BNY Assets Growth Strengthens Case for Market Optimism

Typically, when economists parse banks’ quarterly earnings, they’re looking for clues to consumer health: How much are customers saving? Can they keep up with their credit card payments?

But BNY Mellon isn’t an ordinary bank, and its earnings report yesterday offered a higher-level view of the economy — financial markets in particular.

Founded in 1784 by Alexander Hamilton, BNY isn’t a retail bank offering loans and deposit accounts to consumers. Instead, it’s a bank for banks, holding and safeguarding financial assets for institutional investors. One of the largest global custodians, BNY says it works with 92% of the Fortune 100 companies, 94% of the top 100 investment managers worldwide, 95% of the S&P top 100 banks worldwide, 94% of the top 100 largest US retirement funds and 98% of the top 50 life/health insurance companies. In other words, it’s so intertwined in the financial market that its earnings report can’t help but reflect broader market and economic trends. 

The Room Where It Happens

A key metric for analyzing BNY’s earnings is assets under custody and/or administration (AUC/A), which show just how much the bank custodies for asset managers, hedge funds and other large investors. As of the latest earnings results, that figure is a whopping $59.3 trillion, up 3% from the previous quarter and 14% from the same time last year. 

The increase primarily reflected “client inflows, higher market values and the favorable impact of the weaker US dollar,” according to a company statement. Investors put their money to work last year, with the S&P 500 closing out 2025 with a 16% gain while the Morningstar US Core Bond Index ended the year with a 7.12% gain, its highest since 2020. 

BNY also saw boosts in fee revenue and interest income, helping the company to beat analyst expectations, and offered its 2026 outlook: 

• Fee revenue, which provides insight into activity from key institutional investors, increased 5% year-over-year to $3.7 billion, indicating higher client activity. Net interest income jumped 13% from the fourth quarter of the previous year, reflecting continued reinvestment of maturing securities at higher yields and balance sheet growth, partially offset by deposit margin compression. 
• The bank increased its medium-term targets for pretax margin and return on tangible common equity. Analysts at Truist wrote in a note Tuesday morning that there may be some disappointment that BNY’s outlook was not more ambitious, though they would see any weakness in the shares as a buying opportunity. 

Fed Fight: BNY CEO Robin Vince joined JPMorgan Chase CEO Jamie Dimon in voicing support for the Federal Reserve’s independence amid President Trump’s attacks against Fed Chair Jerome Powell. Vince called the White House’s pressure on the Fed “counterproductive” to improving affordability, The Wall Street Journal reported. He also said Fed independence provides a critical underpinning of the bond market, and so “shaking at the foundation of it doesn’t seem to be to us accomplishing the administration’s primary objectives.”