe ask a third question related to that, commercial model around it. When does it actually start to move the needle in a more material way to the P&L?

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Do you see that also driving some of the more traditional business in other ways, saying if you look at some of the larger asset managers and how they're planning to evolve their business models and perhaps tokenize some of their assets in terms of what they're offering to their clients, having those capabilities will be critical. Therefore, there's only a few places they can go to and kind of (multiple speakers)--

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Yeah, just maybe as a quick follow-up to that. One of the benefits of digital ecosystem is perhaps more efficiency, therefore less frictional cash, less collateral in the system, perhaps, et cetera. You guys are at the end of the day also a big depository institution, so you like deposits, you need deposits. So if the outcome of all of this is less sort of frictional cash, how do you think about that as a risk?

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Okay, helpful. Okay, let's talk about Pershing. You mentioned that, in some of your earlier remarks as well. It's another large business for the firm. It's been facing several structural tailwinds obviously for quite some time, and that's been helpful. Recent growth has been a little slower for some of the attrition-related issues. There's some consolidation space. Are we largely through that? How are you thinking about that business into the '26?

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Yeah. So more of that One BNY.

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : You mentioned, investment and wealth management business a number of times, so it's probably worthwhile spending a couple of minutes on this. So out of all the businesses that you have, that's the one obviously that's faced some organic growth challenges, and probably more so on the investment management side as opposed to the wealth side. When I think about some of the structural headwinds for a lot of the traditional asset managers, which is, most of that business for you guys, they've been around for a while and it's not easy to fix. So when you think about opportunities to improve organic growth in that business, what does that look like? What's within your control that could turn that around?

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : All right, let's pivot to expenses and margins for the firm as a whole, that's been another really great part of the story as you're well aware for the last couple years. I think you guys are on track to deliver 35%-plus pre-tax margins this year. Already well ahead of the 33%-plus target that you've set out, frankly not that long ago. Recognizing that incremental margin expansion is going to be a function of both revenue growth and expense discipline, right, those two things obviously kind of have to go LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 1:00PM, BK.N - Bank of New York Mellon Corp at Goldman Sachs U.S. Financial Services Conference hand in hand. Talk to us a little bit of how you frame maybe the multi-year expense trajectory for the business and where do you think the margins could ultimately settle out to be in a steady state.

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Got it. Okay, so more to go, I guess on that front is the short answer.

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Great. Okay, so maybe, at this point we'll pivot a bit and talk about some of the financial dynamics as we get closer to quarter end here. Maybe first, give us a bit of an update for Q4. Your guidance previously implied that Q4 NII was going to be, I think, flattish versus to Q3. You also gave a little bit of color on expenses and fees, so anything else you're willing to share as far as Q4, that'll be helpful.

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Good news. Fees and expenses, anything on that front.

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Is that in the 3.5 million -- 3.5% quarter to quarter increase in expenses or is that pulled out of that?

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : That's pulled out. So that's on top of. Got it.

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : And just another follow-up when you talk about mid-single-digit growth in total revenues, you're talking about Q4 of this year versus Q4 of last year.

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Yeah, okay, got you, great. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 1:00PM, BK.N - Bank of New York Mellon Corp at Goldman Sachs U.S. Financial Services Conference When you mentioned NII up sequentially mid-single-digits, obviously good news there. It sounds like deposits are the driver. Can you just help delineate how much of that is some of the seasonality we tend to typically see in the business in the fourth quarter versus more of the regular way organic growth and some of the benefits of the initiatives you put into place where those deposits might actually end up being somewhat sticky.

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Great, super helpful. Maybe in the last minute or so, touch on capital returns as well. That's been a really important part of the growth algorithm for the business as you look further out, obviously the capital ratios remain quite healthy. Should we be thinking about a similar pace of sort of about 100% payout for the firm in the '26 as well. Are there other uses of capital that you see on the forward?

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Great. All right, more of the same. We're like that. Appreciate your time. Always great to see you. Thank you for spending time with us today. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 1:00PM, BK.N - Bank of New York Mellon Corp at Goldman Sachs U.S. Financial Services Conference