The Bank of New York Mellon Corporation

Good morning and welcome to the 2026 Second 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. Welcome to our second quarter earnings call. I'm here with Robin Vins, our CEO, and Dermot McDonough, our CFO. As always, we will reference the 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, July 15, 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 few comments on our performance in the second quarter and our progress over the first half of the year before Dermot takes you through our financials in greater detail and provides you with our updated financial outlook. Referring to page two of the quarterly update presentation, BNY delivered another strong performance in the second quarter. Earnings per share of $2.45 increased by 27% year-over-year. We grew total revenue by 13% year-over-year to a record $5.7 billion, reflecting broad-based growth across our businesses. And we generated approximately 600 basis points of positive operating leverage. Taken together, we expanded pre-tax margin to 40% and return on tangible common equity to 31%. Reflecting on the operating environment, the second quarter presented a dynamic backdrop for global markets. Amid geopolitical tensions, elevated energy prices, and continued uncertainty around inflation, interest rates, and fiscal policy, the fundamental drivers of capital markets remained broadly constructive. Corporate earnings were resilient. Investment in AI infrastructure continued at a significant pace, and labor markets held up despite some signs of moderation. BNY is built for this type of environment. Our diversified set of businesses operate across the breadth of capital markets, benefiting from the higher levels of market activity and strong client engagement. Taking a step back, Our work over the past several years was about laying the foundation for the multi-year reimagination of our company to create a more diverse, durable, and growthier set of businesses that serve our clients in more innovative ways. At the beginning of our transformation, we set out to do three things, which I'll briefly recap, starting with the most important, culture. Revitalizing our leadership team, breaking down silos, and encouraging our people to act as owners has resulted in our teams working more effectively together with the common purpose of making BNY better every day. Second, we fundamentally reimagined how we operate inside the company. No more silos and islands of isolation. but a re-architecting that realigns BNY across client and enterprise platforms. This led to our new operating model, which is now fully activated. And lastly, we said we had to go to market in a new way to make it easier for our clients to do more with us, a powerful value proposition for them and a meaningful revenue opportunity for us. This led to our new commercial model, now in place for two years and driving good momentum. As we get properly underway in phase two of our work, we have clear signals that our strategy is working. Now, we need to capitalize on this foundational work, increasing our focus on innovation, both in new technologies like artificial intelligence and digital assets, and in continued product innovation across our businesses. In short, We have a lot to do, but as I visit our teams around the world and hear from our clients, I'm energized by the feedback and the opportunity. With this in mind, we wanted to share some more specifics on our progress in our mid-year business update on page three. First, on the commercial side, momentum matters. Deepening relationships and partnering more closely with our clients remains one of our greatest opportunities. With our commercial model in place, we now have a clearer view of the white space opportunity ahead of us. As we sharpen our go-to-market strategy, we are starting to see the benefits, broader relationships, larger mandates, and more integrated solutions built on capabilities that BNY is uniquely positioned to deliver as a seamless package. The second quarter was our 14th consecutive quarter of year-over-year sales growth. So far this year, we've had two consecutive record sales quarters. The average deal size is up by more than 20% year-over-year, and approximately 10% of deals are with clients that are entirely new to BNY. Our wins in the second quarter demonstrate, for example, How BNY is helping market participants prepare for expanded clearing for US Treasuries, supporting growth of ETFs in Europe, delivering integrated solutions for asset owners, and enabling digital asset capabilities for asset managers. The common thread is not any one product or solution. It is that by bringing together BNY's platforms, we can more effectively solve challenges for our clients and drive higher and more durable growth for our company. Next, on our platform operating model. This was more than a reorganization. It is a better way of working, one that allows us to move faster, collaborate better, innovate more consistently, and ultimately deliver more for our clients. In the second quarter, we completed the transition and have now shifted our focus from implementation to realizing the benefits of this new operating model over the next several years. We are already seeing some early progress. We're now able to move more nimbly, bringing product, technology, operations, and commercial teams together to build more integrated solutions and respond more quickly and comprehensively as client needs evolve. Given the breadth of our businesses and supported by our operating and commercial models, BNY has an incredible advantage in innovating new ways to solve emerging client needs from across our platforms. A good example of this from the second quarter is our work with the US Treasury Department as the financial agent for Trump accounts, which we are supporting with capabilities from across BNY. We can also see that several innovative products launched over the past few years, for example, buy-side trading solutions, Collateral One, Borrow Plus, have become compelling contributors to revenue today. Another component of innovation is linked to the shift toward an always-on financial ecosystem. Payments, liquidity, collateral, digital assets, and securities markets are becoming more interconnected. creating demand for infrastructure that operates with greater speed, certainty, and resilience. We believe this represents one of the defining opportunities for financial services over the next decade, and it is an area where BNY is well positioned to lead. In the second quarter, we announced our expanded relationship with Circle, bringing together institutional digital asset custody with mint and burn capabilities for USDC within a single operating model. This builds on our role as custodian of USDC reserves and enables clients to move more seamlessly between traditional cash and blockchain based networks through infrastructure that combines institutional grade governance, operational resilience and scale. We expect this will be a recurring theme as we continue to invest in the infrastructure that we believe will support the future of financial markets. Whether through real-time payments, tokenized assets, collateral mobility, or digital cash, our objective is the same, to help clients connect traditional and digital financial ecosystems in ways that improve efficiency, expand optionality, and support growth through trust and resiliency. Which brings me to AI. Over the past six months, the conversation around AI has reflected a wide range of sentiment. Excitement. about what the technology can unlock, urgency as companies move to deploy it, and skepticism about whether the level of investment will translate into real outcomes. Business leaders are looking at how to measure returns, manage risk and turn AI from experimentation into durable value. At BNY, we continue to view AI as one of the most important long-term opportunities for our company and for society more broadly. Over the past few years, we've invested in the enterprise capabilities, governance, and talent to allow us to embed AI across the company in ways that strengthen how we innovate, how we operate, and ultimately how we deliver for clients. We are now starting to see AI create value across three dimensions. First, AI is helping us to run the company better by embedding new capabilities into our end-to-end workflows and enabling our people to work more productively. This creates capacity. It would be a mistake to think about this capacity as just an efficiency creator. We also see it as an enabler for growth and for our broader strategy. Second, AI is helping us build better products and deliver better experiences for our clients. And third, we believe AI can expand the perimeter for BNY by allowing us to bring new capabilities to market through our platforms, our data, and our expertise. It is early days across all three dimensions, but we are starting to see AI create a tangible and measurable impact across the entire client lifecycle, some examples of which we shared with you in our presentation last quarter. As these capabilities continue to evolve, We believe AI can become an increasingly important source of differentiation and long-term value creation for our clients, our people, and our shareholders. Looking back on the first half of the year, we are encouraged by our progress. Across the company, we are seeing the capabilities we are building translate into better outcomes for our clients and stronger performance for our shareholders, with our people at the heart of this progress. The way BNY works today is fundamentally different than it was just a few years ago, and our stronger culture of collaboration, ownership, and innovation is helping us to deliver faster and more consistently for our clients and more effectively as one company. To conclude, we're entering the second half of the year with strong momentum. The trends that are reshaping financial markets, greater activity, Increasing complexity, new technologies, and demand for trusted partners play to BNY's strengths and give us confidence that our strategy is the right one. With that, over to you, Dermot.