Core Insights - Cboe Global Markets has made significant progress in developing its Securities Financing Transactions (SFT) clearing service, with BNY acting as the first Agent Lender, targeting UCITS clients [1][2] - The new title transfer model with a pledge-back feature allows UCITS and other beneficial owner lenders to access centrally cleared SFTs without posting margin or contributing to the CCP's default fund, enhancing market liquidity and efficiency [1][2] - The collaboration aims to drive market innovation, transparency, and resilience, while also optimizing collateral efficiency and empowering UCITS participants [2] Group 1 - Cboe Clear Europe has launched a centrally cleared triparty model for UCITS-compliant clearing, transforming the traditional bilateral process for SFTs in European equities and ETFs [2] - The introduction of central clearing to SFTs offers substantial capital optimization opportunities, including reductions in Risk-Weighted Assets (RWA) for certain clearing participants [2] - Cboe Clear Europe plans to expand its SFT clearing service to cover other lendable securities and new jurisdictions within the next year [2][3] Group 2 - The integration of BNY as a Tri-Party Collateral Agent enhances collateral efficiency and liquidity through Cboe's Global Collateral Platform [2] - The scalable technology platform of Cboe Clear Europe is designed to empower participants and strengthen the securities lending market infrastructure [3] - Cboe Global Markets provides trading, clearing, and investment solutions across various asset classes, including equities, derivatives, and FX in multiple regions [4]

Core Viewpoint - Bank of America and Bank of New York Mellon are seeking to dismiss lawsuits that allege they knowingly assisted Jeffrey Epstein's sex trafficking operations by providing banking services to him [1] Group 1 - The lawsuits claim that the banks had knowledge of Epstein's illegal activities and continued to provide him with banking services [1] - The banks argue that they did not have sufficient information to be aware of Epstein's alleged criminal conduct [1] - The legal actions highlight the ongoing scrutiny financial institutions face regarding their relationships with high-profile individuals involved in criminal activities [1]

Core Insights - Bank of New York Mellon (BK) has seen its IBD SmartSelect Composite Rating increase to 96, up from 94 the previous day, indicating strong performance in the stock market [2][5]. Company Performance - The stock price of Bank of New York Mellon is currently at $111.31, with a slight increase of $0.35 or 0.32% [2]. - The stock has a flat base pattern with a buy point at $110.87 and early entry at $110.19, suggesting potential for upward movement [2]. Market Context - Despite market uncertainty, Bank of New York Mellon is among stocks that have reached new highs, reflecting resilience in its performance [5]. - The company is highlighted in the context of broader market dynamics, with mentions of other financial institutions like JPMorgan and Morgan Stanley facing challenges [5].

Core Points - The Bank of New York Mellon Corporation (BNY) will have its CEO, Robin Vince, speaking at the Goldman Sachs Financial Services Conference on December 10, 2025 [1] - A live webcast of the conference will be available on BNY's website, with an archived version accessible for 24 hours after the event until January 9, 2026 [2] - BNY oversees $57.8 trillion in assets under custody and/or administration and $2.1 trillion in assets under management as of September 30, 2025 [2] Company Overview - BNY is a global financial services company that has been operational for over 240 years, assisting clients in managing, moving, and safeguarding their money [2] - The company serves over 90% of Fortune 100 companies and nearly all of the top 100 banks globally, as well as supporting governments and pension plans [2][3] - BNY has received recognition as one of Fortune's World's Most Admired Companies and Fast Company's Best Workplaces for Innovators [3] Recent Developments - BNY has decreased its Prime Lending Rate by 0.25%, from 7.25% to 7.00%, effective October 30, 2025 [5]

Core Insights - The US ETF industry has reached a significant milestone of $13 trillion in assets, up from $5 trillion less than five years ago, indicating robust growth in the sector [2] - Active ETFs have also crossed $1 trillion in total assets under management, marking another record year for inflows [3][10] - Taxable bond active ETFs are leading in flows this year, with $110 billion in inflows, driven by a combination of effective active management and a surge in new product offerings [8][10] ETF Market Dynamics - Despite market volatility, ETF flows remain stable due to a diverse range of options available, including Treasury bill ETFs and inverse ETFs, which serve as trading tools [5][6] - The adoption of active ETFs has increased significantly, with over 600 active ETFs launched this year alone, reflecting a shift in investor preferences [9][10] - Tax efficiency is a primary driver for the adoption of active ETFs, with only 8% of active ETFs paying capital gains compared to 45% of mutual funds [11][12] Fixed Income ETFs - The ultrashort bond category is gaining traction as a risk-off strategy, appealing to investors seeking liquidity and stability [14] - Core plus and broader core active fixed income ETFs are also attracting interest, indicating a cautious outlook in the current rate environment [15] - The derivative income category has seen significant growth, with 85 new ETFs launched this year, designed to enhance income through underlying stock portfolios and options [16][17]

