BNY Bank of New York Mellon 10-K 2024-12-31 section summaries

Business overview

BNY (NYSE: BK), headquartered in New York and operating since 1784, reported $52.1 trillion of assets under custody and/or administration and $2.0 trillion of assets under management as of December 31, 2024. Its three principal segments are Securities Services, Market and Wealth Services, and Investment and Wealth Management. The Other segment includes leasing, corporate treasury and securities portfolio activities, derivatives and other trading, insurance, tax-credit and other corporate investments, and certain business exits.

BNY’s principal U.S. banking subsidiaries house its securities, custody, issuer, treasury, clearance and collateral, bank-advised investment-management, wealth-management and certain Pershing activities. Most Investment Management and Pershing businesses operate in non-bank subsidiaries. BNY SA/NV, its main continental European bank, is based in Belgium and has branches in eight other European countries, focusing on global custody, asset servicing and collateral management. Banking subsidiaries are subject to U.S. and/or local regulatory oversight; U.S. bank deposits are FDIC-insured to the extent provided by law.

Workforce

At year-end 2024, BNY had approximately 51,800 full-time employees. Approximately 60% of total employees, including part-time employees, were outside the U.S. Its reported international workforce included approximately 10,900 employees in EMEA, 18,900 in APAC, and 800 in other locations, primarily Brazil.

Women represented 40% of the global workforce and 43% of the U.S. workforce; 39% of U.S. employees were from underrepresented ethnic and/or racial backgrounds. Women and people from underrepresented ethnic and/or racial backgrounds represented, respectively, 43% and 26% of the Executive Committee, and 45% and 27% of the Board. In 2024, BNY provided eligible employees an award of 10 restricted stock units (“BK Shares”).

Retirement plans included approximately 41,500 participants in the U.S. 401(k) plan, 6,400 participants in the frozen U.S. defined-benefit pension plan, and 18,400 participants in non-U.S. defined-benefit plans, some of which were frozen.

Competition and execution risks

BNY faces intense competition across custody, corporate trust, clearing, collateral management, brokerage, investment and wealth management, and related financial and technology services. Competition depends on service and execution, access to capital, product range, performance, technology, expertise, price and reputation. Financial-technology firms and other providers may be less extensively regulated, while technological advances enable more entrants to offer financial services. BNY’s ability to compete also depends on attracting, retaining and developing talent amid heightened regulatory restrictions and an inflationary or uncertain interest-rate environment.

BNY FY2024 financial summary

Consolidated results

Revenue increased 5.2% in FY2024, as fee and other revenue grew 7.2%, more than offsetting a 0.8% decline in net interest income. Lower noninterest expense and provision for credit losses contributed to higher pretax income and net income. Net income applicable to common shareholders includes $194 million of preferred dividends in FY2024. Reduced average diluted shares also contributed to EPS growth.

Business and operating metrics

Assets under custody and/or administration continued to grow; the comparable FY2022 amounts were $44.3T overall and $1.5T at CIBC Mellon. Assets under management were $1.8T in FY2022. The FY2024 employee count excludes interns, a change that limits comparability with prior years.

Returns, capital and shareholder measures

Returns and operating margin improved, while net interest margin narrowed. Regulatory capital and leverage ratios also declined year over year and remain important measures to monitor. For context, FY2022 return on common equity was 6.5%, non-GAAP return on tangible common equity 13.4%, pre-tax operating margin 21%, and net interest margin 0.97%. The FY2022 CET1 ratio was 11.1%, and common shares outstanding were 808.445 million.

The FY2022 common dividend was $1.42 per share, with a 50% payout ratio. Non-GAAP tangible-return and tangible-book-value measures exclude goodwill and intangible assets, net of deferred tax liabilities.

Accounting change

FY2023 and FY2022 results were retrospectively restated following BNY’s 2024 adoption of ASU 2023-02, which applies the proportional amortization method to investments in renewable energy projects.

As of December 31, 2024, BNY oversaw $52.1 trillion in assets under custody and/or administration and $2.0 trillion in assets under management. The global financial-services company employed more than 50,000 people and served more than 90% of Fortune 100 companies, nearly all of the world’s top 100 banks, and more than 90% of the top 100 pension plans.

BNY reports three business segments:

• Securities Services: Asset Servicing, Issuer Services, and Clearance and Collateral Management.
• Market and Wealth Services: Pershing and Treasury Services.
• Investment and Wealth Management: Investment Management and Wealth Management.

Remaining operations are reported in Other.

FY 2024 financial highlights

FY 2024 GAAP earnings included negative notable items. Both years included severance, litigation reserves and the FDIC special assessment; FY 2023 also included a contingent-consideration fair-value reduction and net losses on disposals. The FY 2024 comparison reflects adjustments for the FDIC assessment.

Total revenue grew 5% year over year. Fee revenue rose 6%, mainly on higher market values, net new business, client activity and foreign-exchange revenue, partly offset by AUM flow mix. Investment and other revenue increased, reflecting the absence of the prior-year contingent-consideration fair-value reduction and higher fixed-income and equity trading activity. Net interest income declined 1%: deposit-mix changes more than offset higher investment-securities yields and balance-sheet growth.

The credit-loss provision primarily reflected reserve increases for commercial real estate exposure and changes in the macroeconomic forecast. Lower noninterest expense reflected FDIC special-assessment adjustments and efficiency savings, partly offset by investment spending, merit increases and revenue-related costs.

Assets under custody and management

AUC/A increased 9%, supported by higher market values, client inflows and net new business, partly offset by U.S.-dollar strength. AUM increased 3%, mainly due to higher market values, partly offset by U.S.-dollar strength.

Capital ratios

The CET1 comparison uses different regulatory approaches. The decline reflected common-stock repurchases, dividends and higher risk-weighted assets, partly offset by capital generated from earnings. The leverage ratio fell as higher average assets more than offset increased capital.

Fee and other revenue

BNY’s fee and other revenue increased 7% in FY2024 to $14.307B, from $13.352B in FY2023 ($13.025B in FY2022). Fee revenue, which represented 73% of total revenue in both FY2024 and FY2023, versus 78% in FY2022, rose 6% to $13.620B from $12.872B ($12.955B in FY2022). Higher investment services, investment management and performance, and foreign exchange fees drove the increase. FY2023 and FY2022 comparisons were retrospectively restated following adoption of ASU 2023-02 on renewable-energy investments.

Investment services fees increased 7%, supported by higher market values, net new business and client activity. Period-end assets under custody and/or administration (AUC/A) rose 9% to $52.1T from $47.8T (FY2022: $44.3T), reflecting market appreciation, client inflows and net new business, partly offset by a stronger U.S. dollar. The AUC/A mix shifted to 37% equity and 63% fixed income, from 35% and 65%, respectively. AUC/A includes CIBC Mellon balances of $1.8T at FY2024 year-end, $1.7T at FY2023 year-end and $1.5T at FY2022 year-end.

Investment management and performance fees rose 3% after declining 7% in FY2023. Higher market values were partly offset by AUM flow mix and lower performance fees. Performance fees fell to $51M from $81M. On a constant-currency, non-GAAP basis, investment management and performance fees increased 2%. Period-end AUM increased 3% to $2.029T from $1.974T (FY2022: $1.836T), as higher markets were partly offset by unfavorable currency effects.

Foreign exchange revenue increased 9% on higher transaction volumes, following a 23% decline in FY2023. It is also sensitive to client transaction spreads, market volatility, hedging and currency remeasurement. Financing-related fees rose 13%, primarily on higher underwriting fees. Distribution and servicing fees increased 7% on higher money-market balances; part of this revenue is offset by distribution and servicing expense paid to other intermediaries.

Investment and other revenue

Investment and other revenue rose $207M, or 43%, to $687M from $480M (FY2022: $70M). The increase primarily reflected the smaller impact in FY2024 of a reduction in the fair value of a contingent consideration receivable recorded in FY2023, as well as higher fixed-income and equity trading activity.

The FY2022 net securities loss included a $449M net loss from securities-portfolio repositioning. Consolidated investment management fund income should be considered together with net income attributable to noncontrolling interests, because BNY has no economic interest in that portion of the funds. Other investment gains include strategic equity, private equity and other investments.

Net interest income and margin

GAAP NII declined 1% in 2024, and NIM fell 3 basis points. Management attributed the NII decrease mainly to deposit mix, partly offset by higher investment-securities yields and balance-sheet growth. The FTE adjustment was $2M in both 2024 and 2023, compared with $11M in 2022; it does not affect net income.

Interest income, funding costs and balance-sheet mix

Higher interest income was more than offset by higher interest expense, leaving FTE NII slightly lower. The decline in average noninterest-bearing deposits alongside growth in interest-bearing deposits reflects a shift toward interest-bearing funding. Non-U.S.-dollar deposits were approximately 25% of total deposits in both years; euro deposits were about 50% of non-U.S.-dollar deposits in 2024 and 45% in 2023.

Federal funds sold and securities purchased under resale agreements averaged $31.306B in 2024 and $26.077B in 2023. Their reported yields—34.86% and 27.38%—are materially distorted by enforceable netting agreements, with average offsets of approximately $176B and $111B, respectively. Excluding netting, yields were 5.28% and 5.22%. Corresponding reported rates on federal funds purchased and securities sold under repurchase agreements were 58.64% and 32.62%; excluding netting, rates were 5.18% and 5.10%.

Management expects 2025 NII to increase from 2024 based on market-implied forward rates at Dec. 31, 2024. The outlook depends substantially on client-deposit levels and mix and on reinvestment yields for the investment-securities portfolio.

Other reported results

Noninterest expense declined 4% in 2024, primarily reflecting the net effect of FDIC special-assessment adjustments and efficiency savings, partly offset by investment, merit-increase and revenue-related costs. Bank assessment charges were $36M, versus $788M in 2023; excluding notable items, expense increased 1% on a non-GAAP basis. Software and equipment expense rose 8%. Year-end employees numbered 51,800 versus 53,400; the 2024 count excludes interns, unlike the prior-year count. Management expects 2025 expense to increase slightly, as investment and revenue-related costs are partly offset by efficiency savings.

2024 segment performance

BNY’s two reportable segments grew in 2024, supported by stronger client activity and market values, with additional growth from collateral-related fees. Segment results use BNY’s internal management basis, not GAAP. The 2023 and 2022 comparatives were revised to reflect 2024 business realignments, including the transfer of Institutional Solutions from Pershing to Clearance and Collateral Management, along with smaller transfers.

Securities Services’ expenses declined 1%, as efficiency savings partly offset investment and merit-increase costs. Market and Wealth Services’ expenses rose 5%, mainly from investments, merit increases and revenue-related expenses, partly offset by efficiency savings.

Revenue by business

Asset Servicing growth reflected higher market values, net new business, client activity and FX revenue, partly offset by lower net interest income. Issuer Services benefited mainly from Corporate Trust net new business, partly offset by lower Depositary Receipts revenue. Pershing’s higher market values and client activity were partly offset by lost business and lower net interest income. Treasury Services grew on net new business, higher client activity and net interest income. Clearance and Collateral Management benefited from higher collateral-management fees, clearance volumes and net interest income.

Segment revenue components

Across the industry, asset-management and regulatory trends are shifting investable assets toward lower-fee products, which weighs on investment-services fees. These trends also create outsourcing opportunities as clients seek regulatory support and lower operating costs. Digital-asset custody and related initiatives had a de minimis financial impact in 2024.

Operating metrics

Securities Services’ AUC/A increased 10%, reflecting higher market values, client inflows and net new business, partly offset by a stronger U.S. dollar; Depositary Receipts programs declined 8%. Pershing’s negative net new assets reflected the deconversion of previously lost business, while DARTs increased 15%. BNY serviced an average of $5.4T globally in 2024, including about $4.2T of the U.S. tri-party repo market. In Market and Wealth Services, average loans rose 11% to $41.533B and average deposits rose 5% to $90.185B.

Seasonality and sensitivities

Quarterly results can be affected by first-quarter stock-award vesting and merit increases, lower third-quarter client activity, fourth-quarter marketing costs, and performance-fee seasonality in Investment and Wealth Management. Currency exposure is mainly to the pound and euro. Securities Services and Market and Wealth Services generally have more foreign-currency expenses than revenues, while Investment and Wealth Management generally has the reverse; currency movements can affect segment growth comparisons but are not expected, in isolation, to significantly affect consolidated net income. BNY estimated that a 5% change in global equity markets, spread evenly through the year, would affect fee revenue by less than 1% and diluted EPS by $0.05–$0.08.

Investment and Wealth Management

Revenue recovered in 2024 after declining in 2023. Higher market values supported both Investment Management and Wealth Management, while fee mix, flows and lower performance fees partly offset the gains. Income before taxes increased substantially; even excluding notable items, pretax income and adjusted margins improved.

Revenue grew 7% in 2024 after falling 11% in 2023, from $3.563B in 2022. Pretax income was $47M in 2022. Excluding notable items, pretax income rose 14% in 2024 after declining 28% in 2023. The pre-tax operating margin was 18%, versus 12% in 2023 and 1% in 2022; adjusted margin was 20% versus 14%. Excluding notable items, adjusted margin was 19% in 2023 and 23% in 2022.

Investment Management revenue rose 9%: higher market values and the absence of a 2023 reduction in the fair value of a contingent consideration receivable outweighed less favorable AUM flows and mix and lower performance fees. Wealth Management revenue increased 5%, mainly on higher market values, partly offset by product mix. The businesses combine specialist investment management and global distribution with wealth, custody, planning, private banking and servicing offerings.

Investment management and performance fees increased 3% overall (2% on a constant-currency, non-GAAP basis); distribution and servicing fees rose 14%. Other fees primarily include investment services fees. Investment and other revenue is net of income or loss attributable to noncontrolling interests in consolidated investment management funds. Net interest income rose 5%. In 2022, the corresponding figures included $3.303B of investment management and performance fees, $192M of distribution and servicing fees, $(133)M of other fees, $(27)M of investment and other revenue, and $228M of net interest income.

Noninterest expense was nearly unchanged as employee merit increases and higher investment spending were offset by efficiency savings. By comparison, 2022 expense was $3.515B, including a $680M goodwill impairment. Intangible amortization was $18M in 2024, $20M in 2023 and $26M in 2022; provision for credit losses was $4M in 2024, versus a $4M benefit in 2023 and $1M expense in 2022.

AUM increased 3%, primarily reflecting $69B of market appreciation and partly offset by a negative $25B currency impact. Long-term strategy outflows of $52B—including $42B from index and $10B from active strategies—were partly offset by $45B of cash inflows; other/divestiture activity added $18B. In 2023, AUM benefited from $121B of market impact and $37B of positive currency impact. Product mix affects fee yields: actively managed equity, multi-asset and alternative investments generally earn higher percentage fees than fixed income, liability-driven investments, cash and indexed/passive products. Industry demand for lower-fee products and performance-based fees are relevant trends. Revenue from non-U.S. sources was 30%, versus 32% in 2023.

