Bank of New York Mellon Corp Q3 2025 Earnings Call Transcript

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

Question: Mike Mayo - Wells Fargo Securities LLC - Analyst : Hi, My question is how much of this growth year-over-year would you attribute to actions that you've taken versus just a generally good market backdrop? And I recognize that you have one BNY, which is now the new commercial model, recognize that your platform operating model, you said is 70% done and also recognize that you had Eliza 1.0. So you have a lot of initiatives taking place. So I'm sure you can claim some credit but probably not all credit and there's probably going to be a quarter at some point where markets tank and things don't look as good. So how much is due to what you're doing and how much is due to the market?

Question: Mike Mayo - Wells Fargo Securities LLC - Analyst : All right, thank you.

Question: Brennan Hawken - BMO Capital - Analyst : Good morning. Thanks for taking my questions. Dermot, you just touched on this a little bit with the point around M&A escrow business. But we've been in sort of capital markets for a while, and we're starting to see M&A announcements of activity, which generally goes well for securities listing. What early trends have you seen on the back of that? And how should we be thinking about modeling those revenue lines if the capital markets environment remains?

Question: Brennan Hawken - BMO Capital - Analyst : Yes. Sorry about that, Dermot. Securities lending, the securities lending part, like we've seen hard to borrow start to pick up on the back of M&A merger or IPO activity and the like. So I was curious about how we would think about what that impact could be on securities lending going forward.

Question: Brennan Hawken - BMO Capital - Analyst : Got it. I appreciate it. And Dermot, you spoke to the fact that the offboarding, I believe you said was finished. So within Wealth, a couple of questions. DARTS for Pershing was a little soft. Was that -- it looked a little bit more pronounced than typical summer slowdown. So maybe if there was any color around that. And then you also landed a nice Wove win recently with the TIAA Wealth Management business. I'm certainly familiar with TIAA Asset Management business, but could you help us understand the size of the Wealth business and what we could expect from that?

Question: David Smith - Truist Securities - Analyst : Hey, good morning. You mentioned some potential turbulence and headwinds to the money market ecosystem coming up right now with the rise of stable coins on the one hand, coming amidst the backdrop of falling rates, do you think either of these could put pressure on fee rates because this is an area of the fund space that's seeing less pressure than equities and fixed income over the last decade or two? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 16, 2025 / 11:30AM, BK.N - Q3 2025 Bank of New York Mellon Corp Earnings Call

Question: David Smith - Truist Securities - Analyst : Thank you. And then, Dermot, I think you said that almost half of the servicing wins in the quarter were multiline business solutions. Can you help us frame how that compares to 2024 to the first half of this year?

Question: David Smith - Truist Securities - Analyst : Just directionally, would you say it's somewhat higher or a lot higher? It's hard to really put a frame on it. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 16, 2025 / 11:30AM, BK.N - Q3 2025 Bank of New York Mellon Corp Earnings Call

Question: David Smith - Truist Securities - Analyst : Thank you.

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Thank you. Hey, Robin, good morning. I wanted to ask you guys about operating leverage over time. Obviously, really strong progress this year, continued in the third quarter, and obviously acknowledge the fact that margin expansion is both a function of revenues and expense controls and efficiencies. But as you look out and you sort of point into a lot of the efficiency gains from the platforms will come through towards maybe the end of '27 and 2028 plus you've got the variety of AI efficiencies underway as well. So as you think about firmwide margin in this kind of mid-30s year-to-date and as you think about the forward opportunity set, what do you guys think this could land understanding that you might not want to set a firm target on this call, but helpful just to kind of hear your thoughts on how you would frame that.

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Great. That's very helpful. My second or the follow-up question rather just a cleanup around NII. I believe in the past, you guys sort of talked about that the -- internally, you're sort of trying to focus on '26 and trying to neutralize the balance sheet to sort of headwinds from lower interest rates. Just curious if that's still the case. And if you think about Q4 guide, is that a reasonable jumping off point for NII for all of 2026, again, assuming you guys can succeed at keeping them roughly flat?

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Awesome. Thanks so much.

