Bank of New York Mellon enjoyed a record quarter at the start of 2025 but remains watchful as the tumult over President Donald Trump's trade policies continues.
In terms of profits, revenue and earnings per share, the first three months of the year marked BNY's best first quarter on record. Net income was $1.15 billion, up 21% from the same period last year. Earnings per share were $1.58, beating analysts' estimates of $1.51, according to S&P. And revenue was $4.79 billion, surpassing expectations and marking a 6% increase from the year-ago period.
Even so, CEO Robin Vince struck a cautious tone in a call with journalists on Friday.
"There's clearly been some signs of optimism at the beginning of the year, but we've now seen a reversal of sentiment, which has been driven by uncertainty," Vince said. "So we now have quite a few things on the minds of market participants."
The CEO said a number of factors contributed to this uncertainty, first and foremost the seesawing tariff policies of the Trump administration. Vince said he sees the flux as part of a long-term negotiation strategy, which means businesses will have to wait a while for the "final picture" to come into focus.
"Last week's tariff announcements were clearly part of a broader strategy to try to reset relations between the U.S. and the rest of the world," he said. "It's our expectation that these negotiations are going to take some time, and this uncertainty will likely have some length to it."
Like other banks, BNY saw its stock take a hit after Trump imposed tariffs on almost all U.S. trading partners. In the two days after the announcement, BNY's stock dropped by
The combination of uncertainty and stock volatility has created challenges for BNY — but also opportunities, Vince said. "At times of uncertainty in markets, we're kind of viewed as a port in a storm," he said. "And so the uncertainty actually attracts people to our platform, because they see us as this sort of rock of stability."
In the first quarter, fee revenue reached $3.4 billion, a 3% increase from last year. Net interest income jumped 11% year over year to $1.16 billion.
BNY's sale of a Toronto-based trust company also boosted first-quarter revenue. BNY sold the business to the Australian stock transfer company Computershare in March. In the first quarter, BNY said it gained $40 million from the sale.
Overall, analysts at Truist called it a "good but not outstanding" quarter for BNY.
"We still like BK stock here for its status as one of the most defensive banks combined with the growth and offense made possible by recent investments," David Smith, head of consumer lending at Truist, wrote in a research note.
With roots dating back to 1784, BNY is one of the oldest banks in the world. But in recent years, it's been betting big on some of the newest financial technologies. In 2022, BNY
That product ran into a regulatory roadblock from the Biden-era Securities and Exchange Commission, which required custodians to
The reversal, which came less than a week after Trump's inauguration, was so sudden that it caused some whiplash during a recent interview with one of BNY's executives. At a conference hosted by UBS in February, Emily Portney, BNY's head of asset servicing, said the bank was proud to be "one of the very few institutions" that can have custody of digital assets.
That prompted a puzzled reaction from the moderator, UBS analyst Brennan Hawken. "I thought that was against the rules," Hawken said.
In the call with reporters on Friday, Vince said crypto regulations are needed to set the "rules of the game," but the particular rule BNY ran up against, SAB 121, "didn't make any sense." The fact that it's now been rescinded, he said, is helpful to BNY as it continues to provide platforms for digital assets.
"There have been some impediments to full participation from a regulatory point of view," Vince said. "We haven't let that stop us."