Average loans declined 1% to $13.610B from $13.718B; average deposits fell 26% to $10.589B from $14.280B (and $19.214B in 2022). Year-end AUM by product in 2024 versus 2023 was: equity $162B/$145B; fixed income $221B/$205B; index $491B/$459B; liability-driven investments $548B/$605B; multi-asset and alternative investments $171B/$170B; and cash $436B/$390B.

Other

This segment includes leasing, corporate treasury and securities portfolio activities, derivatives and other trading, corporate and bank-owned life insurance, tax-credit and other corporate investments, and certain business exits.

The pretax loss narrowed mainly as noninterest expense declined following adjustments for the FDIC special assessment. Revenue was $(322)M in 2022, when fee revenue was $61M, investment and other revenue $(221)M, net interest expense $162M, and the pretax loss $623M. Noninterest expense was $23M in 2022; provision for credit losses was $23M. Average loans and leases were $1.225B in 2022.

International operations

International clients generated 35% of BNY’s revenue in FY2024, down from 36% in FY2023. Net income from international operations increased to $2.3B from $2.0B. At year-end, international operations managed 47% of BNY’s AUM, compared with 51% a year earlier. Approximately 60% of employees were outside the U.S.

Regional results

EMEA revenue growth was driven primarily by higher net interest income, collateral management fees and clearance volumes in Market and Wealth Services. In APAC, lower revenue in Market and Wealth Services and Investment and Wealth Management was partly offset by higher Securities Services revenue.

BNY’s international business spans asset servicing, global payments, investment management, securities clearance and settlement, fiduciary and trade and cash services, and foreign exchange in more than 100 currencies. In emerging markets, activity emphasizes custody, payments and issuer services, with additional products introduced as markets mature; established markets are more focused on global investment services.

Foreign-currency effects

Currency translation affects fee revenue, net interest income, noninterest expense, AUC/A and AUM. Dollar depreciation against the pound or euro increases translated amounts, while appreciation reduces them.

Country risk exposure

At Dec. 31, 2024, the top 10 non-U.S. country exposures totaled $67.7B, approximately 65% of total non-U.S. exposure. The figures use BNY’s internal risk-management basis, before the allowance for credit losses, and generally reflect the residence of the counterparty or obligor, the risk-mitigant provider, or the securities issuer.

Selected higher-risk exposures included $1.5B in Brazil, primarily short-term trade-finance loans to large financial institutions; BNY also provides investment services and investment management there. Russia exposure was $0.6B, consisting of cash balances in securities-services businesses. It could increase if client cash subject to distribution restrictions is received. BNY ceased new banking business in Russia and suspended investment-management purchases of Russian securities; Russian securities remained insignificant relative to total AUC/A and AUM. Israel exposure was $158M, primarily investment-grade short-term deposits and OTC derivatives maturing within six months. BNY continues to monitor these exposures.

Credit-loss allowance

BNY estimates expected lifetime credit losses using portfolio-specific models that incorporate probability of default, loss given default and exposure at default. The estimates use baseline, upside and downside macroeconomic scenarios, with qualitative overlays for risks such as concentrations and borrower-specific factors. At December 31, 2024, the baseline scenario had the greatest weighting, while the remaining weighting was divided equally between the upside and downside scenarios.

The baseline assumed positive but moderating GDP growth, stable unemployment and slightly declining commercial real estate (CRE) prices through 2025. The downside scenario assumed negative GDP growth through Q3 2025, rapidly rising unemployment and sharply lower CRE prices. Changes in economic forecasts, borrower ratings and management judgments could materially affect the allowance.

These sensitivities are hypothetical scenarios, not management forecasts.

Goodwill and intangible assets

At December 31, 2024, BNY had $16.6 billion of goodwill, $2.6 billion of indefinite-lived intangible assets and $275 million of other amortizing intangible assets. The company recognized no goodwill or intangible-asset impairment in 2024. Goodwill and indefinite-lived intangibles are tested at least annually; other amortizing intangibles are assessed for impairment when indicators arise. Changes in long-term cash-flow assumptions or discount rates could lead to material non-cash impairment charges.

BNY tested its Investment Management reporting unit each quarter during 2024. At year-end, the unit had $6.0 billion of allocated goodwill and estimated fair value approximately 11% above carrying value, using a 10.5% discount rate. A 25-basis-point increase or decrease in that rate would lower or raise estimated fair value by 4%, respectively. A 10-basis-point increase or decrease in long-term growth would raise or lower fair value by approximately 1%, respectively.

The other six reporting units were tested in Q2 2024 using a 10% discount rate. Their estimated fair values were substantially above carrying values, and no impairment was identified.

Litigation and regulatory contingencies

Accruals for litigation and regulatory contingencies depend on significant management estimates and judgment.

Balance sheet and funding

At December 31, 2024, BNY’s assets increased modestly, with growth in federal funds sold and resale agreements, securities and loans partly offset by lower deposits at the Federal Reserve and other central banks. Deposits rose, while available funds and long-term debt declined.

The reduction in long-term debt reflected maturities, redemptions and a lower fair value of hedged debt, partly offset by new issuance.

Securities portfolio

The $6.172B net unrealized loss comprised a $1.596B pre-tax loss on available-for-sale (AFS) securities, net of hedges, and a $4.576B loss on held-to-maturity (HTM) securities. The loss improved as securities moved closer to maturity. AFS securities had fair value of $88.0B (67% of the portfolio); HTM securities had fair value of $44.0B (33%). Portfolio growth primarily reflected non-U.S. government securities and agency residential mortgage-backed securities (RMBS), partly offset by lower U.S. Treasuries and government agency securities.

Net purchase premium/discount was $(57)M in 2024, compared with $821M in 2023 and $1.109B in 2022. Reported net amortization was $26M in 2024, versus $167M in 2023 and $362M in 2022; including accretion of discontinued hedges, 2024 had $149M of net accretion, compared with $104M of net amortization in 2023.

Equity investments

Equity-investment carrying value rose to $5.083B from $4.519B, largely because tax-credit investments increased to $2.821B from $2.186B. Other 2024 holdings included $852M of equity-method investments, $478M of Federal Reserve Bank stock, $679M of other equity investments, $196M of seed capital and $57M of Federal Home Loan Bank stock. Effective January 1, 2024, eligible renewable-energy tax-credit investments adopted the proportional-amortization method.

Lending exposure and credit characteristics

Total lending-related exposure grew 9%. Financial-institution exposure rose 22%, primarily in securities-industry and bank clients. Financial-institution and commercial portfolios together represented 49% of total exposure, up from 46%. Financial-institution exposure was 96% investment grade, 84% due within one year and 67% secured. Secured intraday dealer credit tied to tri-party repo was $13.4B, collateralized by high-quality liquid securities. Commercial exposure was 96% investment grade, with 15% due within one year.

Wealth-management mortgages were primarily interest-only, adjustable-rate loans, with a 61% weighted-average loan-to-value ratio at origination; less than 1% were past due. CRE exposure was 71% secured, compared with 73% a year earlier; office exposure was $2.4B, and the New York metro area accounted for 34% of CRE exposure. Margin loans were collateralized by marketable securities, with required daily collateral exceeding 100% of loan value; $8B related to fully collateralized broker-dealer term loans, versus $7B in 2023. Overdrafts were generally repaid within two business days.

Of the $71.570B loan balance, $51.572B matured within one year, $8.614B in one to five years, $1.882B in five to 15 years and $9.502B after 15 years; the long-dated balance was largely wealth-management mortgages. Loans maturing after one year included $14.363B of floating-rate and $5.635B of fixed-rate loans. Key credit risks include concentrated financial-institution and commercial exposures, CRE and other real-estate exposure, and remaining unrealized securities losses, although reported ratings and collateralization were strong.

Credit quality and allowance for credit losses

BNY’s provision for credit losses declined in FY2024, although charge-offs rose sharply, primarily because of commercial real estate (CRE). The year-end allowance was lower than in FY2023.

CRE accounted for $82M of FY2024 charge-offs. The increase in the provision was primarily related to CRE reserves and changes in the macroeconomic forecast. Allowance estimates depend on forecasts and management judgment, and actual losses may differ.

At Dec. 31, 2024, $315M, or 86%, of the $366M allowance for loans and lending commitments was allocated to CRE, compared with $325M, or 83%, of $390M a year earlier. Thus, CRE’s share of reserve exposure increased even as its allocated amount declined. Average CRE loans were $6.915B; CRE net charge-offs were $82M, or 1.19% of average CRE loans. BNY describes its lending focus as investment-grade clients that use its non-credit services; exposures also include unfunded commitments, standby letters of credit, and custody and securities-clearance overdrafts.

Nonperforming assets

Nonperforming assets and loans declined, but the reduction in CRE nonperforming loans partly reflected charge-offs rather than solely improved borrower performance.

Deposits and funding

Total deposits rose 2%, driven mainly by higher interest-bearing deposits in U.S. offices, partly offset by lower interest-bearing deposits in non-U.S. offices. Noninterest-bearing deposits were unchanged.

Non-U.S.-office deposits were primarily overnight. Uninsured U.S.-office deposits, a substantial base generally consisting of demand deposits, were nearly unchanged. Uninsured time deposits were $808M in U.S. offices and $1.093B in non-U.S. offices at year-end 2024; nearly all matured within 12 months.

BNY relies primarily on client deposits as a low-cost, stable funding source, supplemented by short-term borrowings and long-term debt. Short-term funding includes repurchase agreements, customer and broker-dealer payables, commercial paper, and other borrowings; some repo funding requires securities collateral. Customer and broker-dealer payables vary with trading activity and market volatility. Other borrowings include Federal Home Loan Bank advances, settlement-related sub-custodian overdrafts, and Pershing credit-line borrowings.

Liquidity and funding

BNY remained above regulatory liquidity minimums in 2024, although year-end available funds and operating cash flow declined from 2023.

The year-over-year decline in available funds primarily reflected lower deposits at the Federal Reserve and other central banks and lower bank deposits, partly offset by increases in federal funds sold and securities purchased under resale agreements.

Lower repurchase-agreement funding and trading liabilities drove the reduction in average non-core funding, partly offset by higher commercial paper. Changes in domestic and foreign deposits and noninterest-bearing deposits primarily reflected client activity. BNY warns that a significant reduction in Securities Services and Market and Wealth Services client activity could reduce its access to deposits.

Regulatory liquidity measures

Year-end consolidated HQLA before adjustments comprised $89B of cash and $93B of securities. BNY and affected U.S. bank subsidiaries remained above the 100% minimum LCR throughout 2024; the NSFR was also above its 100% requirement.

Debt, liquidity sources and leverage

During 2024, $6.0B of maturities and redemptions and a decrease in the fair value of hedged debt were partly offset by $5.75B of debt issuance. The Parent had $3.3B of long-term debt maturing in 2025. In February 2025, it issued $1.25B of callable senior notes due 2031, fixed at 4.942% through Feb. 10, 2030, then floating at compounded SOFR plus 88.7 basis points.

Moody’s upgraded BNY’s issuer and senior unsecured ratings to Aa3 from A1 in November 2024, changing the outlook from positive to stable. Other BNY, bank-subsidiary and agency ratings were generally affirmed; the filing also notes a negative outlook on certain bank senior-debt and unsecured ratings.

The Parent’s liquidity sources include capital markets, subsidiary dividends, cash on hand and ordinary-course access to a committed IHC credit facility. U.S. bank subsidiaries could pay the Parent approximately $82M in dividends without regulatory waiver; non-bank subsidiaries held $3.8B of liquid assets at year-end. The Parent’s double leverage ratio improved to 119.7% from 120.5%, within management’s target range. Management cites unencumbered liquid assets at principal subsidiaries, fee-based cash generation (fee revenue was 73% of 2024 total revenue) and bank-subsidiary dividend capacity as supporting liquidity.

Cash flows and capital returns

Operating cash flow fell sharply: cash generation from earnings was partly offset by changes in trading assets and liabilities. Higher investing cash use reflected changes in resale agreements, net securities-portfolio growth and loans, partly offset by changes in central-bank deposits. Financing cash inflows in 2024 primarily reflected deposit changes and debt issuance, partly offset by debt repayments and share repurchases.

BNY paid $1.5B in common and preferred dividends in 2024; the common-dividend payout ratio was 31%. It repurchased 48.9M shares at an average $62.70 per share, for $3.1B total. Commercial paper outstanding was $301M at year-end, versus none a year earlier; average outstanding was $1.2B in 2024 versus $5M in 2023.

Capital position and shareholder returns

BNY’s capital remained well above regulatory requirements at Dec. 31, 2024. Earnings and higher additional paid-in capital lifted equity, while repurchases, dividends and higher risk-weighted assets (RWAs) reduced some capital ratios.

For FY2024, BNY repurchased 48.9M shares at an average price of $62.70, for $3.1B (the capital-generation table reports $3.064B). Common dividends totaled $1.348B. Annual dividends per common share rose to $1.78 from $1.58, while the payout ratio declined to 31% from 41%. The April 2024 authorization added $6.0B of repurchase capacity to any remaining amount under the January 2023 $5.0B program. In Q4, BNY repurchased 9.598M shares at an average $78.15; $5.332B remained available under announced plans at year-end.

Capital generation and regulatory ratios

CET1 capital rose to $18.759B from $18.534B. FY2024 net income applicable to common shareholders of $4.336B, less $310M for goodwill and intangible assets net of related deferred tax liabilities, produced $4.026B of gross CET1. Repurchases and dividends returned $4.412B; other comprehensive gain added $237M, while other additions included $413M of additional paid-in capital and other deductions were $39M. Net CET1 generated was $225M.

The effective CET1 ratio comparison is not on a consistent methodology: the 2024 ratio uses the Standardized Approach, while the 2023 effective ratio used the Advanced Approaches. CET1 declined mainly because of repurchases, dividends and higher RWAs, partly offset by earnings. Lower leverage ratios reflected higher average assets, partly offset by increased capital.

Regulatory cushion and risks

BNY and its U.S. bank subsidiaries were “well capitalized” at both year-ends. At Dec. 31, 2024, BNY’s consolidated effective CET1, Tier 1 and total capital ratios were 11.2%, 13.7% and 14.8%, respectively, versus applicable minimums of 8.5%, 10% and 12%. The Bank of New York Mellon subsidiary reported CET1 and Tier 1 ratios of 16.1% each, a total capital ratio of 16.3%, leverage of 6.3% and SLR of 7.6%. The Federal Reserve maintained BNY’s stress capital buffer at the 2.5% regulatory floor for October 2024–September 2025.

