BNY Profit Skyrockets 21% in Q3 - Client Assets Hit Record $57.8 Trillion Amid Stock Market Boom

Wall Street's quiet giant just flexed its muscles.

BNY Mellon's third-quarter earnings exploded by 21% as raging bull markets propelled client assets to unprecedented heights. The $57.8 trillion milestone represents more wealth than most countries' GDPs combined.

The Institutional Advantage

While retail investors chase meme stocks, institutional players like BNY quietly stack trillons. Their diversified custody and asset servicing model continues printing money regardless of which way markets swing.

Traditional Finance's Last Laugh

As crypto exchanges struggle with regulation and volatility, traditional custody giants keep raking in profits. Maybe there's something to be said for boring, regulated finance after all.

Another quarter, another reminder that the real money moves through channels most retail investors never see. But hey, at least your Robinhood account looks pretty.

BNY increases revenue, invests in efficiency

Total fee revenue reached $3.64 billion, up 7%, driven by stronger client flows, higher market values, and a weaker U.S. dollar that benefited international operations. Investment and other revenue came in at $208 million, helped by disposal gains and other investment profits.

Net interest income surged by 18% to $1.24 billion, supported by the reinvestment of maturing securities into higher-yield assets and balance sheet growth, though changes in deposit mix offset some of the gain.

The bank reported a $7 million benefit from credit losses, driven by a more favorable macroeconomic outlook that outweighed higher reserves linked to commercial real estate exposure. Noninterest expense increased 4% to $3.24 billion, mainly from staff merit raises, investment spending, and a weaker dollar. These expenses were partly offset by efficiency savings, and the effective tax rate for the quarter was 21.3%, said BNY.

BNY’s average deposits reached $299 billion, up 5% year-over-year, while capital levels stayed strong. The Tier 1 leverage ratio held at 6.1%, and the Common Equity Tier 1 (CET1) ratio stood at 11.7%, compared to 11.9% a year ago. The bank returned $1.2 billion to shareholders during the quarter, including $381 million in dividends and $849 million in share repurchases, with a 92% payout ratio year-to-date.

BNY faces lawsuit over Epstein-linked claims

BNY’s assets under custody and administration surged by 11%, while assets under management totaled $2.1 trillion, flat from last year as inflows were offset by outflows.

The earnings report claims that BNY’s liquidity remains stable, with an average liquidity coverage ratio of 112% and a net stable funding ratio of 130%, both exceeding regulatory minimums.

But alongside the strong quarter, BNY did acknowledge that it now faces new legal pressure. A woman identified as Jane Doe filed a lawsuit against BNY and Bank of America, alleging they knowingly provided financial services that enabled Jeffrey Epstein’s sex trafficking operation.

Speaking on CNBC’s Squawk on the Street, Robin said, “We don’t think the suit has any merit, and we’re going to contest it vigorously.” Jane Doe is represented by Boies Schiller and Edwards Henderson, the same firms that previously secured $75 million and $290 million settlements from Deutsche Bank and JPMorgan, respectively, over similar claims.

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