Bank of New York Mellon Corporation (NYSE: BK) disclosed its financial performance for the fourth quarter and full year ending 2025, achieving record earnings and expanding its asset base substantially. For the final quarter of 2025, the bank posted diluted earnings per common share of $2.02, surpassing the consensus analyst forecast of $1.98. Adjusted diluted earnings per share reached $2.08, also exceeding expectations.
The bank's total revenue for the fourth quarter stood at $5.179 billion, marking a 7% increase compared to the previous year. This revenue performance outpaced the analyst estimate of $5.136 billion, reflecting a 5% increase in fee revenue to $3.698 billion and a 13% increase in net interest income to $1.346 billion. Net income attributable to common shareholders rose by 26% year-over-year to reach $1.427 billion. The bank maintained a pre-tax operating margin of 36%, demonstrating operational efficiency amid higher revenues.
Key profitability metrics reflected favorable returns, with return on equity (ROE) recorded at 14.5% and return on tangible common equity (ROTCE) measured at 26.6%. These figures indicate effective deployment of equity capital to generate earnings.
Noninterest expenses amounted to $3.360 billion, remaining flat relative to the prior year. When adjusting for $51 million in notable noninterest costs—primarily attributable to severance charges and partially offset by an adjustment to the FDIC special assessment—noninterest expenses showed a 4% increase. The provision for credit losses produced a benefit of $26 million, mainly due to credit quality improvements within the commercial real estate loan portfolio and adjustments to the macroeconomic outlook.
The effective tax rate for the quarter was reported at 20.4%. Net interest margin expanded to 1.38%, reflecting the reinvestment of maturing securities at higher yields and growth of balance sheet assets, although these effects were partially tempered by compression in deposit margins.
Average deposit balances grew 8% year-over-year to $310.482 billion, while average loans advanced 11% to $76.678 billion, signaling steady growth in core funding and lending activities.
Assets under custody and/or administration surged 14% year-over-year to approximately $59.3 trillion. Similarly, assets under management expanded by 7% to $2.2 trillion, indicating strong client asset flows and market appreciation.
The Securities Services segment reported revenue of $2.497 billion, up 7% from the previous year, with a pre-tax operating margin of 34%. Within this segment, Asset Servicing revenue rose 8% to $1.945 billion, while Issuer Services revenue increased by 5% to $552 million. Segment assets under custody and administration grew 14% to $43.0 trillion, accompanied by a 24% rise in the market value of securities on loan to $604 billion.
The Market and Wealth Services segment experienced an 8% revenue increase to $1.805 billion and delivered a 49% pre-tax operating margin. Revenue contributions included a 5% increase in Pershing revenue to $741 million, an 11% rise in Payments and Trade revenue to $524 million, and a 10% gain in Clearance and Collateral Management revenue to $540 million.
Over the full 2025 calendar year, the bank achieved diluted EPS of $7.40 and adjusted diluted EPS of $7.50, reflecting an 8% increase in total revenue to $20.080 billion. Net income attributable to common shareholders increased by 22% to $5.306 billion. The pre-tax operating margin for the year stood at 35%, with ROTCE near 26.1%, underscoring the bank’s sustained profitability.
Capital returned to common shareholders in 2025 totaled $5.0 billion, comprising $1.4 billion in dividend payments and $3.5 billion in share repurchases. This distribution resulted in a 94% payout ratio for the year, demonstrating the institution’s commitment to shareholder returns.
At year-end, the bank reported a Common Equity Tier 1 (CET1) capital ratio of 11.9% and a Tier 1 leverage ratio of 6.0%. Liquidity metrics showed resilience, with an average liquidity coverage ratio of 112% and an average net stable funding ratio of 130%. The company also maintained total loss-absorbing capacity ratios above regulatory minimum requirements, indicating strong capitalization and liquidity management.
Looking ahead to 2026, management projects total revenue between $19.027 billion and $21.029 billion. The midpoint forecast of $20.027 billion suggests approximately 5% year-over-year growth, aligned with analyst estimates of $20.023 billion. This outlook reflects cautious optimism based on current market conditions and the bank's strategic initiatives.
In a statement reflecting on the year's performance, CEO Robin Vince said, "2025 was another successful year for BNY. We delivered record net income of $5.3 billion on record revenue of $20.1 billion and generated an ROTCE of 26%. We are entering 2026 with positive momentum and excited for the work ahead of us to deliver increased value for our clients and shareholders."
In premarket trading following the earnings release, shares of Bank of New York Mellon declined slightly by 0.51% to $120.05. The stock remains near its 52-week high of $122.36 as referenced in recent market data.