Financial Performance - Net income applicable to common shareholders for Q3 2025 was $1.34 billion, or $1.88 per diluted share, compared to $1.11 billion, or $1.50 per diluted share in Q3 2024, reflecting a notable increase [20]. - Total revenue increased by 9% year-over-year, driven by a 7% increase in fee revenue and an 18% increase in net interest income [24]. - Total revenue for Q3 2025 was $2.5 billion, an 11% increase year-over-year but a 1% decrease from Q2 2025 [81]. - Year-to-date 2025 total revenue was $7.2 billion, a 10% increase compared to the same period in 2024 [87]. - Year-to-date 2025 total revenue was $5.2 billion, a 13% increase compared to the same period in 2024 [99]. - Total revenue for year-to-date 2025 was $2.4 billion, a decrease of 4% compared to the same period in 2024 [113]. Assets and Liabilities - Total assets increased to $455 billion as of September 30, 2025, up from $416 billion at December 31, 2024 [130]. - Total liabilities amounted to $393,023 million as of September 30, 2025, with total shareholders' equity at $43,974 million [53]. - Total available funds were $164 billion, representing 36% of total assets as of September 30, 2025 [132]. - Total deposits increased by 9% to $314.7 billion as of September 30, 2025, compared to $289.5 billion at December 31, 2024 [194]. Revenue Breakdown - Asset Servicing revenue was $1.9 billion, up 11% from Q3 2024 and 2% from Q2 2025, primarily due to higher client activity and market values [82]. - Issuer Services revenue totaled $544 million, a 10% increase from Q3 2024 but a 10% decrease from Q2 2025, reflecting higher Depositary Receipts revenue [83]. - Treasury Services revenue increased to $510 million, reflecting a 20% rise year-over-year and a 4% increase quarter-over-quarter [96]. - Investment Management revenue was $546 million, down 4% year-over-year and up 3% sequentially [110]. - Wealth Management revenue reached $278 million, decreasing 1% compared to Q3 2024 and increasing 3% from Q2 2025 [110]. Expenses - Noninterest expense increased by 4%, attributed to higher investments and employee merit increases, partially offset by efficiency savings [25]. - Noninterest expense for Q3 2025 was $1.7 billion, a 6% increase compared to Q3 2024 and a 2% increase from Q2 2025, driven by higher investments and severance expenses [85]. - Year-to-date noninterest expense for 2025 increased by 4% compared to the first nine months of 2024, totaling $9,694 million, driven by higher investments and adjustments to the FDIC special assessment [60]. - Noninterest expense decreased by 4% to $2.0 billion, driven by lower revenue-related expenses and efficiency savings [114]. Credit and Loans - The allowance for credit losses decreased to $368 million at Sept. 30, 2025, from $392 million at Dec. 31, 2024, with a provision for credit losses of $7 million in Q3 2025 [186]. - The allowance for loan losses as a percentage of total loans was 0.36% at Sept. 30, 2025, down from 0.41% at Dec. 31, 2024 [185]. - Net long-term strategy outflows totaled $33 billion in Q3 2025, primarily driven by liability-driven investments, equity, and index investments [108]. - Average loans for Q3 2025 were $46.3 billion, a 5% increase compared to Q2 2025 [95]. Market and Economic Factors - The effective tax rate for Q3 2025 was 21.3% [25]. - The company expects that a 5% change in global equity markets would impact fee revenue by less than 1% and diluted earnings per share by $0.05 to $0.08 [72]. - The company experienced a favorable impact from higher market values and a weaker U.S. dollar, partially offsetting revenue declines [110]. Employee and Operational Metrics - Full-time employees at period-end decreased to 49,200 in Q3 2025, down 6% from 52,600 in Q3 2024 [57]. - The company recorded a 10% increase in software and equipment expenses year-to-date, totaling $1,582 million compared to $1,442 million in the previous year [57].

Core Insights - AI is expected to significantly enhance productivity in the banking sector, but banks must adapt their operations to fully leverage this technology [3][6] - The concept of agentic AI is highlighted as a transformative force, with major banks investing in AI workflows to improve efficiency [4][5] Industry Trends - A collaborative model is anticipated, where one human employee will oversee 20 to 30 AI agents managing complex workflows autonomously [5] - BNY has implemented 117 agentic AI tools to optimize various operational aspects [5] Financial Implications - AI could lead to net cost reductions of up to 20% for banks as it becomes more widely adopted [7] - The banking sector's net income reached $1.2 trillion in 2024, the highest among all industries, yet its valuation lags behind other sectors by approximately 70% [7] Challenges Ahead - Despite the potential for productivity gains, the banking industry faces challenges from AI advancements, increased competition from fintechs, and changing customer expectations [7]

Core Viewpoint - The lack of data will make it difficult to predict the Federal Reserve's actions in six weeks [1] Group 1 - John Velis, a macro strategist at BNY Mellon, emphasizes the uncertainty surrounding the Federal Reserve's future decisions due to insufficient data [1]

Core Insights - BNY Mellon is expanding its blockchain-based asset tokenization strategy by launching a collateralized loan obligation (CLO) fund, marking a significant step in integrating traditional financial products with blockchain technology [1][2] Group 1: Tokenization Strategy - The Securitize Tokenized AAA CLO Fund will provide institutional investors access to AAA-rated floating-rate CLOs on the Ethereum network, with BNY Mellon acting as custodian and its subsidiary, Insight Investment, managing the portfolio [2] - BNY Mellon's approach reflects a deliberate sequencing strategy, having previously partnered with Goldman Sachs to launch tokenized money market funds, indicating a methodical progression from simpler to more complex financial instruments [3] Group 2: Market Context - The CLO market, valued at $1.3 trillion, involves bundling corporate loans into tranches with varying risk profiles, requiring sophisticated monitoring of loan performance and credit quality metrics [5] - The transition from money market funds to CLOs demonstrates BNY Mellon's confidence in managing more complex tokenized structures while maintaining compliance and custody standards expected by regulators and investors [6]

Core Insights - Securitize is in the process of going public through a blank-check company initiated by Cantor Fitzgerald [1] - The company has partnered with Bank of New York Mellon to bring collateralized loan obligations (CLOs) onto the blockchain [1] - The Securitize Tokenized AAA CLO Fund will focus on CLOs with high credit ratings and will utilize the Ethereum blockchain for token representation, with BNY acting as the custodian for the assets [1]