External TLAC was 30.2% of RWA versus a 21.5% minimum with buffers, and 14.3% of total leverage exposure versus 9.5%. External LTD was 15.3% of RWA versus a 7.5% minimum, and 7.3% of leverage exposure versus 4.5%. Falling below TLAC minimums with buffers could constrain dividends, share repurchases and discretionary executive compensation. Capital ratios may fluctuate with client-driven balance-sheet changes, RWA and model approvals or calibration, regulatory guidance and market practices; industry operational losses, including fines and penalties, may also affect required capital. Failure to meet capital or “well capitalized” requirements could limit BNY’s activities and harm its financial condition. Repurchase timing and size also depend on market conditions, capital, liquidity, performance, alternative uses of capital, and legal and regulatory constraints.

Trading activities and risk management

BNY’s trading activities primarily support customer market-making and trade facilitation, with hedging used to manage resulting risks. Activities are subject to Volcker Rule requirements. Risk controls include position limits, value-at-risk (VaR) and other sensitivity measures. VaR uses a one-day holding period and 99% confidence level, and excludes consolidated investment management funds and seed capital investments. BNY cautions that VaR may not capture extreme losses over longer horizons or changing market liquidity, and that historical market movements may not predict future conditions.

Trading portfolio VaR

Dollars in millions. VaR by risk factor is shown as average / minimum / maximum / year-end.

Interest rates and foreign exchange represented 43% and 35% of 2024 average gross VaR, respectively; credit represented 21% and equity 1%. Daily trading losses exceeded overall portfolio VaR once in 2024.

Daily trading revenue/loss distribution

Number of days in each quarter; ranges in millions.

Trading revenue includes realized and unrealized gains and losses, primarily from customer FX spot and forward transactions, derivatives and securities trades. It excludes commissions, underwriting fees and net interest income.

Trading balances and derivative valuation

Trading balances primarily comprise debt and equity instruments and FX and interest-rate derivative assets or liabilities not designated as hedges. Derivative fair values reflect BNY’s and counterparties’ credit ratings and observable CDS spreads, so valuations are sensitive to changes in both parties’ credit spreads. Net of hedges, CVA increased by less than $1 million and DVA decreased by less than $1 million in 2024, reducing other trading revenue by $1 million. In 2023, CVA and DVA each increased by $1 million, increasing other trading revenue by less than $1 million. No realized losses were charged against CVA reserves in either year.

Trading counterparty credit exposure

FX and other trading counterparty exposure, net of collateral on an internal risk-management basis.

Exposure increased year over year, while the investment-grade share rose. Significant changes in counterparty credit ratings could affect BNY’s credit risk.

Interest-rate risk

BNY’s modeled 12-month pre-tax net interest income (NII) sensitivity declined at Dec. 31, 2024, compared with both prior comparison dates. The change was primarily driven by an increase in fixed-rate assets and floating-rate liabilities.

These modeled NII sensitivities assume static deposit balances and mix and no management mitigation. Actual NII also depends on deposit levels and mix, rate paths, client pricing, spreads, prepayments, derivatives and management actions. Results may not be linear and should not be extrapolated to more severe shocks.

Noninterest-bearing deposits are particularly sensitive to short-term rates. BNY estimates that an instantaneous $5 billion change in U.S.-dollar noninterest-bearing deposits would change the +100 bp sensitivity result by approximately $260 million and the −100 bp result by approximately $160 million: a reduction in deposits would lower, and an increase would raise, the respective sensitivity results. The impact would be smaller if the deposit change included a mix of interest-bearing and noninterest-bearing balances. In periods of low short-term rates, BNY may waive money-market fund and similar fees to protect investors from negative returns.

Economic value of equity

Economic value of equity (EVE), which discounts projected asset and liability cash flows over a long-term horizon, showed the following modeled changes at Dec. 31, 2024:

These EVE results exclude management strategies that could limit the effects of rate movements. Accounting treatment can also cause reported and economic effects to diverge: rising rates can reduce the value of available-for-sale securities, adversely affecting reported equity and regulatory capital, without a corresponding accounting change in fixed liabilities, even though those liabilities become more valuable economically as rates rise.

Foreign-exchange risk

BNY generally funds foreign-currency assets with liabilities in the same currency. When matched liabilities are unavailable or not desired, it uses foreign-exchange contracts; it also uses forwards to hedge the value of net investments in foreign operations. At Dec. 31, 2024, those net investments totaled $14 billion across 19 foreign currencies.

Enterprise risk framework and governance

BNY uses an enterprise-wide framework covering operational, market, credit, liquidity, model and strategic risks. Risks are identified and assessed quarterly, and the results inform risk appetite, enterprise stress testing and capital planning. The Board Risk Committee reviews and approves the Risk Appetite Statement and key monitoring metrics at least annually. BNY also conducts enterprise stress testing through its Internal Capital Adequacy Assessment Process, in accordance with CCAR and enhanced prudential standards.

Risk oversight follows a three-lines-of-defense model: business management owns and manages risk; independent Risk and Compliance, led by the Chief Risk Officer (CRO), establishes standards and challenges the business; and Internal Audit provides independent assurance. The CRO reports to both the CEO and the Board Risk Committee. The Board’s independent Risk and Audit Committees provide oversight. The CRO chairs the Senior Risk and Control Committee, which includes senior executives such as the CFO, CIO and General Counsel and oversees risk, compliance and ethics. Supporting committees address areas including balance-sheet, credit, operational, technology, regulatory, anti-money-laundering, product and resolution risks.

Principal risk exposures and controls

• Operational risk: Process, people, systems or external events—including transaction-processing failures, fraud, financial crime, cyberattacks, unauthorized access to confidential data, technology disruption and third-party failures—could cause losses or legal, regulatory and reputational harm. BNY’s operational-resilience approach includes a Business Services Framework, technology-asset management, incident and crisis management, disaster-recovery testing and business continuity, with attention to provider resilience. Management states that these capabilities are intended to sustain client services during disruptions.

• Market risk: Direct trading exposure is generally limited and primarily reflects client-support activity. More significant exposure comes from interest-rate and credit-spread movements affecting the investment portfolio, which supports asset/liability management and net interest income, as well as interest-rate sensitivity across the balance sheet. BNY also has indirect exposure to changes in collateral values supporting securities-financing and derivatives positions. Controls include trading and stressed value-at-risk monitoring, collateral-standards review and VaR back-testing.

• Credit risk: Exposures arise from loans and securities, foreign-exchange activity, off-balance-sheet commitments, letters of credit, securities-lending indemnifications and intraday credit required to process client activity. BNY uses internal limits and monitors counterparties, industries, countries and portfolios. Credit approvals escalate through four levels to the CRO; counterparties are rated on an 18-grade probability-of-default scale, and transactions on a five-grade loss-given-default scale reflecting structure, collateral, guarantees and seniority. Risk mitigation includes underwriting discipline, committing capital only where risk-adjusted returns warrant it, diversification through syndications and asset sales, credit enhancements, collateralization and netting. Internal Audit’s Credit Risk Review Group independently reviews loan files and credit ratings. Expected-loss methodologies and inputs are reassessed and updated when improved techniques or data become available.

• Liquidity risk: Liquidity is essential to payment processing and client transaction settlement and clearing. Risks include funding mismatches, difficulty converting investments to cash in stressed markets, inability to issue debt or refinance maturing liabilities, core-deposit runoff and contingent collateral calls. A credit-rating downgrade could accelerate deposit outflows, raise secured-transaction margin requirements, damage the brand and impair refinancing. The Board sets liquidity risk tolerance; ALCO governs execution, senior management implements and reports on the position, and the Balance Sheet Risk Committee oversees independent risk controls. BNY monitors cash, investment-portfolio quality, intraday liquidity and potential funding needs, using stress tests that include the Liquidity Coverage Ratio and Internal Liquidity Stress Testing.

• Model risk: Flawed model design or use, or conditions that invalidate assumptions, could cause operational, market, credit, liquidity or reputational harm. Models support securities valuation, obligor credit assessments, capital planning and liquidity monitoring. Controls include development standards, validation of new models, change controls and lifecycle performance monitoring. BNY assesses model design, controls and underperformance, using an aggregate health metric and thresholds to manage risk at both model and enterprise levels.

• Strategic risk: Execution depends on organic growth, quality solutions, an evolving operating model, technology-enabled products and services that create scale, and attracting and retaining talent while protecting BNY’s financial profile. Rapid market change, disruptive technologies, geopolitical developments and economic slowdowns could leave BNY poorly positioned if it does not anticipate changes or respond to client preferences. Innovation and new businesses, products, complex transactions, acquisitions, divestitures, joint ventures and major investments also require oversight to avoid weakening financial strength or diverting from core strategy.

Other cross-enterprise risks

BNY’s framework also addresses data risk—including failures in data quality, integrity, availability, confidentiality or retention—through governance, protection, quality assessment, scalable architecture and controls, including for new products and AI applications. Fraud controls focus on awareness, identification, assessment and mitigation. Third-party risk is managed across the provider lifecycle through identification, evaluation, mitigation, monitoring and reassessment.

Physical climate effects and transition pressures, including policy, regulatory, technological and preference changes, may affect credit portfolios, operations, strategy and reputation; ESG and climate risks are considered within enterprise risk appetite and limits. Reputational harm arising from BNY or its employees, clients, partners or providers could affect earnings, capital, liquidity, brand and enterprise value. Finally, wars, sanctions, trade disputes, cyber conflicts, tariffs, changing alliances and government policies may disrupt markets and economies, while relationships involving jurisdictions with weaker legal, political or property-rights protections add country risk. BNY monitors geopolitical developments for potential impacts.

Cybersecurity

BNY reported that cybersecurity threats had no material effect on its business strategy or operations in 2024. It nevertheless emphasized that financial services faces increasingly prevalent, severe, and adaptive threats, and that it cannot assure protection against future material incidents. Cybersecurity is a priority that informs resource allocation, operations, and risk management.

BNY’s cybersecurity program follows a three-lines-of-defense model:

• First line: The Information Security Division (ISD), led by the Chief Information Security Officer (CISO), is responsible for threat intelligence, monitoring, incident response, and preparedness.
• Second line: Technology Risk Management and Risk & Compliance provide independent oversight and challenge.
• Third line: Internal Audit reviews the program.

Controls include severity-based incident classification and escalation; employee training, with additional training for higher-risk roles; phishing simulations and cyber exercises; internal and external assessments and penetration testing; and arrangements for external support. BNY’s third-party governance framework assesses service-provider risk and can require contractual protections or additional controls.

Management oversees cybersecurity risk, with Board oversight through the Risk Committee and regular reporting to the Technology Committee and the full Board. Protocols provide for escalation of significant threats and incidents. The management Technology Oversight Committee reviews ISD reports and escalates significant matters; the second-line Technology Risk Committee oversees emerging risks, significant incidents, and remediation plans.

Senior technology-risk leadership changed during 2024: the CIO joined in September and the interim Chief Technology Risk Officer joined in November. BNY stated that both leaders, as well as the CISO, have substantial relevant experience. The section did not identify a specific material cyber incident, financial loss, or quantified cybersecurity spending.

Regulatory environment and capital

BNY is subject to extensive and evolving U.S. and international rules covering banking, liquidity, capital, trading, derivatives, counterparty exposures and resolution. Enhanced oversight of large financial institutions is expected to continue; changes to existing rules, including sustainability-related requirements, could materially affect BNY’s businesses and results.

BNY, as a U.S. systemically important financial institution (SIFI), must maintain a Federal Reserve liquidity buffer based on projected 30-day funding needs, in addition to LCR and NSFR requirements. As of December 31, 2024, the Parent and domestic bank subsidiaries complied with applicable U.S. LCR requirements, and BNY complied with the NSFR minimum of 1.0. LCR rules require unencumbered high-quality liquid assets sufficient for expected net outflows in a 30-day stress period. Separate SIFI requirements include liquidity stress testing, contingency funding plans, risk limits and liquidity buffers. BNY is also subject to annual Federal Reserve CCAR and DFAST stress tests and annual company-run stress tests.

Capital shortfalls can constrain distributions and discretionary bonuses. Undercapitalization at an insured depository institution may trigger progressively tighter operating, management and capital-distribution restrictions; the Federal Reserve may also act against the Parent based on a subsidiary bank’s condition and, in some circumstances, require the Parent to guarantee the bank’s capital-restoration plan.

The Parent relies primarily on dividends, interest and other payments from subsidiaries—including credit extensions from the intermediate holding company (IHC)—to meet its obligations and fund shareholder distributions. Bank-subsidiary dividends are subject to regulatory approval, capital adequacy and recent-earnings and undivided-profits tests, and regulators may restrict payments considered unsafe or unsound. The IHC may be barred from distributing funds if specified capital or liquidity indicators are breached. If Parent resolution becomes imminent, IHC credit lines terminate automatically and amounts outstanding become due, potentially limiting Parent liquidity and its ability to pay dividends or repurchase shares. A custody-bank rule excludes qualifying central-bank deposits from the SLR denominator and related TLAC and long-term-debt measures, subject to a cap linked to fiduciary, custody and safekeeping deposit liabilities.

Loss-absorbing capacity and proposed rules

U.S. G-SIBs must maintain external total loss-absorbing capacity (TLAC) equal to the greater of 18% of risk-weighted assets (RWA) plus applicable CET1 buffers, or 7.5% of total leverage exposure plus a 2% Tier 1 buffer. Minimum external eligible long-term debt is the greater of 6% of RWA plus the G-SIB surcharge, or 4.5% of total leverage exposure. Rules also restrict certain holding-company liabilities and transactions. Foreign jurisdictions impose internal loss-absorbing-capacity requirements on some subsidiaries; BNY SA/NV is subject to EU internal TLAC under CRR2, expected to continue under proposed CRR3, and to institution-specific MREL requirements.

A 2023 U.S. proposal would require a $400,000 minimum denomination for new TLAC/long-term debt, limit the amount of eligible debt with one to two years’ maturity that counts toward requirements to 50%, and modify certain clean-holding-company restrictions. BNY is evaluating the impact. Separately, proposed revisions to large-bank capital rules would replace advanced-approaches credit- and operational-risk models with standardized methods under an expanded risk-based approach and revise market-risk treatment; the changes could also affect TLAC, long-term-debt requirements and G-SIB surcharges. The Federal Reserve expected to work with other agencies on a revised proposal in 2025. Regulators have also proposed changes to G-SIB surcharge indicators. In December 2024 and February 2025, the Federal Reserve said it intended to propose stress-testing framework changes in 2025 and to reduce result volatility and improve model transparency in the 2025 stress test.

