BNY Mellon Boosts 2026 Revenue Forecast After Record Q2 Results

BNY Mellon on Wednesday raised its full-year 2026 revenue forecast significantly above Wall Street expectations after reporting record second-quarter results. The bank's performance was bolstered by a surge in interest income and higher fees as rising equity markets increased the value of client assets.

Upgraded Outlook and Record Quarter

The custody bank now anticipates full-year revenue to grow between 10% and 11%, a substantial increase from its previous outlook of approximately 5%. This revised forecast surpasses the average analyst expectation of 7.8% growth, according to estimates compiled by LSEG.

The upgraded guidance follows a record-breaking second quarter, where total revenue jumped 13% year-over-year to $5.7 billion. BNY reported net income applicable to common shareholders of $1.7 billion, or $2.45 per share, for the three months ended June 30. This compares with $1.4 billion, or $1.93 per share, in the same period a year earlier.

Market Tailwinds Boost Performance

BNY's results were fueled by strong performance across its core operations, benefiting from a constructive market environment. The bank's net interest income (NII), the difference between what it earns on assets and pays on liabilities, surged by 20% in the second quarter.

Fee revenue also saw robust growth, rising 11% to $4.04 billion. As a custodian bank, BNY's fee income is closely tied to asset values. The rally in U.S. stocks during the quarter directly contributed to this growth, with the bank's assets under custody and administration climbing 12% to $62.6 trillion and its assets under management increasing 6% to $2.2 trillion.

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Key business segments showed significant strength:

• Asset Servicing revenue rose 12%.
• Issuer Services revenue jumped 23%.

Executive Commentary

CEO Robin Vince told Reuters that the market environment has been favorable. "The fundamental drivers of capital markets have been broadly constructive. Corporate earnings have been resilient," Vince said. He noted that continued strength in corporate earnings could provide further support for market valuations.

The strong performance reflects a wider trend seen this earnings season, where financial institutions are benefiting from buoyant capital markets. Shares of BNY have surged 33% year-to-date, significantly outperforming the S&P 500 benchmark.