The Bank of New York Mellon(US:BK)2025-08-01 11:02Financial Performance - Net income applicable to common shareholders for Q2 2025 was $1,391 million, or $1.93 per diluted share, compared to $1,143 million, or $1.52 per diluted share in Q2 2024, reflecting a significant increase [20]. - Total revenue increased by 9% year-over-year, driven by a 7% increase in fee revenue and a 17% increase in net interest income [25]. - Total revenue for Q2 2025 reached $2.5 billion, an increase of 10% compared to Q2 2024 and 8% compared to Q1 2025 [83]. - Total revenue for year-to-date 2025 reached $4.8 billion, a 9% increase compared to the same period in 2024 [88]. - Total revenue for the second quarter of 2025 was $1.7 billion, a 13% increase compared to the second quarter of 2024 [95]. - Total revenue for year-to-date 2025 was $1.6 billion, a decrease of 5% compared to the same period in 2024 [118]. Assets and Management - Assets under custody and/or administration (AUC/A) reached $55.8 trillion, a 13% increase compared to $49.5 trillion in Q2 2024 [34]. - Assets under management (AUM) totaled $2.1 trillion, reflecting a 3% increase from $2.045 trillion in Q2 2024 [38]. - Total assets reached $438,608 million as of June 30, 2025, compared to $415,844 million in the previous quarter [55]. - Total assets increased to $486 billion as of June 30, 2025, up from $416 billion at December 31, 2024 [135]. - Total deposits increased by 20% to $346.4 billion at June 30, 2025, compared to $289.5 billion at December 31, 2024 [197]. Revenue Streams - Foreign exchange revenue increased by 16% year-over-year, driven by higher transaction volumes and market volatility [39]. - Net interest income rose to $1,203 million in Q2 2025, a 17% increase from $1,030 million in Q2 2024, and a 4% increase from $1,159 million in Q1 2025 [48][49]. - Asset Servicing revenue was $1.9 billion, up 11% year-over-year and 5% quarter-over-quarter, primarily due to higher net interest income and foreign exchange revenue [84]. - Issuer Services revenue increased to $604 million, a 9% rise compared to Q2 2024 and an 18% increase from Q1 2025, mainly attributed to higher Depositary Receipts revenue [85]. - Treasury Services revenue was $490 million, reflecting a 15% increase compared to the second quarter of 2024, driven by higher net interest income [97]. Expenses and Costs - Total noninterest expense increased by 4% compared to the second quarter of 2024, primarily due to higher investments and employee merit increases [60]. - Noninterest expense totaled $1.6 billion, a 4% increase from Q2 2024 and 2% from Q1 2025, influenced by higher investments and employee merit increases [87]. - Noninterest expense for year-to-date 2025 was $3.2 billion, a 4% increase compared to the first six months of 2024, mainly due to higher investments and employee merit increases [89]. - The income tax provision for the second quarter of 2025 was $404 million, with an effective tax rate of 22.0%, compared to $357 million (23.4%) in the second quarter of 2024 [63]. Equity and Returns - Return on common equity (ROE) was 14.7% and return on tangible common equity (ROTCE) was 27.8% for Q2 2025 [26]. - The company returned $1.2 billion to common shareholders, including $895 million in common share repurchases [27]. - The company’s shareholders' equity increased to $43,223 million as of June 30, 2025, compared to $41,542 million in the previous quarter [55]. Credit and Loans - The provision for credit losses was a benefit of $17 million, primarily due to property-specific reserve releases related to commercial real estate exposure [25]. - The allowance for credit losses decreased to $379 million at June 30, 2025, from $401 million at December 31, 2024, with a provision for credit losses of $17 million in the second quarter of 2025 [188][189]. - Total loans at period end were $73.1 billion at June 30, 2025, compared to $71.4 billion at December 31, 2024 [188]. - Margin loan exposure increased to $20.7 billion at June 30, 2025, compared to $19.1 billion at December 31, 2024 [186]. Employment and Efficiency - Full-time employees at the end of the second quarter of 2025 totaled 49,900, a decrease of 4% from 52,000 in the second quarter of 2024 [60]. - Efficiency savings partially offset the increases in noninterest expenses in both quarterly and year-to-date comparisons [60][62]. Market and Economic Factors - The company estimated 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 [74]. - The unfavorable impact of a weaker U.S. dollar was noted as a contributing factor to the increase in noninterest expenses [60].