Trading, counterparty and derivatives rules

The Volcker Rule restricts proprietary trading and BNY’s sponsorship of, investment in and transactions with covered funds. Classified as a “moderate trading” bank under the 2019 amendments, BNY may tailor its compliance program to its activities and is exempt from annual CEO attestation and quantitative-metrics requirements. Limits generally cap BNY’s ownership at 3% of an individual covered fund and aggregate covered-fund interests at 3% of Tier 1 capital, subject to exemptions; the aggregate limit and capital deduction continue to apply to BNY-sponsored or organized funds.

Federal Reserve single-counterparty credit limits generally cap a covered domestic bank holding company’s aggregate net exposure to an unaffiliated counterparty and its affiliates at 25% of Tier 1 capital, and a U.S. G-SIB’s exposure to a major counterparty at 15%. Breaches generally have a 90-day cure period, during which additional credit transactions are restricted absent a temporary limit increase. BNY is also subject to OTC derivatives conduct, reporting, margin and recordkeeping requirements; The Bank of New York Mellon is registered as a security-based swap dealer.

Resolution planning and creditor exposure

An FDIC rule effective October 1, 2024 changed the resolution-plan submission cycle for covered insured depository institutions affiliated with U.S. G-SIBs, including The Bank of New York Mellon, from three years to two. It expanded required plan content and requires notice of certain extraordinary events within 45 days. BNY’s full 165(d) resolution plan, submitted July 1, 2023, received no deficiencies or shortcomings.

BNY’s single-point-of-entry strategy would place the Parent into bankruptcy while supporting key operating subsidiaries through an IHC. A binding support agreement requires the Parent to transfer intercompany loans and most cash to the IHC and continue transferring cash and other liquid assets. An uncredible plan or failure to remediate deficiencies could result in more stringent capital, leverage or liquidity requirements, restrictions on growth or activities, or required divestitures.

In an insured-bank resolution, the FDIC may transfer assets and liabilities, enforce or repudiate contracts, and apply depositor preference. U.S. depositors and certain administrative claims rank ahead of other unsecured creditors; foreign-branch depositors may recover substantially less. Under orderly liquidation authority for systemically important nonbank entities, the FDIC can use a distinct administrative claims process, depart from strict claim priority and transfer assets or liabilities to third parties or bridge entities. European and U.K. authorities also have resolution powers, including bail-in and restructuring requirements, which may impose losses on creditors and constrain BNY subsidiaries.

Regulatory environment and potential effects

The principal developments described are regulatory rather than financial; this section reports no operating or balance-sheet metrics. Changes across U.S., European and UK regimes could affect BNY’s compliance costs, permitted activities, products, capital and liquidity requirements, governance and reporting obligations.

U.S. banking oversight

BNY is a Federal Reserve-supervised financial holding company. Its continued eligibility depends on maintaining “well capitalized” and “well managed” status and on its U.S. bank subsidiaries maintaining at least a satisfactory Community Reinvestment Act rating. As of Dec. 31, 2024, BNY and its U.S. bank subsidiaries were “well capitalized.” Losing financial-holding-company eligibility could restrict activities and acquisitions. Federal Reserve supervision assesses capital planning and positions, liquidity risk management and positions, and governance and controls; “well managed” status requires at least “Conditionally Meets Expectations” in each component.

Deposits at U.S. banking subsidiaries are insured by the FDIC up to $250,000 per depositor per insured bank, subject to possible termination of coverage in specified circumstances. Large-bank assessments reflect supervisory ratings and forward-looking measures; custody banks may deduct certain qualifying liquid assets from the assessment base, subject to a cap. To recover losses from the 2023 failures of Silicon Valley Bank and Signature Bank, the FDIC’s special assessment took effect April 1, 2024. It is based on estimated uninsured deposits at Dec. 31, 2022, excluding the first $5 billion at the banking-organization level, and initially is collected over eight quarters beginning in Q1 2024. The FDIC may adjust or extend collections or impose a final assessment. BNY began recording estimated accruals and adjustments in noninterest expense in Q4 2023 and continued through 2024.

The Federal Reserve also requires BNY, as a bank holding company, to support its bank subsidiaries financially and managerially, including in distress. Parent loans to banks are subordinated to depositors and certain other bank debt; certain capital-maintenance commitments may receive priority as unsecured claims in bankruptcy. In some circumstances, an insured bank subsidiary may be liable for another’s losses, and BNY could be required to cover impaired capital stock at a national bank subsidiary. Transactions between banks and nonbank affiliates are restricted and generally must be on arm’s-length, market terms. Affiliate credit is generally limited to 10% of a bank’s capital and surplus for any one affiliate and 20% in aggregate, with collateral and additional exposure limits.

The Federal Reserve’s Novel Activities Supervision Program monitors activities involving crypto-assets, distributed ledger technology, complex technology-driven partnerships with nonbanks, and concentrated services to crypto-related entities and fintechs. Bank acquisitions and mergers also require notice or approval, with reviews that consider competition, capital and management, community needs, anti-money-laundering effectiveness and financial stability.

Compliance, technology and sustainability

Anti-money-laundering and Bank Secrecy Act requirements apply across BNY’s banking, broker-dealer, investment-adviser and sponsored-fund activities. They require risk-based controls, customer and beneficial-owner due diligence, training, independent testing and suspicious-activity reporting. The Anti-Money Laundering Act expands enforcement authority and potential sanctions, with some effects dependent on implementing rules. A FinCEN rule finalized Aug. 28, 2024, requires certain investment advisers to establish risk-based AML/CFT programs and monitor and report suspicious activity and currency transactions by Jan. 1, 2026; BNY is implementing a program.

Banking regulators require notice within 36 hours of qualifying significant cybersecurity incidents. SEC rules generally require public disclosure of a material cyber incident within four business days after materiality is determined, as well as annual descriptions of cyber-risk management and oversight. SEC Regulation S-P amendments effective Aug. 2, 2024 require incident-response programs and generally customer notification within 30 days of awareness of unauthorized access or use; BNY has 18 months to comply and is implementing a program. U.S. and EU privacy rules, including GDPR, also apply. The EU AI Act took effect Aug. 1, 2024, with obligations phasing in from Feb. 2, 2025 through Aug. 2, 2027; BNY is implementing applicable requirements. The SEC’s proposed rules addressing conflicts from broker-dealer and adviser use of AI remain under evaluation.

The SEC’s March 2024 climate-disclosure rule is stayed pending litigation. California laws require covered companies to begin greenhouse-gas and climate-risk reporting in 2026. Five BNY EU subsidiaries are in scope of the Corporate Sustainability Reporting Directive (CSRD): BNY SA/NV is scheduled to report in 2025 and four others in 2026. The European Commission’s Feb. 26, 2025 Omnibus proposals would narrow CSRD coverage and delay some reporting; these proposals are not enacted. The package also proposes simplifying and delaying certain Corporate Sustainability Due Diligence Directive requirements. UK climate-risk expectations apply to BNY’s regulated branch and banking subsidiary, and FCA anti-greenwashing rules effective May 31, 2024 require sustainability claims to be fair, clear and not misleading. Certain U.S. state measures also restrict or propose restricting financial-services decisions based on specified sustainability factors.

Markets, investment management and international requirements

SEC rules require covered clearing agencies to establish mandatory clearing policies for eligible U.S. Treasury secondary-market transactions, including specified repo and reverse-repo activity. Compliance is due by Dec. 31, 2026 for eligible cash transactions and June 30, 2027 for eligible repo transactions, subject to exclusions.

Money-market-fund amendments require liquidity fees for institutional prime and institutional tax-exempt funds when daily net redemptions exceed 5% of net assets; allow discretionary fees up to 2% for non-government funds; and raise minimum daily and weekly liquid-asset levels from 10%/30% to 25%/50%. Temporary redemption gates were removed. SEC fund-name amendments expand the 80% investment-policy requirement to additional terms, including growth, value and ESG, with compliance due within 24 or 30 months depending on fund-group size. BNY has launched ETFs under the ETF Rule, which requires disclosures and written controls for custom baskets. BNY is evaluating proposals on adviser outsourcing and service-provider oversight, open-end-fund swing pricing and hard closes, broker-dealer best execution and order-execution disclosures, and an expanded investment-adviser custody rule. The timetable for joint Dodd-Frank incentive-compensation rulemaking is unknown.

EU CRR3/CRD6 took effect July 9, 2024, with Basel 3.1 implementation phased through January 2027. It may change BNY SA/NV’s capital and liquidity requirements and imposes capital-endowment, governance, reporting and supervisory obligations on the Frankfurt branch. CRD6 also restricts certain core banking services to EU clients by non-EU entities unless provided through an authorized EU branch or under an exemption. UK CRR amendments implementing Basel 3.1 are planned to apply from Jan. 1, 2027, affecting BNY’s UK-incorporated bank. BNY’s EU- and UK-domiciled investment firms are subject to investment-firm capital regimes (IFD/IFR and UK IFPR), generally tailored to investment-firm risks.

EU DORA took effect Jan. 17, 2025, requiring ICT risk-management frameworks covering testing, incident response, business continuity and third-party risk; BNY says it has implemented a program designed to meet applicable requirements. UK operational-resilience requirements apply to the London branch and UK-incorporated bank by March 31, 2025, including identifying important business services, mapping resources, setting and testing disruption tolerances, and maintaining communications and supporting policies. AIFMD II, which entered into force Apr. 15, 2024, updates depositary rules and adds loan-origination and liquidity-management frameworks for alternative investment funds; EU member states must implement it by April 2026. AIFMD and UCITS V requirements also govern fund servicing, depositary and custody activities, including recordkeeping despite permitted omnibus custody accounts. Further EU and UK proposals covering investment services, funds, securitisation, derivatives and payments could affect BNY’s securities-services, markets, and investment- and wealth-management businesses.

Risk factors

BNY’s risk profile reflects its role as a global, high-volume custodian and financial-services provider: operational or technology failures can affect clients, counterparties and financial-market infrastructure, while market stress can simultaneously pressure fee revenue, credit quality, liquidity and regulatory capital. The company cautions that its controls, models, business-continuity plans and insurance cannot eliminate these risks, and that actual losses or disruption could be greater than anticipated.

Business model and market sensitivity

Fee-based businesses accounted for 73% of FY2024 total revenue. Fees depend on client activity, assets managed or administered, securities-lending activity and spreads, and market-related services. Weak or volatile markets, withdrawals, poor investment performance, lower transaction volumes, or migration to lower-fee products can reduce assets and revenue. Lower investment-management revenues or other adverse factors could also reduce the fair value of the Investment Management reporting unit and lead to goodwill impairment.

Interest-rate changes, yield-curve movements and the speed of rate changes can affect net interest income, deposit mix, funding costs, client behavior and capital. Rising rates may contribute to lower asset values, deposit outflows or more expensive deposits, higher credit losses and increased accumulated other comprehensive loss (AOCI), reducing tangible common equity and regulatory capital ratios. Falling short-term rates or a flat or inverted curve can compress margins and spread-based revenue. Market volatility also affects securities and seed-capital valuations, investment and wealth-management fees, foreign-exchange trading spreads and volumes, and clearing, settlement, payments and securities-lending activity. A flight to safety could increase BNY’s balance sheet while weakening leverage-based capital measures even as trading and cross-border revenues decline.

AFS unrealized gains and losses affect AOCI, and AFS fair-value changes affect CET1 capital under U.S. capital rules. Market disruption can make valuations less observable and less reliable. HTM classification may constrain sales; if BNY’s intent or ability to hold impaired AFS securities changes, it could have to recognize the full difference between fair value and amortized cost in earnings.

Operations, technology and third parties

BNY processes large volumes of complex transactions across systems, jurisdictions and counterparties. Errors, delays, fraud, control failures, system upgrades or outages can cause client losses, liability, higher costs, lost revenue, regulatory action and reputational damage; BNY has experienced operational errors, delays and disruptions and expects such events to continue. Backup and continuity arrangements may not adequately replace primary systems. An incorrectly transferred digital asset may be impossible to recover.

Cyberattacks are ongoing risks and may remain undetected, be difficult to investigate, or disrupt services and expose confidential data. Remote work, mobile and cloud use, digital-asset initiatives, and attacks on vendors and their downstream providers broaden exposure. Failures at utilities, clearing houses, exchanges, intermediaries or concentrated technology providers could disrupt processing and settlement across interconnected markets. BNY may face claims, reimbursement obligations and regulatory scrutiny, and defenses or insurance may not prevent or fully cover losses. A July 2024 CrowdStrike software update caused widespread system crashes; BNY reported no material impact from that event or similar events to date.

BNY’s growing use of AI, and its reliance on third-party AI tools, create risks involving security, confidentiality, privacy, intellectual property, bias, inaccurate outputs, ethics and regulation. Failure to adopt AI effectively or secure access to technology and computing resources could also weaken competitiveness. Models and risk frameworks may fail under changing conditions or stress; inaccurate data, flawed assumptions, human error or changing correlations can lead to unexpected losses, ineffective hedges, inaccurate reporting or remediation and penalties.

Credit, liquidity and capital

Credit exposures arise from lending, overdrafts, settlement and intraday credit, custody, clearing, trading, securities lending and cash-collateral investments. Clients and counterparties include financial institutions, governments and clearing organizations; concentration and correlated exposures, including commercial real estate—particularly the New York metropolitan area—can magnify losses. Unsecured exposures, falling or illiquid collateral, unenforceable contractual rights, and limits on netting across affiliates or products may increase losses or capital needs. In agency securities lending, BNY may bear a shortfall if collateral and liquidation proceeds are insufficient to replace securities a borrower fails to return; it may also incur losses on certain reverse-repurchase investments of cash collateral. Sub-custodians, particularly in emerging markets, create additional operational, credit and restitution risks. Credit-loss allowances depend on estimates and forecasts that may not capture actual conditions.

Liquidity depends on access to deposits and financial markets to settle client transactions. Deposit outflows, collateral demands, committed-facility draws, rating downgrades or loss of market access could force BNY to obtain more expensive funding, shrink assets or sell assets at a discount, reducing net interest income or capital. Excess inflows can also raise funding costs and enlarge the balance sheet. Regulatory requirements—including LCR, NSFR, TLAC, G-SIB surcharges, resolution planning and foreign-subsidiary liquidity rules—can increase costs and constrain liquidity and capital management. Changes to regulatory models or operational-risk RWAs may affect capital ratios.

BNY is a non-operating holding company dependent on subsidiary distributions and credit extensions from its intermediate holding company (IHC) to meet obligations and fund taxes, repurchases and dividends. Transfers can be restricted by law, regulation, stress or subsidiary needs; liquidity is managed by legal entity, and parent creditors are structurally subordinated to subsidiary creditors. Dividends and repurchases are discretionary and subject to Board, legal, capital-planning and regulatory constraints. A downgrade could increase funding costs, impair market access and prompt counterparties to demand collateral or terminate agreements. Under BNY’s Title I single-point-of-entry resolution strategy, Parent shareholders and creditors could suffer substantial losses, potentially losing their entire investment.

