July 15 - BNY raised its revenue outlook for 2026 above Wall Street expectations after delivering record quarterly revenue, a result the bank attributed to stronger net interest income, growing fee revenue and higher market valuations that increased client asset balances.
Chief Executive Robin Vince described market conditions as active and constructive for capital markets. "It’s an active period for markets, a lot of things going on," he said. "The fundamental drivers of capital markets have been broadly constructive. Corporate earnings have been resilient."
The bank reported a 20% rise in net interest income - the spread between returns on assets and the cost of liabilities - in the second quarter. Overall revenue climbed 13% to a record $5.7 billion for the quarter, and management raised its forecast for full-year revenue growth to a range of 10% to 11% from a prior outlook of roughly 5%. Analysts were modeling average growth of 7.8%, according to estimates compiled by LSEG.
Markets and client asset values drove fee revenue
BNY said that buoyant equity markets helped lift the value of assets it holds on behalf of clients, expanding the base on which fees are charged and supporting higher transaction revenues as client activity increased. U.S. stocks rallied across the second quarter, with both the S&P 500 and the Nasdaq recording their largest quarterly gains since 2020 amid investor appetite that looked past volatility tied to renewed conflict in the Middle East and AI-related swings in technology names.
The custodian bank’s total fee revenue rose 11% to $4.04 billion in the three months ended June 30. Management attributed the increase to a combination of net new business wins, higher market values and elevated client activity.
Assets under custody and administration expanded 12% during the quarter to $62.6 trillion, while assets under management grew 6% to $2.2 trillion. For custodial businesses, higher asset values translate directly into a larger fee-bearing base, while increased trading generates more transaction-related income.
Business lines: asset servicing and issuer services lead gains
BNY’s asset servicing unit, which safeguards assets and processes settlement and related operational tasks, reported a 12% increase in revenue. The issuer services segment, which supports clients issuing securities and related operational flows, posted a 23% rise.
Those gains reflect the core role custodian banks play in global markets - safeguarding and administering large pools of client assets, executing settlements and moving cash and securities between institutions - activities that generate recurring fee streams as assets and transaction volumes expand.
Profit and stock performance
Net income applicable to common shareholders was $1.7 billion, or $2.45 per share, for the quarter, up from $1.4 billion, or $1.93 per share, a year earlier. Shares of the bank have climbed 33% year-to-date, substantially outperforming the S&P 500 benchmark.
On the outlook for markets, Vince cautioned that the bank remains early in the corporate earnings season. "We’ll see what happens with the rest of this quarter’s corporate earnings, because we’re just at the beginning of that cycle, but if they do come out strong and they are expected to, then that supports valuations in a pretty significant way," he said. "So there’s plenty of room probably under that scenario for the stock market."
What this means for clients and the market
For institutional clients and issuers, the quarter underscores how rising asset valuations and active markets can amplify fee-based revenue for custodial and asset servicing providers. The combination of higher net interest income and greater fee revenue also points to strengthened revenue diversification for the bank in an environment where both rates and equity valuations have contributed to top-line expansion.
BNY’s updated guidance and quarterly metrics will be watched by investors and industry participants for signals about the sustainability of fee growth, the trajectory of net interest income and the degree to which corporate earnings can continue to support elevated market valuations.