The Bank of New York Mellon Corporation

Good morning and welcome to the 2025 Fourth Quarter Earnings Conference Call hosted by BNY. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. Please note that this conference call and webcast will be recorded and will consist of copyrighted material. You may not record or rebroadcast these materials without BNY's consent. I will now turn the call over to Marius Merz, BNY Head of Investor Relations. Please go ahead.

Thank you, Operator. Good morning, everyone, and welcome to our fourth quarter earnings call. I'm here with Robin Vince, our CEO, and Dermot McDonough, our CFO. As always, we will reference our quarterly update presentation, which can be found on the Investor Relations page of our website at bny.com. And I'll note that our remarks will contain forward-looking statements and non-GAAP measures. Actual results may differ materially from those projected in the forward-looking statements. Information about these statements and non-GAAP measures is available in the earnings press release, financial supplement, and quarterly update presentation, all of which can be found on the investor relations page of our website. Forward-looking statements made on this call speak only as of today, January 13, 2026, and will not be updated. With that, I will turn it over to Robin.

Thanks, Marius. Good morning, everyone, and thank you for joining us. I'll begin with a strategic update, and then Dermot will take you through our financial performance in the fourth quarter, our outlook for 2026, and our increased targets for the medium term as we look ahead toward the next phase on our journey to unlock BNY's full potential over the long term. Starting on page three of our quarterly update presentation, 2025 was another successful year for BNY. In short, we delivered record net income of $5.3 billion on record revenue of $20.1 billion and generated a return on tangible common equity of 26%. Total revenue grew by 8% year over year, In combination with expense growth of 3%, we drove 507 basis points of positive operating leverage on a reported basis and 411 basis points excluding notable items, resulting in an improved pre-tax margin of 35%. Consistent execution delivered four consecutive quarters of positive operating leverage in 2025, bringing us to consecutive quarters overall. Taken together, we grew earnings per share by 28% year-over-year to $7.40 and returned $5 billion of capital to our shareholders through common dividends and share repurchases. This strong financial performance was the output of our work to reimagine BNY. and was enabled by tangible progress across strategic priorities over the past year, which we highlight in the four boxes on slide four. First, our commercial model is working. Operating as one BNY, we are starting to bring the full breadth of the company together to deliver more products and services to meet our clients' needs. This includes embedding sales practices and behaviors that enable our teams to deliver more and better for clients with greater consistency to drive deeper relationships with existing clients and open the door to new ones. We achieved record sales performance for the year, and we announced several noteworthy wins in the fourth quarter, further deepening our relationship WisdomTree selected BNY as their banking as a service provider for the WisdomTree Prime platform. This solution brings together banking, payments, custody, and digital assets to support the growth of WisdomTree's new retail distribution model and its strategy on being a leading digital asset forward investment manager. Jupiter, an active asset manager, selected BNY for a suite of capabilities from front to back, from investment operations and data management all the way through to custody, streamlining their operating platform and positioning them for the future. And Japan's Government Pension Investment Fund selected BNY to deliver integrated data and analytics for private markets. This solution aims to help them manage complexity, enhance transparency, and improve decision-making across their growing alternative investments portfolio. Second, we continued to make progress in unlocking the scale and growth potential of our platforms by transitioning approximately half of our people into the platforms operating model over the course of 2025, which brings us to more than 70% of our people working in the model today. This initiative has been a core component of rewiring BNY to make us more agile and intentional in how we deliver to clients, but forms part of a larger collection of initiatives that are at the heart of running our company in a fundamentally different way. Third, in 2025, we made significant advances in the adoption of AI, underscoring our industry leadership in this burgeoning space. Built upon very deliberate investments over the past several years, our enterprise AI platform ELIZA is unlocking capacity for our people, allowing them to focus on higher value work for our clients. We recently announced a collaboration with Google Cloud to integrate Gemini Enterprise capabilities into our ELIZA platform. enhancing our ability to support deep research, analysis, and data-intensive workflows across the company, building on existing collaborations with OpenAI and others. These collaborations underscore our commitment to deploying AI responsibly and at scale. We expect that over time, AI will allow us to remake many of our processes and systems in new and exciting ways, and that together with embedding AI in our products and services represents a significant opportunity for our company in the years ahead. Fourth, BNY has a rich 241-year history of innovation, from issuing the first loan to the US government to becoming the first US G-SIB to offer digital asset custody. Our focus on innovating new products and solutions is centered on building trusted market infrastructure for the long term and serving our clients in new and evolving ways, including increasing delivery of new capabilities connecting the traditional and digital asset worlds. This past quarter, for example, we launched the Dreifer Stablecoin Reserves Fund, a government money market fund designed to support stablecoin issuers and institutional participants to manage eligible reserve assets. providing BNY's cash and liquidity solutions expertise to the growing digital payments ecosystem. Our recently announced tokenized AAA CLO strategy, in partnership with Securitize, brings high-rated structured credit product onto the blockchain, with BNY serving as sub-advisor and custodian of the underlying assets. And just last week, we announced that we have taken the first step in our strategy to tokenize deposits by enabling the on-chain mirrored representation of client deposit balances on our digital assets platform. As we reflect on the scope of our market-leading businesses, our central position as a provider of financial market infrastructure, and the depth and breadth of our client relationships, traditional and digitally native, we believe that we are particularly well positioned to advance the future of financial markets. From the very beginning of our work three years ago, we