Regulation, execution and external threats

Extensive and changing U.S. and international rules on capital, liquidity, cybersecurity, privacy, data localization, client assets, digital assets, AI, climate and sustainability may increase costs, impose capital or liquidity requirements, restrict distributions, or require BNY to reduce or exit activities. Divergent requirements, sanctions, anti-money-laundering and anti-bribery obligations create compliance and enforcement exposure. BNY stopped originating new Russian banking business after Russia’s 2022 invasion of Ukraine and suspended investment-management purchases of Russian securities; further conflict, sanctions, cyberattacks, tariffs or policy changes could disrupt markets and reduce business.

BNY faces investigations, litigation and regulatory proceedings, which may take years, overlap across jurisdictions and result in costs or losses exceeding recorded accruals or disclosed contingencies. Controls provide reasonable, not absolute, assurance and may be circumvented. Competition for specialized talent and pressure from fintech and other providers may increase costs or impede execution. Acquisitions, alliances, new products and the transition to a platforms operating model may cost more, take longer or deliver less benefit than expected, while integration, legacy liabilities and goodwill impairment could erode transaction value.

Geopolitical conflict, recession, inflation, pandemics, natural disasters and climate events may disrupt BNY, its clients, vendors and markets. Climate impacts could damage facilities—including the headquarters near the Hudson River waterfront—disrupt operations, affect client credit and asset values, and increase provisions. Sustainability initiatives and related investment practices may draw conflicting regulatory, political, client and reputational pressures; climate assessments also rely partly on estimated or lagged data and immature models. Tax-law changes or challenges to tax positions may increase provisions or reduce earnings, and changes in accounting standards or estimates—including for credit losses, goodwill and litigation—could materially affect reported results.

Non-GAAP financial measures

BNY presents supplemental Non-GAAP measures alongside GAAP results. Tangible-basis measures exclude goodwill and intangible assets, net of deferred tax liabilities. Return on tangible common equity and tangible book value per common share are intended to show returns and tangible assets relative to common shares.

BNY also presents revenue, expense, income, earnings per share, return and margin measures that exclude notable items, to align reported measures with management’s view of the businesses. Notable items may include losses from repositioning the securities portfolio; reductions in the fair value of a contingent-consideration receivable; gains and losses on disposals; goodwill impairment; the FDIC special assessment; severance; and litigation reserves. Litigation reserves relate to probable and reasonably estimable loss contingencies and exclude ordinary business-related legal fees.

Other adjusted measures

For Investment Management and performance-fee growth, BNY uses constant-currency measures that apply current-period exchange rates to prior-period revenue, isolating underlying revenue changes from currency movements.

For Investment and Wealth Management, adjusted pre-tax operating margin excludes distribution and servicing expense passed through to third parties. BNY says this adjustment facilitates comparison with industry competitors.

Forward-looking Non-GAAP measures

BNY may discuss forward-looking Non-GAAP measures, including expense targets excluding notable items. It does not reconcile these measures to GAAP because future amounts and their timing cannot be estimated meaningfully or accurately without unreasonable effort; unavailable reconciling information could be significant to future results.

FY2024 performance and adjusted returns

Revenue increased 5% on a GAAP basis and 4% excluding notable items. GAAP noninterest expense declined 4%, while adjusted expense rose 1%. Notable expense items included severance of $240M versus $267M and litigation reserves of $44M versus $94M. The FDIC special assessment reduced expense by $63M in 2024, compared with $632M of expense in 2023—a major reason GAAP and adjusted comparisons differed. Notable items reduced diluted EPS by $(0.23) in 2024 versus $(1.18) in 2023.

Reported returns rose sharply in 2024, while adjusted returns improved more steadily. Average tangible common shareholders’ equity is calculated from average common shareholders’ equity of $36.413B, $35.767B and $36.067B, less average goodwill of $16.316B, $16.204B and $17.060B, and average intangible assets of $2.839B, $2.880B and $2.939B, respectively, with deferred-tax-liability addbacks for tax-deductible goodwill of $1.221B, $1.205B and $1.181B, and for intangible assets of $665M, $657M and $660M.

Year-end equity and common shares

For context, at Dec. 31, 2022 BNY shareholders’ equity was $40.613B, including $4.838B of preferred stock and $35.775B of common shareholders’ equity. Goodwill was $16.150B and intangible assets were $2.901B; tangible common shareholders’ equity, including deferred-tax-liability addbacks, was $18.565B. Common shares outstanding were 808.445M; book value and tangible book value per common share were $44.25 and $22.96, respectively.

Investment and Wealth Management

In 2022, segment GAAP revenue was $3.563B, revenue after distribution and servicing expense was $3.218B, GAAP income before taxes was $47M and adjusted income before taxes was $756M. The 2022 comparison was unusually affected by a $680M goodwill impairment, as well as severance, litigation, a Russia-related revenue reduction, a portfolio repositioning loss and disposal gains. The segment’s 2022 GAAP pre-tax margin was 1% and adjusted margin after distribution and servicing expense was 2%. Adjusted margin excluding notable items was reported as 19% and 23%, respectively.

Investment management and performance fees

Consolidated fees increased 3% reported and 2% in constant currency. The 2023 constant-currency comparison was $3.069B, including an $11M currency impact. Investment and Wealth Management fees also rose 3% reported and 2% in constant currency; the 2023 constant-currency comparison was $3.073B, likewise reflecting an $11M currency impact.

Rate/volume analysis (FTE basis)

In 2024, the rate effect reduced net interest income by $2,294M, largely offset by a $2,261M favorable volume effect. This contrasts with 2023, when a $1,916M favorable rate effect partly offset a $1,084M adverse volume effect: net interest income growth shifted from being rate-driven to facing substantial rate pressure.

2024 vs. 2023 drivers

Interest income growth was led by federal funds sold and resale agreements. The largest expense increases were in repurchase-related funding and interest-bearing deposits. Overall, higher interest rates increased interest income but raised interest expense by more, leaving net interest income nearly flat.

Forward-Looking Statements and Principal Risks

BNY’s forward-looking statements address anticipated financial performance and condition, including fee revenue, net interest income and sensitivity to interest rates; expenses and efficiency savings; liquidity, capital and capital ratios; dividends and share repurchases; taxes; technology investment; strategic initiatives and transactions; and the transition to a platforms operating model. These statements are subject to uncertainty, are not guarantees of future results, and actual outcomes may differ materially. BNY generally undertakes no obligation to update them.

Key risks

• Operations, controls and technology: Processing errors, ineffective risk frameworks or models, control failures, or disruptions to BNY’s systems and third-party providers could cause financial losses, interrupt services, or damage its reputation. Cybersecurity incidents and system failures could disrupt operations or expose information. Developing or using artificial intelligence also presents risks that could impair operations or result in losses.
• Markets, revenue and interest rates: Fee-based businesses generate a substantial majority of BNY’s revenue, leaving results exposed to weaker markets, reduced client activity, underperformance, or shifts in savings and investment preferences. Changes in interest rates can affect profitability and capital. Volatile or illiquid markets may also produce realized or unrealized losses on securities.
• Credit and counterparty exposures: Client, counterparty and concentration exposures—including exposures to major financial institutions and sovereigns—could result in credit losses. Credit-loss reserves may be insufficient if economic conditions deteriorate.
• Regulatory, legal and capital constraints: Extensive regulation, changing rules, regulatory or enforcement actions, and litigation may constrain BNY’s activities or adversely affect results. Failure to meet regulatory capital or liquidity requirements, or “well capitalized” or “well managed” standards, could restrict its activities.
• Parent liquidity and shareholder returns: The non-operating Parent relies on subsidiary dividends and credit extensions from the IHC to meet obligations and fund shareholder returns. Dividends and repurchases remain subject to board discretion, banking regulation, capital planning, Delaware law and preferred-dividend requirements.
• Funding and resolution: Credit-rating downgrades could increase funding costs. Resolution proceedings under Title I or Title II could adversely affect the Parent’s liquidity and financial condition, as well as security holders.
• Strategy, execution and competition: BNY may not realize anticipated benefits from its platforms operating model, strategic transactions or other initiatives. New products and businesses, acquisitions and divestitures, and transformation efforts carry execution and other risks. Competition and reputational harm could also pressure profitability.
• Other external and business risks: Results may be affected by difficulties retaining talent; geopolitical events, war or terrorism; natural disasters, climate-related physical impacts and pandemics; sustainability-related scrutiny or regulation; tax-law changes or challenges to tax positions; and changes in accounting standards.

Glossary and control assessment

BNY’s glossary distinguishes two measures of client activity from assets on its own balance sheet:

• Assets under custody and/or administration (AUC/A) are client assets held or administered for custody purposes. An asset is counted only once even if BNY provides multiple services for it. AUC/A excludes performance and risk analytics, transfer agency, and asset aggregation services.
• Assets under management (AUM) are client-owned or customer assets managed actively or passively, including hedges supporting customer liabilities. The related assets and liabilities are not on BNY’s balance sheet.

The glossary also defines expense categories: revenue-related costs; investments in growth, infrastructure, and efficiency; employee merit costs; and efficiency savings, which may affect multiple expense categories. Other banking and risk terms include economic capital—capital held for potential losses over a one-year solvency horizon; high-quality liquid assets (HQLA)—unencumbered assets expected to convert to cash with little or no loss in a liquidity stress; G-SIB status; investment-grade thresholds; and credit and debit valuation adjustments (CVA/DVA) on OTC derivatives. Repurchase and reverse-repurchase agreements are described as securities transactions used for short-term funding or investment.

As of December 31, 2024, management assessed internal control over financial reporting under the COSO 2013 framework and concluded that controls were effective. KPMG LLP, the independent auditor of BNY’s 2024 financial statements, also issued a report on the effectiveness of internal control over financial reporting.

KPMG concluded that BNY maintained effective internal control over financial reporting in all material respects as of December 31, 2024, and issued unqualified opinions on the consolidated financial statements for the years ended December 31, 2024, 2023, and 2022. The report identified no material weakness or audit qualification. KPMG cautioned that internal controls provide reasonable, not absolute, assurance, may not prevent or detect every misstatement, and may become less effective in future periods. The report is dated February 27, 2025.

BNY consolidated financial statements — FY2024

BNY’s FY2024 revenue increased, while lower bank assessment charges drove a decline in noninterest expense. Net income rose 37.5% year over year. In contrast, operating cash flow fell sharply, largely reflecting cash outflows from changes in trading assets and liabilities.

Results

Total revenue grew 5.2%; fee and other revenue rose 7.2%. Investment services fees were $9.419 billion versus $8.843 billion, investment management and performance fees were $3.139 billion versus $3.058 billion, and FX revenue was $688 million versus $631 million. Net interest income edged down 0.8% despite higher interest income, as interest expense also increased substantially. Noninterest expense declined 4.5%, mainly because bank assessment charges fell to $36 million from $788 million; staff expense rose to $7.130 billion from $7.095 billion, and software and equipment expense rose to $1.962 billion from $1.817 billion.

Comprehensive income

The FY2022 OCI loss largely reflected losses on available-for-sale securities.

Balance sheet and capital

The held-to-maturity portfolio’s fair value was below its amortized cost, indicating unrealized valuation exposure. FY2024 capital returns included $3.064 billion of treasury stock acquired and $1.348 billion of common cash dividends, or $1.78 per share.

Cash flow

Operating cash flow was pressured in part by a $5.639 billion outflow from changes in trading assets and liabilities, compared with a $436 million inflow in FY2023. Financing cash inflow included a $9.895 billion increase in deposits, $5.737 billion of net proceeds from long-term debt issuance, and share repurchases. Capital expenditures comprise purchases of premises and equipment and capitalized software.

Accounting change: FY2023 and FY2022 comparative results, and Dec. 31, 2023 balances, were retrospectively restated following adoption of ASU 2023-02, applying the proportional amortization method to renewable-energy investments.

BNY — Summary of Significant Accounting and Reporting Policies

BNY is a global financial-services company operating through Securities Services, Market and Wealth Services, and Investment and Wealth Management. Its financial statements are prepared under U.S. GAAP and prevailing industry practices. Significant estimates and judgments include the allowance for credit losses (ACL), goodwill and other intangible-asset valuations, and litigation and regulatory contingencies. These depend on assumptions about future economic and market conditions; actual outcomes may differ materially. ACL and impairment testing are identified as critical estimates because they involve complex, subjective judgments.

Credit losses and financial assets

BNY estimates expected credit losses over the expected contractual life of financial instruments using quantitative models, supplemented by management’s qualitative assessment. Assets are generally evaluated collectively when they share risk characteristics and individually when they do not. Most financial assets use probability-of-default methods; discounted-cash-flow and loss-rate approaches may also apply. Except for specified assets and portfolios, forecasts use weighted baseline, upside, and downside economic scenarios. The initial outlook generally spans several months to two years for each economic variable, followed by reversion toward long-term historical averages. Scenarios and weights are updated quarterly, making ACL sensitive to economic assumptions and management judgment. Qualitative adjustments address risks not fully captured by models, including concentrations and scenario sensitivity.

Loan and lending-commitment allowances include pooled estimates for commercial and institutional credits, commercial real estate, and residential mortgages, as well as specific allowances for individually evaluated loans of $1 million or more that no longer share risk characteristics with other loans. Commercial and institutional estimates incorporate borrower and facility ratings, probability of default, loss given default, expected exposure at default, and expected use of unfunded commitments. Higher-risk exposures are reviewed quarterly and borrower ratings at least annually. Commercial real-estate estimates consider collateral, maturity, geography, property type, and projected property values and income. Mortgage models incorporate loan characteristics, prepayments, defaults, loss severity, historical losses, and forecasts through contractual maturity. Individually evaluated losses are measured against discounted expected cash flows or, for collateral-dependent loans, collateral fair value.

For available-for-sale debt securities, identified credit losses are recorded through an allowance and provision, capped at the shortfall between fair value and amortized cost; no allowance is recorded when fair value exceeds amortized cost. Held-to-maturity securities use a similar multi-scenario approach, with structured securities modeled individually. U.S. Treasury and certain agency and other qualifying securities are not currently subject to expected-credit-loss estimates but are monitored. If BNY intends to sell, or is more likely than not required to sell, a debt security before recovering its cost basis, it writes the security down to fair value and recognizes credit and non-credit losses in earnings.

Securities purchased under resale agreements, reverse repos, margin lending, and securities-lending indemnifications are generally collateralized; reverse repos are continuously overcollateralized with collateral replenished as needed. These transactions generally have minimal credit risk and no allocated ACL, although BNY estimates losses on any uncollateralized portion. BNY purchased no financial assets with more-than-insignificant credit deterioration in 2024 or 2023 and held none at either year-end. Short-term accounts receivable have historically not generated significant credit losses.