Question: Kenneth Usdin - Autonomous Research - Analyst : Hey guys, how are you doing? Good morning. I just wanted to ask, it's more of a longer-term question. But obviously, so many announcements out of the crypto and the stable coin space in terms of new products and new offerings from both BNY and the industry. And just wondering how you're starting to think about what's the TAM there from a revenue perspective for BNY? Like what is the opportunity set? We see it in terms of the notionals out there in the marketplace. But how does that convert into revenue for BK, where would you expect it to come through? And is there any perspective on like how quickly -- when that starts to show? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 16, 2025 / 11:30AM, BK.N - Q3 2025 Bank of New York Mellon Corp Earnings Call

Question: Kenneth Usdin - Autonomous Research - Analyst : Okay. Got it. All right. And then a follow-up on the expense side, Alex asked earlier about operating leverage. I just want to confirm, so like 3% full

Question: Kenneth Usdin - Autonomous Research - Analyst : Thanks.

Question: Ebrahim Poonawala - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Good morning. I just had a couple of follow-up questions, Robin. I think going back to the digital assets piece appreciating still early days. But would you say if the move towards on chain tokenization picks up, is it disruptive from revenue margins for BK accretive or just a client retention tool where you are more likely to retain the clients who want to move? I'm just wondering in that spectrum, is it a bigger risk factor? Or is there a tangible revenue opportunity tied to this?

Question: Ebrahim Poonawala - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Got it. That's helpful. And I guess just a separate question. Very narrowly on how you're thinking about share buybacks, I mean, it's an asset-like model do you care about the dilution buybacks have on book value at these levels? Or is any of -- sort of when you think about just from a valuation perspective, is that influencing your appetite for buying back stock? Or is it still relatively unchanged today versus a year ago?

Question: Ebrahim Poonawala - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Very clear. Thank you both. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 16, 2025 / 11:30AM, BK.N - Q3 2025 Bank of New York Mellon Corp Earnings Call

Question: Betsy Graseck - Morgan Stanley - Analyst : Hi, good morning.

Question: Betsy Graseck - Morgan Stanley - Analyst : Hello, can you hear me? Okay. So Robin, is that because like how many more years of positive operating leverage do you anticipate you're going to be able to deliver here? Maybe that's part of what you're seeing in outlook for the stock price versus what the market is seeing. And so that would be helpful to understand, especially given the fact that part of your operating leverage has been delivered by headcount reduction. And clearly, at this pace can't go on forever, obviously. So a little bit of color would be helpful.

Question: Betsy Graseck - Morgan Stanley - Analyst : And then just a follow-up question here is on stablecoin. Do you plan on issuing a BNY stablecoin?

Question: Betsy Graseck - Morgan Stanley - Analyst : Okay. So if there is an opportunity for a BNY specific stablecoin, you execute on it, but if not, no?

Question: Betsy Graseck - Morgan Stanley - Analyst : Thank you.

Question: Gerard Cassidy - Rbc Capital Markets - Analyst : Hi, Robin. Hi, Dermot. Robin, you talked about the business wins on TIAA, CREF, and then Franklin Templeton. Can you share with us since there was such long-term relationships, was it more cross-selling because of the new policy or the new structure you have is showing success and that's REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 16, 2025 / 11:30AM, BK.N - Q3 2025 Bank of New York Mellon Corp Earnings Call why you made those wins? Or was it new products that they had to -- they've created and they came to you to help offer those products to their customers with you as a partner?

Question: Gerard Cassidy - Rbc Capital Markets - Analyst : On what you just said, have you guys created a scorecard with your top 100 or top 200 clients and where you are in that journey of giving them those -- all those different options. And as part of that answer, when -- what percentage of those clients are at an optimal mix where you -- where they really are firing on all 8 cylinders?

Question: Gerard Cassidy - Rbc Capital Markets - Analyst : No, it is. And then just last question. Obviously, you guys have plenty of excess capital. Dermot, you talked about the returning 90% to 100% of earnings in buybacks and dividends. I think in 2024, you announced the Archer deal. What about inorganic opportunities? Is there any area within your organization that you'd like to enhance with possibly an acquisition? Thank you.

Question: Gerard Cassidy - Rbc Capital Markets - Analyst : Thank you.