have taken a long-term view toward unlocking BNY's full opportunity as a financial services platforms company with a commitment to disciplined execution and sustained value creation for our clients and shareholders over time. I'm going to touch briefly on some of the work that has brought us here described on page five of our presentation. Two years ago, we communicated our strategic roadmap and a set of medium-term financial targets for what we viewed as the first foundation-setting phase in a multi-year transformation of BNY. While there are elements of that work that will continue well into the future, we consider that this is the right moment to begin to turn the page toward our next phase. But before we get to that, I'll take the opportunity to reflect on our efforts, the impact that we've seen across our businesses and operations, and how this has started to translate into improved financial performance. As we embarked on the journey, we recognized early on that we had to work across several fronts at the same time. simplifying how we operate, improving execution, and delivering for our clients, and that how we did it as a team was essential to creating deep and enduring change. Thorough strategic and financial business reviews demonstrated to us the powerful combination of capabilities within BNY. We are the number one custodian in the world and the number one collateral manager. the leading provider of issuer services and the primary settlement agent for U.S. government securities. We operate a top-tier payments and liquidity franchise and offer our clients leading investments and wealth capabilities. Individually, these are market-leading businesses. Together, they represent a set of highly adjacent financial services platforms operating at the center of global financial markets. difficult to replicate at scale, and increasingly valuable to our clients. To organize the company around execution, we deliberately framed our work across three simple elements of strategy, which we continue to focus on. The first was clients, to be more for them, to deliver more of our existing products to our existing clients, to add new clients, to add new products, and to meet clients where they are with solutions tailored to their needs and responsive to market trends and opportunities. The second was on how we run our company. We knew we could do that better, simplifying, improving financial discipline, breaking down barriers, challenging the status quo, and reimagining our operating model as a platforms company. The third was culture. Simple to say, hard to do, but magical when it works. A collective sense of ownership, teamwork, and accountability all coming together to bring the other two key strategic pillars to life. This spirit of ownership and accountability is at the heart of our delivery. So it was important to us to build credibility and momentum through consistent execution toward better business and operational performance, some examples of which you can see on slide six. What has been and continues to be the single most compelling growth opportunity for BNY is doing more business with our existing clients. In 2024, we launched our new commercial model, designed to encourage our sales and service teams to raise their ambition, equip them with new tools, and to enable our people to deliver solutions from across BNY, leveraging the full breadth of our platforms. Over the last two years, the number of clients buying three or more of our services increased by more than 60%, and organic fee growth has climbed to 3%, reflecting good progress with even greater opportunity ahead. In combination with stronger organic growth, we took steady, deliberate actions to reduce sensitivity to interest rates, driving more resilient, top-line revenue growth in a range of macroeconomic environments. At the same time, our ongoing transition and increasing maturity in the platform's operating model is reducing friction and driving further productivity improvements. For example, Investments in digitization and automation have meaningfully lowered the unit cost for processes like striking a NAV and settling a trade. And our people are building innovative AI solutions that we expect over time will have a meaningful impact across the company. We're proud that in 2025 alone, we deployed over 130 digital employees, industry-leading, multi-agentic AI capabilities. our digital employees work alongside our people, supporting them with tasks like validating payment details and remediating code vulnerabilities, allowing teams to focus on higher value work and client outcomes. Taken together, these metrics give glimpses into the how of our execution, milestones and examples, not endpoints, but helpful indicators that our strategy is working. and that there continues to be meaningful opportunity ahead. Turning to slide seven. By centering the company on positive operating leverage as our north star, we created a clear, intuitive framework for our teams to execute on. The cumulative impact of our steady improvement year after year, while capitalizing on a relatively supportive market backdrop, has resulted in a meaningful improvement in BNY's financial performance over the last few years. More consistent revenue growth and deliberate expense management have resulted in positive operating leverage, margin expansion, and improved profitability, together driving double-digit annual earnings per share growth. Turning to slide eight. When compared to BNY's financial performance over the prior decade, we can see the difference that consistent discipline, clear intent, and sustained execution make over time. More resilient top-line revenue growth has started to build, and better control of our expense base has allowed us to continue to self-fund important investments in future growth. While we're encouraged by this progress, we are not satisfied. Our work is far from complete. We remain humble and intensely focused on the opportunity ahead. To that point, I'll wrap up on slide nine with where we are headed next. With the foundations largely in place and more of the people in their seats to help us execute, the next phase of our journey to unlock BNY's potential is about realizing scale and growth opportunities across our company. as we mature in our new commercial and platform models, unlock capacity using AI, and in so doing, serve our clients in new and better ways, enabling the global financial markets and infrastructure of the future. Taken together, our focus for 2026 and over the medium term represents an exciting shift, built on the work done over the past three years to enable higher growth and deliver on the competitive advantages embedded in BNY as we remain steadfast in our commitment to create value for you, our investors. I want to thank our teams around the world for their dedication to our clients and their commitment to reimagining our company. We are entering 2026 with positive momentum and we are excited for the work ahead of us. With that, I'll turn it over to Dermot to take you through the financials for the quarter in greater detail before reviewing our outlook for 2026 and our next set of milestones. Dermot?