Loans are generally carried at amortized cost, net of unearned income and deferred fees and costs; loans held for sale are carried at the lower of cost or fair value. Commercial loans generally enter nonaccrual status at 90 days past due or when collectability is doubtful; residential first- and second-lien mortgages are individually evaluated and placed on nonaccrual at 90 days delinquent. Accrued unpaid interest is reversed upon nonaccrual, and write-offs occur when assets are considered uncollectible.

Investments, securities, and consolidation

At Dec. 31, 2024, BNY’s equity-method investments included 50% of CIBC Mellon Trust Company, with a book value of $583 million, and 20% of Siguler Guff, with a book value of $228 million. Equity-method accounting generally applies to investments below majority ownership when BNY has at least 20% ownership or significant influence. Other-than-temporary declines reduce carrying value to fair value.

Available-for-sale debt securities are carried at fair value, with unrealized gains and losses generally recorded in OCI; held-to-maturity securities are carried at amortized cost less expected credit losses; and trading securities are carried at fair value, with realized and unrealized changes recognized in earnings. Nonconsolidated equity securities are generally fair-valued through earnings, subject to specified cost and measurement alternatives. Foreign-currency transaction effects are recorded in foreign-exchange revenue, while translation effects for foreign entities generally enter OCI.

BNY consolidates a variable-interest entity when it has both power over the activities that most affect economic performance and potentially significant exposure to the entity’s losses or benefits, and reassesses when relevant contractual arrangements or interests change. Other entities are generally consolidated when BNY controls financial and operating policies, typically with at least 50% voting ownership. Changes in the fair value of contingent purchase consideration are recorded in other noninterest expense; changes in contingent consideration receivable are recorded in investment and other revenue.

Other significant accounting policies and judgments

Effective in 2024 and applied retrospectively, qualifying renewable-energy investments through limited liability companies are accounted for using the proportional amortization method rather than the previous equity-method approach using hypothetical liquidation at book value. Renewable-energy and affordable-housing tax-credit investment performance is reflected net in the income-tax provision.

Goodwill and indefinite-lived intangible assets are tested annually or when impairment indicators arise. Legacy leveraged leases entered into before Dec. 31, 2018, remain under prior accounting guidance unless modified; their income recognition depends on significant assumptions. Lease assets and liabilities are based on discounted future minimum payments, and right-of-use assets are assessed for impairment when indicators arise.

Revenue-recognition judgments can defer or constrain fees. Performance fees are recognized only when earned and determinable; amounts exposed to clawbacks are excluded until collection is sufficiently certain, and portfolios may need to recover prior underperformance before fees are earned. Outsourcing implementation fees and eligible setup costs are generally recognized or amortized over the service relationship; remaining deferred amounts are recognized if a contract terminates prematurely. Seed-capital investments are generally carried at fair value, with unrealized gains and losses recorded in investment and other revenue.

The U.S. pension plans and BNY’s largest foreign plan, in the U.K., have frozen benefit accruals. Actuarial gains and losses above 10% of the greater of the projected benefit obligation or market-related plan-asset value are generally amortized over active employees’ future service; for frozen plans, qualifying amounts are amortized over participants’ average future life expectancy, capped at 15 years. The market-related value of plan assets smooths actual-versus-expected returns over five years.

Stock-based compensation is generally recorded in staff expense over the vesting period, with expense beginning when employees first become retirement-eligible for grants with retirement-triggered vesting. BNY estimates forfeitures. Certain performance share units with Compensation Committee payout discretion are classified as equity and marked to market through earnings during vesting; awards with market conditions use grant-date fair value, recognized over the service period subject to service being rendered.

Derivatives are carried at fair value and generally reported net by counterparty after eligible collateral under enforceable netting agreements. Trading-derivative gains and losses generally affect foreign-exchange or investment and other revenue. Non-trading derivatives are used primarily for asset/liability management and may qualify as fair-value, cash-flow, or net-investment hedges. Hedge relationships must be documented, highly effective, and monitored at least quarterly. Fair-value hedge changes generally enter earnings; cash-flow hedge changes initially enter OCI and are reclassified when the hedged item affects earnings. If a forecast transaction ceases to be probable, the related cash-flow hedge amount in OCI is reclassified immediately to earnings.

BNY’s EPS methodology changed from periods before 2024: stock-based awards with nonforfeitable dividend rights had been treated as participating securities under the two-class method. Basic EPS includes vested awards whose recipients met vesting or retirement-eligibility requirements; diluted EPS applies the treasury-stock method to dilutive equity awards. Cash is defined as cash and due from banks. Distributions from equity-method investees are operating cash inflows, while excess returns are investing cash flows. Severance is recognized when management commits to a separation action and the liability can be reasonably estimated.

Accounting changes and new accounting guidance

ASU 2023-02 — tax-credit investments

BNY adopted ASU 2023-02 on Jan. 1, 2024, applying it retrospectively to prior periods. For eligible renewable-energy tax equity investments, proportional amortization increased investment and other revenue and income tax expense; the investments are recorded in other assets.

Income-statement restatement ($ millions; previously reported → restated):

The increase in 2022 tax expense exceeded the pretax income increase, reducing restated net income.

EPS attributable to common shareholders:

Dec. 31, 2023 balance-sheet restatement ($ millions; previously reported → restated):

ASU 2023-07 — segment reporting

BNY adopted ASU 2023-07 on Dec. 31, 2024; adoption had no material effect on business-segment disclosures. The standard requires disclosure of significant expenses regularly provided to the chief operating decision maker (CODM) and included in segment profit measures, as well as the CODM’s role and use of those measures in assessing performance and allocating resources.

SAB 122 — safeguarding crypto-assets

In January 2025, SEC staff issued SAB 122, rescinding SAB 121’s guidance to recognize a corresponding asset and liability for client crypto-assets safeguarded on platforms. BNY early adopted SAB 122 retrospectively as of and for FY 2024, with no balance-sheet impact. BNY will recognize a liability for safeguarding-related risk of loss when a loss contingency is probable and reasonably estimable.

Acquisitions and dispositions

On Nov. 1, 2024, BNY acquired all ownership interests in Archer Holdco, a technology-enabled managed-account solutions provider serving the asset and wealth management industry, for cash. The acquisition was included in the Securities Services segment and generated non-tax-deductible goodwill, software, and a customer-contract intangible asset.

At Dec. 31, 2024, contingent acquisition consideration payable had a fair value of approximately $5 million, with estimated payments of $0 million to $5 million over the next year. BNY paid $14 million of contingent consideration during 2024 and recorded a $3 million decrease in contingent earnout payables in other expense. Contingent consideration receivable had a fair value of approximately $15 million, with estimated receipts of $5 million to $25 million over the next three years; BNY received $18 million during 2024.

BNY’s 2022 dispositions included:

• Alcentra: Sold on Nov. 1, 2022, for $350 million cash at closing plus contingent consideration tied to performance thresholds. The sale resulted in an $11 million pre-tax loss and a $40 million after-tax loss, and $434 million of related goodwill was removed. At Oct. 31, 2022, Alcentra had $32 billion of AUM, concentrated in credit strategies.
• HedgeMark: Sold on Aug. 1, 2022, producing a $37 million pre-tax gain. BNY retained an equity interest in the buyer, and $13 million of related goodwill was removed from BNY’s consolidated balance sheet.

Securities portfolio

BNY’s securities portfolio grew in fair value during 2024, while its amortized cost also increased. Figures are at December 31.

BNY said most unrealized losses reflected interest rates rising since securities were purchased—or, for transferred securities, since transfer—rather than credit deterioration. The 2024 AFS presentation includes hedge-related portfolio-level basis adjustments in amortized cost, so reported unrealized gains and losses are net of hedges.

AFS securities in continuous unrealized-loss positions without an allowance had a fair value of $59.461B and losses of $1.831B, compared with $62.134B and $4.286B in 2023. For securities in loss positions for 12 months or more, fair value declined to $35.333B from $53.761B, and losses declined to $1.490B from $4.174B.

In 2024, BNY transferred U.S. Treasury securities and collateralized loan obligations with $4.0B aggregate amortized cost and $3.7B fair value from AFS to HTM, reducing interest-rate effects on accumulated other comprehensive income. Year-end HTM amortized cost was $48.596B, with a $4.576B net unrealized loss. HTM holdings were overwhelmingly rated AAA/AA-; the small non-agency residential mortgage-backed securities balance had lower ratings, and other debt securities were unrated.

Securities gains and losses

FY2022 losses included $514M of “Other” losses, primarily from portfolio repositioning: $337M on state and political subdivision securities and $177M on corporate bonds. In 2024, the largest type-specific losses were $46M on non-U.S. government securities and $24M on U.S. Treasuries; non-agency residential mortgage-backed securities generated $24M of gains.

Maturities and yields

At December 31, 2024, securities in the maturity distribution had a carrying amount of $136.627B. The overall tax-equivalent yield was 3.08%, based on amortized cost and excluding related hedging derivatives.

AFS securities’ total yield was 3.54%, versus 2.22% for HTM. Mortgage-backed securities and other structured holdings do not have contractual maturities represented in these buckets.

Pledged assets and collateral activity

Of 2024 pledged assets, $117B was securities, $15B loans, $5B trading assets and $1B interest-bearing bank deposits. Pledged securities included $88B supporting potential Federal Reserve Discount Window borrowing and $10B supporting Federal Home Loan Bank borrowing. The increase in collateral received and already sold or repledged indicates materially greater collateral-intermediation activity.

Loans and portfolio composition

BNY’s loans, net of unearned income, increased 7.0% to $71.570B at Dec. 31, 2024. The credit-profile table separately reports loans excluding overdrafts and accrued interest receivable.

Overdrafts primarily reflect daily custody and securities-clearance exposures, generally repaid within two business days.

Credit costs and asset quality

Provision for loan and lending-related commitment losses declined to $59M in 2024 from $131M in 2023; it was $9M in 2022. These figures exclude provision for other financial instruments: $11M in 2024, a $12M benefit in 2023, and $30M in 2022.

2024 charge-offs were primarily CRE ($82M); $1M of recoveries brought net charge-offs to $83M. The ending CRE allowance was $315M, comprising $265M for loan losses and $50M for commitments. Collateral-dependent loans had $258M of collateral value. Past-due balances fell primarily because $339M of financial-institution loans that were past due in 2023 were collected.

Portfolio characteristics and concentrations

Credit exposure is concentrated in secured, relationship-oriented lending, with risks varying by portfolio. Financial-institution loans were 96% investment grade, 67% secured, and 84% due within one year. Wealth-management loans are generally secured by investment or custody accounts and marketable assets. Margin loans are secured by marketable securities; borrowers must maintain daily collateral above 100% of loan value, and BNY says losses have been rare. Capital-call loans are secured by private-equity fund investors’ commitments and funds’ capital-call rights.

CRE lending focuses on experienced owners and moderate leverage supported by existing cash flows, but also includes construction and renovation loans. The 2024 CRE portfolio included $4.087B of investment-grade and $2.695B of non-investment-grade loans. Wealth-management mortgages are primarily interest-only, adjustable-rate loans to high-net-worth borrowers; weighted-average loan-to-value at origination was 61%, and less than 1% were past due. Mortgage geographic concentrations were California 21%, New York 14%, Florida 11%, Massachusetts 8%, and other locations 46%. Lease-financing exposure was entirely investment grade or equivalent and backed by diversified assets; residual-value exposure was concentrated in real estate and large-ticket transportation equipment, primarily in Germany and the U.S.

Loan modifications

In 2024, BNY modified five CRE loans with $212M of recorded investment and $20M of unfunded commitments, generally extending maturities and sometimes changing rates or payments. Before year-end, $118M of these loans was repaid and $16M of commitments was canceled. BNY also modified four residential mortgage loans totaling $1M; $1M of modified residential mortgage loans was over 90 days past due at year-end. In 2023, BNY modified two CRE loans totaling $71M and six residential mortgage loans totaling $2M.

Operating leases

Operating-lease obligations were $1.321B at Dec. 31, 2024, supported by $1.076B of right-of-use assets; the comparable 2023 balances were $1.356B and $1.125B. Average remaining lease term was 9.0 years and the discount rate was 3.50%, versus 9.4 years and 3.11% in 2023. Lease expense rose to $242M in 2024 from $224M in 2023 ($233M in 2022). Total lease-liability payments were $1.538B, including $204M due in 2025 and $669M due in 2030 and thereafter; imputed interest was $217M.

Goodwill

Net goodwill increased to $16.598B at Dec. 31, 2024, from $16.261B at Dec. 31, 2023. The 2024 movement included $426M from an acquisition and $89M of adverse foreign-currency translation; business realignment had no consolidated impact.

At Dec. 31, 2024, consolidated gross goodwill was $17.278B, less $680M of accumulated impairment losses. Net goodwill at Dec. 31, 2023 had increased from $16.150B at Dec. 31, 2022, primarily due to $111M of favorable currency translation.

BNY recorded no goodwill impairment in 2024. The Investment Management reporting unit, with $6.0B of allocated goodwill, was tested quarterly; in the Dec. 31 test, estimated fair value exceeded carrying value by approximately 11%, using a 10.5% discount rate. The annual Q2 test of the other six reporting units used a 10% discount rate and found their fair values substantially above carrying values. Valuations depend on assumptions about assets under management and their mix, market values, operating margins, and long-term growth. BNY cautioned that changes in assumptions or discount rates could result in a material non-cash impairment. A prior $680M non-cash goodwill impairment was recorded in Q3 2022; it did not affect liquidity, tangible common equity, or regulatory capital ratios.

Intangible assets

Net intangible assets were $2.851B at Dec. 31, 2024, compared with $2.854B at Dec. 31, 2023. 2024 additions included $53M from an acquisition; amortization was $50M, and currency translation reduced balances by $6M.

At year-end 2024, amortizable intangible assets had a $1.643B gross carrying amount, $1.368B of accumulated amortization, and a $275M net carrying amount, with an 11-year remaining weighted-average amortization period. Corresponding 2023 figures were $1.605B, $1.331B, and $274M.

Indefinite-lived intangible assets were $2.576B net at Dec. 31, 2024, compared with $2.580B in 2023. The 2024 balance comprised $1.291B of tradenames and $1.285B of customer relationships. These assets are tested annually, or more often if impairment indicators arise.

Other assets

BNY’s other assets declined slightly year over year. Accounts receivable—which includes unsettled securities sales and maturities—accounted for the largest decrease among the listed components, while tax credit investments, software, and prepaid pension assets increased.

Investment details and tax credit commitments

Non-readily marketable equity securities carried under the measurement alternative, and included in other equity investments, had a carrying value of $413M at year-end 2024, compared with $479M a year earlier. Observable price changes are recorded in investment and other revenue. Adjustments were net downward $1M in 2024 (upward $1M and downward $2M), versus net upward $11M in 2023 (upward $52M and downward $41M) and $117M in 2022 (upward $125M and downward $8M). Life-to-date net upward adjustments totaled $281M.

