- Record Net Income & Revenue Growth BNY reported $5.3B net income and $20.1B revenue, with 8% total revenue growth and 507 bps of positive operating leverage.
- AI Adoption & Strategic Collaborations Launched enterprise AI platform <i>Eliza</i> and partnered with Google Cloud for Gemini Enterprise integration, driving transformational growth.
- Capital Returns & EPS Growth Returned $5B to shareholders via dividends and buybacks, with EPS rising 28% YoY to $7.40 and Q4 EPS up 31% to $2.02.
- Security Services Strength Revenue surged 7% YoY ($2.5B), with 34% ETF assets under custody/administration (AUC/A) growth and 30% pretax income increase.
- Medium-Term Financial Targets Raised pretax margin target to 38% and ROTCE to 28%, alongside 5% revenue growth guidance for 2026 with 5%+ net interest income growth.
Segment Performance
The Security Services segment reported total revenue of $2.5 billion, up 7% year-over-year, driven by an 11% increase in investment services fees. Asset Servicing saw significant growth, with ETF AUC/A rising 34% year-over-year. Markets and Wealth Services reported total revenue of $1.8 billion, up 8% year-over-year, while Investment and Wealth Management reported total revenue of $854 million, down 2% year-over-year. The diverse revenue streams and growth across segments are positives.
Growth Prospects and Guidance
BNY expects 2026 total revenue growth of approximately 5% year-over-year, with net interest income growth slightly ahead of 5% and fees a little lower than 5%. The company has raised its medium-term financial targets, increasing its pretax margin target to 38% and ROTCE target to 28%. The guidance suggests that the company is confident in its ability to continue growing and improving profitability. As Dermot McDonogh noted, the firm aims to outperform these targets, indicating a positive outlook.
Valuation and Dividend Yield
The Price-to-Tangible Book Value (P/TBV) ratio is not directly available, but the P/B Ratio is 0.0, suggesting that the book value might not be a significant concern. However, the Dividend Yield of 1.63% is relatively modest. The EV/EBITDA ratio of 13.16 indicates that the company's enterprise value is reasonable relative to its earnings before interest, taxes, depreciation, and amortization.
Digital Transformation and AI Adoption
BNY is focused on AI adoption and integration, viewing it as a catalyst for transformational change. The company has launched its enterprise AI platform, Eliza, and is collaborating with Google Cloud to integrate Gemini Enterprise capabilities. This strategic focus on technology is expected to drive growth and improve efficiency, potentially leading to higher returns on equity (ROE) in the future, which is currently at 16.97%.