The Bank of New York Mellon (BNY) Q3 2026 Earnings Call: Q&A Summary

Q: Mike Mayo from Wells Fargo Securities asked how AI spending impacts financials and what specific benefits and financial returns are being observed.

A: Robin Vince, CEO, explained that AI is treated as a catalyst for transformational change and capacity generation rather than just an expense item, noting that the firm has over 400 AI solutions in production and is successfully generating returns.

Q: Mike Mayo followed up by asking if there are scale benefits when purchasing tokens at the enterprise level.

A: Robin Vince confirmed that scale helps secure better commercial arrangements through partnerships and allows the firm to use routing logic to choose the right model for each task via the Eliza platform.

Q: Ebrahim Poonawala from Bank of America asked how to think about the benefits of AI regarding internal capacity, client wallet share, and revenue pools.

A: Robin Vince stated that AI impacts all three vectors, starting primarily with internal capacity generation, evolving into product feature improvements, and eventually enabling new client solutions.

Q: Ebrahim Poonawala followed up by asking how the company protects against rogue agents and navigates open-weight versus closed models.

A: Robin Vince explained that safety relies on the sciences of alignment and observability, and the company uses its Eliza chassis and established maker-checker controls to wrap safety around frontier capabilities.

Q: Brennan Hawken from BMO Capital Markets asked how tangible the benefits of the platform operating model will be for unit costs and cross-selling into 2027 and 2028.

A: Dermot McDonogh, CFO, responded that 100% of the firm is now live in the model, which is driving de-siloing, efficiency savings, and contributing to 15 consecutive quarters of year-over-year sales growth.

Q: Brennan Hawken asked about quarter-to-date deposit trends and the drivers behind the higher NII guidance.

A: Dermot McDonogh noted that deposits experienced a seasonal dip in Q3 but are expected to pick up in Q4, while NII is supported by securities rolling off into higher yields of 150 basis points to 200 basis points.

Q: Alex Blostein from Goldman Sachs asked about the near-term and long-term impacts of mandatory treasury clearing.

A: Dermot McDonogh stated that central clearing is not seen as a headwind and is expected to drive more volume onto the platform, supported by strong international growth and debt issuance.

Q: Alex Blostein asked how the company plans to improve net new asset growth in Wealth Solutions and capture business from competitors.

A: Dermot McDonogh highlighted that Wealth Solutions achieved $48 billion of net new assets, representing a 7% annualized growth rate, and signed several new clients and multi-year contracts.

Q: Ken Usdin from Autonomous Research asked if fourth-quarter fee growth implies a sequential decline and whether there are seasonal expense step-ups.

A: Dermot McDonogh replied that there are no outliers expected in Q4, pipelines remain healthy, and typical seasonal expense step-ups are driven by compensation matters and vendor-related items.

Q: An analyst from TD Cowen Securities asked about capital management priorities given strong internal generation and lower regulatory ratios.

A: Dermot McDonogh stated that the Tier 1 leverage ratio remains at the upper end of the 5.5% to 6% range, allowing the firm to absorb mark-to-market impacts and maintain healthy buybacks at an 85% payout ratio.

Q: Glenn Schorr from Evercore ISI asked about the drivers behind the 19% average loan growth and its density.

A: Robin Vince confirmed that loan growth is predominantly in secured finance, featuring short-duration, fully collateralized loans that support the client franchise without excessive risk-weighted assets.

Q: Manan Gosalia from Morgan Stanley asked if the strong 40% year-on-year growth in Issuer Services is sustainable and what drove it.

A: Dermot McDonogh explained that the growth is driven by Corporate Trust debt servicing, depository receipts wins in APAC, and pass-through revenues associated with Trump accounts.

Q: Manan Gosalia asked if noninterest-bearing deposits are expected to remain at high teens as a percentage of deposits.

A: Dermot McDonogh noted that the firm does not guide on specific deposit mixes, but deposit growth aligns with overall client activity and the broader growth of the business.

Q: David Smith from Truist Securities asked how organic fee growth is trending compared to the 4.5% rate seen in the first half of the year.

A: Robin Vince stated that organic growth is viewed as a long-term trend rather than a quarterly guide, noting that momentum from the first half of 2026 has continued without any shock factors in the third quarter.

Q: Glenn Schorr from Evercore ISI asked how Wealth Solutions plans to compete against well-funded new competitors in custody.

A: Dermot McDonogh and Robin Vince emphasized that Wealth Solutions is now tightly integrated with the broader BNY family, offering banking, lending, and AI capabilities alongside traditional custody to serve nearly 1,500 clients.

Q: Steven Chubak from Wolfe Research asked if Securities Services is pivoting toward a growth mindset now that pretax margins have reached 36% and efficiency targets have been met.

A: Robin Vince agreed that foundational efficiency work is largely complete, and the segment is now pivoting to growth, expanding into new regions like Germany and launching digital asset transfer agency capabilities.

Q: Gerard Cassidy from RBC asked what the primary deltas were for the stronger-than-expected net interest income growth achieved this year compared to January expectations.

A: Robin Vince and Dermot McDonogh pointed to higher deposit growth from strong client activity, a stable mix of interest-bearing and noninterest-bearing deposits, and portfolio reinvestment yields increasing from 150 basis points to 200 basis points.

Q: Gerard Cassidy asked what interest rate environment is most ideal for NII moving into 2027.

A: Robin Vince reiterated that the firm aims to narrow the cone of outcomes and remains largely immunized against rate volatility, feeling comfortable with the current rate environment.