Tax credit investments primarily support affordable housing under Community Reinvestment Act requirements and renewable energy projects. BNY adopted ASU 2023-02 for eligible renewable energy investments on Jan. 1, 2024. Tax credit and other tax benefits recognized, and related amortization expense included in the provision for income taxes, were:

Future funding commitments, recorded in other liabilities, rose to $951M at year-end 2024 from $780M at year-end 2023.

NAV-valued investments and time deposits

Investments valued using net asset value (NAV) had fair value of $152M and unfunded commitments of $59M at year-end 2024, compared with $153M and $42M, respectively, at year-end 2023. Private equity investments represented $137M of fair value and $59M of unfunded commitments, versus $143M and $42M a year earlier. These primarily Volcker Rule-compliant SBIC investments have no redemption rights; distributions depend on liquidation of underlying investments, generally over their 10-year lives. NAV-valued seed capital was $7M, compared with $3M, and is generally redeemable on request, subject to underlying fund liquidation and notice periods of up to seven days.

Time deposits of $250,000 or more increased to $2.1B at Dec. 31, 2024, from $1.5B a year earlier. Scheduled maturities of total time deposits were $4.1B in 2025, $557M in 2026, $330M in 2027, $361M in 2028, and $251M in 2029; none were scheduled after 2029.

Contract revenue

BNY’s fee revenue is largely variable, moving with assets under custody and administration (AUC/A), assets under management (AUM), client transaction activity, securities-lending volumes and spreads, and product mix. Most Securities Services and Market and Wealth Services revenue is recognized over time; transaction-based investment services fees are generally recognized on the trade date. Investment management fees depend on AUM and contractual fee schedules, while performance fees are recognized when determinable at the end of the measurement period. Revenue is therefore exposed to market levels, client activity, asset mix, and investment performance against benchmarks.

Contract revenue by segment

($M; ASC 606)

Contract revenue increased about 5.4% in 2024.

Contract revenue by category

($M)

Investment services fees were the largest contract-revenue category.

Total fee and other revenue by segment

($M; includes revenue outside ASC 606)

The 2024 increase was concentrated in Securities Services and Market and Wealth Services. Investment and Wealth Management revenue rose from 2023 but remained below 2022. Revenue outside ASC 606 was $1,449M in 2024, compared with $1,165M in 2023 and $952M in 2022. Segment figures are on an internal management basis; prior years were revised for business-line realignments, and Other was restated for adoption of renewable-energy investment accounting guidance.

Contract balances and costs

BNY recognized $116M of 2024 revenue that had been included in contract liabilities at year-end 2023. Amortization of capitalized sales incentives was $14M in 2024, $16M in 2023, and $19M in 2022. No unsatisfied performance obligations are disclosed beyond those covered by ASC 606 practical expedients.

Net interest income

($M; fiscal years)

Interest income rose 24.0% in 2024, but higher funding costs left net interest income down about 0.8%. Interest income on federal funds sold and resale agreements was $10,915M, versus $7,141M in 2023 and $1,200M in 2022; related repurchase-agreement expense was $9,974M, versus $6,699M and $934M, respectively. Deposit interest expense was $8,647M in 2024, compared with $7,124M in 2023 and $1,587M in 2022.

Income taxes

The effective tax rate was 26.9% in FY2022. FY2024’s rate included a 1.6 percentage-point effect from state and local taxes and a 1.3-point effect from foreign operations, partly offset by tax credits (1.3 points) and tax-exempt income (0.6 points). Prior-year tax provisions, domestic pretax income, deferred tax liability, and effective tax rates were retrospectively restated following adoption of ASU 2023-02, which applies proportional amortization to eligible renewable-energy tax-credit investments.

Deferred taxes and uncertain tax positions

BNY recorded a $135M valuation allowance: $101M related to U.S. foreign tax credit carryforwards beginning to expire in 2029, and $34M related to unrealized capital losses. The company concluded realization of these amounts was more-likely-than-not not to occur; it expects to realize its remaining deferred tax assets based on historical results and forecasts. Approximately $1.4B of foreign-subsidiary earnings remain permanently reinvested abroad; estimated tax upon repatriation is up to $170M.

A release of the full $109M uncertain-tax-position reserve would benefit future effective tax rates. BNY said examination-related adjustments could reduce reserves by about $25M within 12 months.

Long-term debt

At year-end 2024, long-term debt also included $28.006B of fixed-rate senior debt and $1.226B of floating-rate senior debt. Debt maturities total $20.7B over 2025–2029, creating substantial near-term refinancing and funding requirements:

Variable interest entities

BNY has interests in customer-funded investment-management funds, earning management fees and, in some cases, performance fees; it may also provide start-up or seed capital. It invests as well in qualified affordable-housing and renewable-energy projects structured as VIEs, with returns primarily from tax credits.

Consolidated investment-management VIEs

Assets of consolidated VIEs are available only to satisfy the VIEs’ liabilities and investors’ liquidation requests, including requests related to BNY seed capital. BNY provided no support beyond its contractual requirements, and creditors of these VIEs have no recourse to BNY’s general credit.

Non-consolidated VIEs

These VIEs primarily relate to affordable-housing and renewable-energy investments.

Maximum loss exposure is limited to BNY’s investments in these VIEs and its unfunded commitments to them.

Common equity and capital returns

At Dec. 31, 2024, BNY had 717.680268 million common shares outstanding. In July 2024, it raised its quarterly common dividend by 12%, from $0.42 to $0.47 per share, beginning in Q3. Under the $5.0 billion repurchase authorization announced in January 2023 and the additional $6.0 billion authorization announced in April 2024, BNY repurchased 48.9 million shares during FY2024 at an average $62.70 per share, for $3.1 billion. Future repurchase pace depends on market conditions, share price, capital and liquidity, performance, alternative uses of capital and regulatory constraints.

Preferred equity

Preferred shares outstanding and carrying value were unchanged from Dec. 31, 2023 to Dec. 31, 2024.

All series are noncumulative perpetual preferred stock with a $100,000-per-share liquidation preference. Series A pays the greater of three-month CME Term SOFR plus 0.565% or 4.000%. Series F pays 4.625% until September 2026, then SOFR plus 3.131%; Series G pays 4.700% until September 2025, then the five-year Treasury rate plus 4.358%; Series H pays 3.700% until March 2026, then the five-year Treasury rate plus 3.352%; and Series I pays 3.750% until December 2026, then the five-year Treasury rate plus 2.630%.

FY2023 Series D dividends included approximately $10 million of deferred fees realized on its December 2023 redemption. If required preferred dividends are not paid, common dividends and repurchases are generally restricted, subject to exceptions. Preferred redemptions require Federal Reserve approval; specified series become redeemable from September 2025 through December 2026, while Series A is redeemable at the Parent’s option.

Regulatory capital

BNY and its U.S. bank subsidiaries were “well capitalized” at both year-ends. Capital ratios were:

Consolidated SLR fell 80 basis points year over year; The Bank of New York Mellon remained above its 6% well-capitalized SLR threshold.

Capital above applicable thresholds at Dec. 31, 2024 was:

Failure to meet regulatory capital standards could constrain BNY’s activities and harm its financial condition. Temporary equity, representing the redemption value of redeemable noncontrolling interests from equity-classified share-based payment arrangements, was $87 million at Dec. 31, 2024, compared with $85 million a year earlier.

Other comprehensive income

BNY reported FY2024 other comprehensive income (OCI) of $235M after tax, down from $1.073B in FY2023. The decrease primarily reflected smaller gains on available-for-sale (AFS) securities and a foreign-currency translation loss. FY2022 included a substantial AFS-related OCI loss.

The FY2024 AFS amount included $365M of gains arising during the year and a $64M reclassification adjustment. FY2023 included $829M of gains arising and a $52M reclassification adjustment; FY2022 included a $3.245B loss arising, partly offset by a $338M reclassification adjustment. Foreign-currency translation includes the effect of hedges of net investments in foreign subsidiaries.

Accumulated other comprehensive loss

Accumulated OCI attributable to BNY shareholders improved by $237M during FY2024, to an accumulated loss of $4.656B at December 31, 2024, from $4.893B at December 31, 2023. The accumulated OCI table’s $237M change differs from the $235M total OCI reported in the statement.

Accumulated OCI also includes amounts for AFS securities transferred to held-to-maturity (HTM). These securities had unamortized pre-tax AFS gains/(losses), before hedges, of $(193)M at December 31, 2024, compared with $104M at December 31, 2023 and $168M at December 31, 2022. Related hedged-item basis adjustments were $188M, $(49)M and $(67)M, respectively. The after-tax accumulated OCI impact for the transferred securities, inclusive of hedges, was $(4)M, $42M and $78M, respectively.

Stock-based compensation

BNY’s restricted stock unit (RSU) compensation expense increased in FY2024. Related income-tax benefits rose as well. Retirement-eligibility vesting expense declined from FY2023.

At December 31, 2024, BNY had 17,460,278 non-vested performance stock units (PSUs) and RSUs, up from 16,456,716 a year earlier. Their weighted-average grant-date fair value was $54.49 per award, compared with $51.20 at December 31, 2023.

BNY expects to recognize $434 million of unrecognized compensation cost over a weighted-average period of 2.3 years.

Performance awards and plans

Executive Committee target PSU grants were 851,939 in FY2024, compared with 577,549 in FY2023 and 513,101 in FY2022. Awards are measured over three years: 70% depends on return on tangible common shareholders’ equity (ROTCE) and 30% on total shareholder return (TSR). Total vesting is capped at 150% of target, and the final payout remains subject to Compensation Committee discretion. Because of that discretion, the ROTCE portion is marked to market in earnings; the TSR portion’s grant-date fair value is recognized over the service period, provided service is rendered.

The April 2023 long-term incentive plan had capacity to issue 37,099,283 new awards at December 31, 2024, all as restricted stock or RSUs. Subsidiary plans also issue restricted subsidiary shares, generally vesting over three to five years; BNY may repurchase those shares at a price generally based on subsidiary fair value.

BNY granted or had outstanding no stock options in FY2024, FY2023 or FY2022. In FY2022, option exercises generated $15 million of intrinsic value, $9 million of cash proceeds, and a $3 million excess tax benefit.

Defined benefit plans

BNY’s defined benefit pension plans cover approximately 6,400 U.S. employees and 18,400 non-U.S. employees. U.S. defined benefit accruals were frozen in 2015. Accruals under the largest U.K. plan were frozen at year-end 2018, and affected employees moved to defined contribution benefits beginning Jan. 1, 2019; most U.K. employees now earn benefits only through defined contribution plans.

Funded status at Dec. 31

The accumulated benefit obligation for all defined benefit plans decreased to $4.2B from $4.5B. Higher year-end discount rates—5.72% for domestic plans (up from 5.25%) and 5.15% for foreign plans (up from 4.44%)—primarily drove 2024 actuarial gains on pension obligations. In 2023, lower discount rates drove domestic and foreign actuarial losses, with higher assumed inflation also contributing to foreign losses.

Domestic pension assets earned an actual return of $179M in 2024, compared with $501M in 2023; foreign pension assets had a $29M loss, compared with a $43M gain.

Net periodic benefit (credit) / cost

Foreign healthcare had no material periodic cost. At year-end 2024, pre-tax accumulated pension actuarial losses recognized in AOCI were $1.637B for domestic plans and $244M for foreign plans.

Contributions, benefit payments, and healthcare assumptions

BNY expects 2025 contributions of $11M to domestic pension plans and $6M to foreign pension plans; expected healthcare contributions are $9M domestic and less than $1M foreign.

Domestic healthcare cost assumptions for 2025 are 8.90% for pre-Medicare costs and 9.80% for Medicare costs; both are expected to decline to 4.50% by 2035.

Pension plan assets

The pension plans held no BNY common stock. Assets measured using NAV were $319M, up from $283M in 2023: $232M in funds of funds, $67M in venture capital and partnership interests, and $20M in other contracts. Funds of funds generally allow monthly redemption with 30–45 days’ notice. Venture capital and partnership interests have no redemption rights and depend on liquidation of underlying investments. No plan assets were classified as Level 3 in the disclosed fair-value hierarchy.

Defined contribution plans

The U.S. 401(k) plan matches 100% of employee contributions up to 7% of eligible base pay, subject to a $16,000 participant limit. Eligible employees may also receive a $750 annual non-elective contribution.

BNY is not permitted to contribute to the ESOP.

Parent Corporation financial information

The Parent Corporation’s income is primarily derived from dividends paid by its bank and non-bank subsidiaries. In FY2024, higher subsidiary dividends drove revenue and net income above FY2023, while the Parent continued substantial share repurchases, dividends and debt issuance and repayment.

Parent-only income statement

USD millions; FY2022 included as the third year presented.

Parent-only balance sheet

USD millions, at December 31.

Parent-only cash flows

USD millions.

Capital, liquidity and structural considerations

Bank subsidiaries declared dividends of $4.3 billion in 2024, $3.5 billion in 2023 and $1.0 billion in 2022. After December 31, 2024, U.S. bank subsidiaries could pay the Parent approximately $82 million without regulatory waiver; Parent non-bank subsidiaries held approximately $3.8 billion of liquid assets at year-end. The board authorized up to $5.0 billion of repurchases in January 2023 and added a further $6.0 billion authorization in April 2024, in addition to any remaining capacity under the earlier plan.

Under the single-point-of-entry resolution arrangement, the Parent is required to transfer cash and other liquid assets to the intermediate holding company (IHC), while retaining amounts for near-term needs. In ordinary conditions, IHC subordinated funding and a committed credit line are intended to support Parent obligations, including dividends, repurchases and debt service. If severe distress makes Parent resolution imminent, the credit line automatically terminates and amounts outstanding become due. The Parent must then transfer most remaining assets to the IHC, except subsidiary stock and a reserve for bankruptcy expenses; this could leave it unable to meet obligations and lead to an earlier bankruptcy filing.

Bank-subsidiary dividends are subject to statutory earnings tests, capital requirements and regulatory oversight. The subsidiaries exceeded applicable capital requirements at December 31, 2024, but regulators may restrict dividends considered unsafe or inconsistent with earnings retention, capital needs, asset quality or financial condition. Federal Reserve Act limits affiliate credit to 10% of a bank’s regulatory capital per affiliate and 20% in aggregate; collateral is generally required at 100%–130% of the credit. The Parent also guarantees uncommitted credit lines for Pershing LLC and Pershing Limited and provides other subsidiary guarantees and indemnities. Management considers material payments under these arrangements remote, although maximum exposure under generally unnotional indemnifications cannot be estimated.

FY2023 and FY2022 results and prior-period balance-sheet amounts were restated following retrospective adoption in 2024 of ASU 2023-02, concerning proportional amortization of renewable-energy investments. Goodwill and other intangible assets are not separately presented on the condensed Parent balance sheet, so Parent tangible common equity cannot be derived from the presented lines.

Note 20 — Fair value measurement

Recurring fair-value measurements

Before derivative netting, recurring fair-value assets were 26% Level 1 and 74% Level 2 in both years; neither year had Level 3 assets. Available-for-sale securities were the largest asset category. At Dec. 31, 2024, they included non-U.S. government securities of $24.747B (2023: $18.382B), agency RMBS of $19.900B ($13.111B), and U.S. Treasuries of $16.403B ($16.604B). About 99% of securities were valued using pricing sources with reasonable price transparency; all were Level 1 or Level 2.

Before netting, 2024 recurring fair-value liabilities were 17% Level 1 and 83% Level 2.

BNY uses quoted active-market prices when available and otherwise uses observable market inputs, discounted cash flows, and valuation models. Model estimates depend on assumptions about cash flows, interest rates, and other market parameters. Less-active markets, liquidity constraints, concentration, counterparty credit quality, and unobservable inputs such as correlation and recovery rates require judgment and may lead to valuation adjustments. Different methods or assumptions could produce different values; estimates for less-liquid instruments may not represent net realizable value or future fair value. Derivative valuations incorporate both counterparties’ and BNY’s credit spreads, making values sensitive to changes in either. Most derivatives were Level 2; exchange-traded derivatives were generally Level 1, and there were no Level 3 derivatives at Dec. 31, 2024. Derivative amounts reflect permitted netting under legally enforceable master netting agreements and cash collateral.

Nonrecurring fair-value measurements

All 2024 nonrecurring measurements were Level 2. The fair value of loans measured on this basis decreased $1M in 2024, compared with $3M in 2023, using collateral value, with the offset recorded in the allowance for credit losses. Other assets include non-readily marketable equity securities carried at cost with adjustments and assets received in satisfaction of debt.

Financial instruments not carried at fair value

Held-to-maturity securities had the largest disclosed fair-value shortfall relative to carrying amount among the listed financial assets.

Fair Value Option

BNY elected fair value measurement for selected assets and liabilities, including consolidated investment management funds and subordinated notes associated with certain equity investments.

Fund assets and liabilities are included in other assets and other liabilities, respectively. Changes in the funds’ fair value are recorded in income (loss) from consolidated investment management funds within investment and other revenue. Fund valuations use quoted prices and observable market inputs, including prices for similar instruments in inactive markets. Subordinated notes are included in other assets, valued using observable market inputs, and classified as Level 2.

Commitments and off-balance-sheet exposures

At Dec. 31, 2024, BNY’s largest contingent exposure was securities-lending indemnification. The stated notional amounts could be fully exposed if drawn or if a borrower defaulted and collateral proved insufficient; however, many commitments are expected to expire undrawn.

The indemnification total excludes CIBC Mellon client securities for which BNY acts as agent: $60B in 2024 versus $59B in 2023. Those client borrowings were secured by $64B of collateral in 2024, compared with $62B in 2023. For securities lending generally, BNY requires collateral of at least 102% of the fair value of securities borrowed and monitors collateral daily.

Lending commitments mature as follows: $32.7B in less than one year, $19.4B in one to five years, and $440M after five years. Of SBLCs, $1.3B mature within one year and $298M in one to five years; collateral was $173M, up from $158M. The investment-grade share of SBLCs fell to 67% from 74%, while the non-investment-grade share rose to 33% from 26%. BNY says SBLCs typically expire without being funded and closely monitors below-investment-grade guarantees.

Unsettled reverse repurchase agreements, recorded on the settlement date, were $96.1B at Dec. 31, 2024, versus $77.9B a year earlier; there were no unsettled repurchase agreements at either date. BNY also guarantees sponsored-member clients’ payment and performance obligations to FICC on eligible Treasury and agency repo transactions, seeking to limit exposure through security interests in client collateral and transaction rights.

Portfolio exposures

Financial-institution exposure comprised securities industry $22.6B, banks $10.3B, asset managers $10.2B, insurance $4.2B, government $0.4B and other $0.7B. Commercial exposure comprised energy and utilities $4.3B, services and other $4.2B, manufacturing $4.0B, and media and telecom $0.8B. Securities-lending exposure is primarily to broker-dealers.

Legal, regulatory and other contingencies

BNY considers its existing legal accruals appropriate and not material to its consolidated financial position. It does not expect litigation outcomes, net of reserves and insurance, to materially adversely affect financial position or liquidity, but a particular period’s operating results could be materially affected. For matters with reasonably possible losses that can be estimated, aggregate losses could be up to $690M above related accrued liabilities, if any; BNY cannot estimate a reasonably possible loss range for other matters. No material liabilities were recorded for general indemnifications or clearing and settlement exchange guarantees. Maximum payouts on general indemnifications are not estimable, but material payments are considered remote.

Significant litigation includes:

• Postalis: In one Brazilian proceeding, an administrative tribunal found DTVM and former Postalis directors jointly and severally liable for approximately $50M and imposed a roughly $2M fine. Enforcement is suspended by injunction while DTVM pursues annulment. In a separate fund case, a judgment against DTVM and Ativos was reduced on appeal to approximately $2M; further appeals were denied in 2024. A separate approximately $20M judgment against DTVM and an affiliate was reversed on April 30, 2024; Postalis’s appeal was denied on Oct. 3, 2024, and Postalis filed a further appeal. Other Postalis lawsuits and an arbitration remain pending; in the arbitration, a ruling that the tribunal had jurisdiction was upheld on appeal, with further appeals pending.
• Silverado: DTVM, Deutsche Bank S.A. and Silverado Gestão e Investimentos were found jointly liable for losses to the Silverado Maximum Fund. The amount remains to be determined; DTVM appealed on Sept. 12, 2024.
• Cum/ex notices in Germany: Authorities issued secondary-liability notices totaling approximately $150M at then-prevailing exchange rates, related to pre-acquisition trading at funds serviced by acquired entities. BNY appealed, is cooperating with information requests, and intends to pursue an indemnity from the sellers.
• Stanford and MBS matters: Stanford-related investor claims continue after an appellate reversal of the 2021 dismissal of a class action against BNY; a new lawsuit was filed in 2024. BNY also faces pending mortgage-backed-securities trustee actions alleging failures to investigate and pursue claims against transaction parties.
• Regulatory matters: BNY paid a $40M SEC penalty on Aug. 14, 2024, resolving an investigation into business communications on unapproved electronic platforms. It is complying with settlement undertakings and continues cooperating with a related CFTC inquiry. The SEC is also investigating Pershing LLC’s compliance with Rule 15c3-3 and other requirements; BNY continues to cooperate.

Note 23 — Derivative Instruments

BNY uses derivatives to manage interest-rate, foreign-exchange (FX), equity-price and credit risks, and to make markets and facilitate customer transactions. Notional amounts indicate transaction volume, not credit exposure. BNY manages counterparty exposure through offsetting positions, master netting and collateral; it recorded no counterparty-default losses in 2024.

Derivative positions and hedged items

The large nondesignated FX notional is not equivalent to comparable credit exposure. Fair-value hedges at year-end covered $36.9B par value of available-for-sale (AFS) securities and $28.5B par value of long-term debt, each with swaps of equal notional. Loan hedges covered $1.4B of fixed-rate loans within a $3.2B closed loan portfolio.

Forecast foreign-currency transactions hedged with forwards had $765M notional at Dec. 31, 2024. Accumulated OCI included a $4M pretax loss, and a further $6M loss was expected to be reclassified into earnings over the following 12 months. FX contracts designated as net-investment hedges had $11.3B notional and generated OCI gains of $684M in 2024, versus a $285M loss in 2023 and a $631M gain in 2022.

Fair values and netting

Gross values are presented before master netting as required by ASC 815. Nondesignated derivatives accounted for $11.537B of gross derivative assets and $11.897B of gross liabilities in 2024, compared with $10.295B and $10.773B, respectively, in 2023.

Hedge results and trading revenue

Hedge accounting substantially offset the income effects of derivatives and hedged items.

FX trading revenue includes currency transactions and remeasurement. Other trading revenue includes cash-instrument trading and non-FX derivative trading and economic hedging.

Counterparty, downgrade and market risk

OTC derivatives with credit-contingent features in net-liability positions had aggregate fair value before cash collateral of $2.163B at Dec. 31, 2024, versus $1.003B in 2023; collateral posted was $1.940B versus $1.001B. Potential close-out exposure, excluding collateral, if BNY’s largest bank subsidiary were downgraded was $40M at A3/A−, $646M at Baa2/BBB and $2.710B at Ba1/BB+, compared with $115M, $792M and $1.920B, respectively, in 2023. A downgrade below investment grade would have required an additional $351M of collateral in 2024, versus $235M in 2023.

Trading risk is monitored independently using daily position limits, one-day 99%-confidence VaR, market-sensitivity measures and stress tests. Management cautions that VaR does not capture extraordinary events; stress scenarios address reduced liquidity, breakdowns in historical correlations and extreme market conditions.

Offsetting assets and liabilities

BNY’s gross offsetting exposures rose substantially in 2024, while amounts remaining after balance-sheet and other offsets were much smaller. No instruments subject to enforceable netting agreements were left unnetted.

In 2024, $238.551B of financial assets and $238.972B of financial liabilities were offset on the balance sheet. Further financial-instrument offsets were $40.478B for assets and $14.083B for liabilities; cash collateral received against assets was $1M, and collateral pledged against liabilities was $2M.

Selected offsetting categories

The increase in derivative assets was concentrated in foreign-exchange contracts: recognized assets rose to $2.512B from $1.054B, and net exposure increased to $2.380B from $734M. Repo offsets reflect BNY’s FICC government-securities settlement activity, in which payment and delivery are netted through Fedwire.

Secured borrowings and collateral

Secured borrowings, reported at contract value, increased to $244.003B at Dec. 31, 2024, from $165.174B a year earlier.

U.S. Treasuries were the largest repo collateral category, at $188.904B versus $130.238B; agency RMBS collateral was $45.428B versus $26.831B. In tri-party repo services, BNY has credit exposure to dealers through intraday credit, which it mitigates by requiring the credit to be fully secured. A decline in pledged collateral’s fair value could require additional collateral, reducing assets available for other liquidity needs.

FY2024 business-segment results

BNY reports segment results on an internal management basis, not GAAP. Segment revenue and pretax income are net of income attributable to noncontrolling interests in consolidated investment-management funds ($13 million in FY2024 and $2 million in FY2023); revenue also includes specified intersegment services. The CODM primarily evaluates fee and other revenue, total revenue, pretax income, and pretax margin.

Dollars in millions

Higher fee revenue, lower noninterest expense and a reduced credit-loss provision more than offset slightly lower consolidated net interest income. Securities Services includes Asset Servicing and Issuer Services; Market and Wealth Services includes Pershing, Treasury Services, and Clearance and Collateral Management; Investment and Wealth Management includes Investment Management and Wealth Management. “Other” includes corporate treasury and securities-portfolio activity, leasing, derivatives and other trading, insurance, tax-credit and other corporate investments, and certain business exits. Its lower expenses contributed to the narrowing of its pretax loss.

Investment and Wealth Management’s pretax income rose from $47 million in FY2022 to $383 million in FY2023 and $605 million in FY2024; its pretax margin increased from 1% to 12% to 18%. Consolidated revenue and pretax income also increased from FY2022, when they were $16,542 million and $3,493 million, respectively.

In FY2024, BNY moved Institutional Solutions from Pershing to Clearance and Collateral Management, both within Market and Wealth Services, and made smaller reallocations across segments. FY2023 and FY2022 segment results were revised for these realignments; prior periods also reflect retrospective adoption of proportional amortization accounting for renewable-energy investments.

Note 25 — International operations

International results rely on subjective allocations of interest, taxes, credit-loss provisions, support costs and overhead. BNY says it cannot precisely distinguish activity by customer domicile. FY2023 and FY2022 figures were restated following retrospective adoption of ASU 2023-02 on proportional amortization of renewable-energy investments.

FY results and period-end assets ($ in millions):

International revenue increased 4.2%, while pretax income rose 14.2% and net income 12.7%. International assets declined from $87,601 in FY2023 and $91,319 in FY2022. EMEA generated most international revenue and assets; Asia-Pacific revenue, income and assets were slightly lower than in FY2023, while other international results increased.

UK-domiciled operations contributed approximately $30.3 billion of assets and $2.7 billion of revenue in FY2024, versus $29.1 billion and $2.4 billion in FY2023 and $31.7 billion and $2.2 billion in FY2022. The UK represented 7% of consolidated assets and 14% of consolidated revenue in FY2024 and FY2023, compared with 8% and 13%, respectively, in FY2022. Long-lived assets were not significant and were primarily located in the U.S.

Note 26 — Supplemental non-cash cash-flow items

These non-cash investing and financing transactions are excluded from the consolidated cash-flow statement ($ in millions):

Independent auditor’s report

KPMG issued unqualified opinions on BNY’s consolidated financial statements for 2022–2024 and on the effectiveness of internal control over financial reporting as of December 31, 2024. The report is dated February 27, 2025; KPMG has served as BNY’s auditor since 2007. The matters below were critical audit matters, not qualifications or separate opinions.

Critical audit matters

• Credit-loss allowance: At December 31, 2024, the allowance for loan losses was $294 million, and the allowance for lending-related commitments was $72 million. KPMG focused on the quantitative pooled allowance for higher risk-rated and pass-rated commercial and institutional credits and commercial real estate loans. Estimates depend on probability-of-default and loss-given-default models, exposure estimates, borrower risk ratings, collateral and property-market factors, and weighted macroeconomic scenarios; qualitative adjustments address risks not captured by the models.
• Litigation and regulatory contingencies: For matters whose losses could be reasonably estimated, BNY disclosed aggregate reasonably possible losses of up to $690 million in excess of any related accrued liability at December 31, 2024. Estimating exposure and assessing outcomes involve substantial judgment.
• Investment Management goodwill: BNY had $16.6 billion of total goodwill, of which $6.0 billion was allocated to the Investment Management reporting unit. The impairment valuation uses discounted projected cash flows and is sensitive to the discount rate and long-term growth assumption.

Board of Directors

Effective February 27, 2025, BNY’s Board comprised:

Executive Committee and Other Executive Officers

Asterisks identify executive officers.

Shareholder Return Performance

Cumulative total return assumes dividends are reinvested. The comparison tracks a $100 investment from December 31, 2019 through December 31, 2024.

Over the five-year period, BNY’s cumulative return was 78.0%, slightly ahead of the financials index’s 73.9%, but below the S&P 500’s 97.0%. Benchmark returns are weighted by market capitalization at the beginning of the measurement period.