BNY Bank of New York Mellon 10-K 2025-12-31 section summaries

Business overview

BNY is a global financial-services platforms company. As of December 31, 2025, it had $59.3 trillion in assets under custody and/or administration and $2.2 trillion in assets under management. It operates through four segments: Securities Services; Market and Wealth Services; Investment and Wealth Management; and Other. Other includes corporate treasury and securities-portfolio activities, tax-credit and other corporate investments, bank-owned life insurance, derivatives and other trading, and certain business exits.

Operating structure and regulation

BNY’s two principal U.S. banking subsidiaries house most of its securities-services, payments, trade and clearance, collateral-management, wealth-management, and certain investment-management activities. Most Investment Management and Pershing businesses operate through non-bank subsidiaries.

U.S. bank and trust subsidiaries are subject to applicable banking regulation. Foreign banking subsidiaries are subject to non-U.S. regulation as well as Federal Reserve oversight. BNY SA/NV, its principal continental European banking subsidiary, is regulated as a credit institution by the European Central Bank and the National Bank of Belgium. It operates across multiple European countries, with a focus on global custody, asset servicing, and collateral management.

Employees and talent

BNY had approximately 48,100 full-time employees globally at December 31, 2025. Approximately 60% of total employees, including full- and part-time employees, were outside the U.S. Disclosed regional employee counts were approximately 10,100 in EMEA, 18,000 in APAC, and 700 in other global locations, primarily Brazil.

The company considers attracting, retaining, developing, and motivating employees important to its competitiveness. In 2025, it expanded AI training to support its “AI everywhere for everyone” ambition.

Competition and technology

BNY faces intense competition across custody, corporate trust, clearing, collateral management, brokerage, foreign exchange, investment and wealth management, and related technology services. Key competitive factors include service and execution, access to capital, product range and performance, technology, price, reputation, and expertise.

Technology providers and fintech firms are sources of competitive pressure; some may not be subject to the same extensive regulation as BNY. Continued technological change may enable additional market entrants. BNY’s ability to compete also depends on attracting and retaining talent.

Executive compensation and leadership changes

On February 23, 2026, BNY’s Human Resources and Compensation Committee approved the 2026 Executive Incentive Compensation Plan, effective for the 2026 plan year and replacing the 2019 plan. It covers executives selected by the Committee, including named executive officers. Whether awards are granted, their amounts, and their payment form remain discretionary; the plan provides for a minimum award upon a change in control. Forfeiture and recovery provisions continue.

The Committee also amended and restated BNY’s Executive Severance Plan to align it with the new incentive plan. The severance formulas are unchanged.

Effective February 23, Alejandro Perez was appointed Chief Operating Officer. Perez had served as Chief Administrative Officer since 2023 and previously was COO for global market infrastructure from 2021 to 2023.

The filing reports no financial results or quantified financial impact from these actions. It also notes that certain officers and directors participate in dividend reinvestment, employee stock purchase, and 401(k) plans, and may have share-withholding or stock-award transactions structured as Rule 10b5-1 plans or other trading arrangements.

FY2025 financial performance

BNY’s revenue growth accelerated as both fee revenue and net interest income increased. Noninterest expense grew more slowly than revenue, while the provision for credit losses shifted to a benefit. These factors contributed to higher pre-tax income and net income.

Revenue increased 7.8% year over year; fee and other revenue rose 5.8%, and net interest income increased 14.7%. Net interest margin improved from FY2024 and was also above FY2023. Noninterest expense rose 2.8%, below revenue growth. Net income increased 22.9%. FY2025 net income applicable to common shareholders reflects $34M of noncontrolling interests and $243M of preferred dividends.

Earnings per share and share count

Declining average diluted and year-end common share counts amplified per-share earnings growth.

Business scale and profitability

BNY describes itself as a global financial-services platform serving over 90% of Fortune 100 companies, nearly all of the top 100 global banks, and over 90% of the top 100 pension plans. Its three segments are Securities Services, Market and Wealth Services, and Investment and Wealth Management.

Capital, market value and workforce

The supplementary leverage ratio remained below its FY2023 level. The filing notes that interns have been excluded from the employee count beginning in 2024.

BNY 2025 Financial Highlights

Earnings and returns

Reported net income increased approximately 23%, based on the disclosed rounded figures; net income excluding notable items increased approximately 20%. Both years’ results included negative impacts from notable items. In 2025, these included disposal gains, severance expense, litigation reserves and the net impact of FDIC special-assessment adjustments. The 2024 items included severance, litigation reserves and FDIC special-assessment adjustments.

ROE and ROTCE excluding notable items are non-GAAP measures.

Revenue, expenses and credit

Fee revenue growth reflected net new business, higher client activity and market values, and favorable currency translation, partly offset by the mix of AUM flows. Investment and other revenue increased, primarily from disposal gains and net gains on other investments. Higher yields from reinvesting maturing investment securities and balance-sheet growth supported net interest income, partly offset by deposit-margin compression.

Expense growth reflected investment spending, employee merit increases, revenue-related expenses and unfavorable currency effects, partly offset by efficiency savings. Provision for credit losses was a $32M benefit in 2025, primarily reflecting improvement in commercial real estate exposure and changes in the macroeconomic forecast. The 2025 effective tax rate was 20.9%.

Assets under custody and management

AUC/A increased 14%, reflecting client inflows, higher market values and favorable currency effects. AUM increased 7%; higher market values and currency effects were partly offset by cumulative net outflows.

Capital ratios

The CET1 ratio improved mainly through capital generated by earnings and a net increase in accumulated other comprehensive income; repurchases and dividends, as well as higher risk-weighted assets, partly offset the increase. The Tier 1 leverage ratio rose as higher capital more than offset higher average assets.

Fee and other revenue

Fee and other revenue grew 6% in 2025. Fee revenue also rose 6% and represented 72% of total revenue, compared with 73% in each of 2024 and 2023. Growth was led by investment services fees and foreign exchange revenue, partly offset by lower investment management and performance fees.

Investment services fees increased 8%, reflecting higher client activity and net new business, higher market values, and Depositary Receipts revenue. Investment management and performance fees declined 2% (also down 2% on a constant-currency basis), primarily because of AUM flow mix and an approximately $80M rebate-presentation adjustment, partly offset by higher market values and favorable foreign exchange. The adjustment applied to all periods shown and reclassified rebates previously reported as distribution and servicing expense to a reduction of investment management fees. Performance fees were $35M, down from $51M.

Foreign exchange revenue increased 3%, primarily on higher market volatility and transaction volumes; it remains sensitive to client activity, realized spreads, volatility, hedging, and currency remeasurement. Financing-related fees rose 7% on higher underwriting and loan fees. Distribution and servicing fees fell 8% as fees paid to introducing brokers increased; related distribution expense is recorded separately in noninterest expense and partly offsets the income impact.

Investment and other revenue rose 10%, primarily from disposal gains and net gains on investments. Disposal gains were $52M, versus none in 2024.

Investment and other revenue components

Consolidated investment management fund income should be considered together with noncontrolling-interest income or loss, because BNY has no economic interest in that portion of the funds.

Assets under custody/administration and management

AUC/A increased 14% in 2025, driven by client inflows, higher market values, and a weaker U.S. dollar; it had increased 9% in 2024. Its mix was 38% equity and 62% fixed income, versus 37% and 63%, respectively, a year earlier. AUC/A includes CIBC Mellon’s $2.2T at year-end 2025, compared with $1.8T in 2024 and $1.7T in 2023.

AUM grew 7% in 2025, after 3% growth in 2024. Higher market values and favorable currency effects more than offset cumulative net outflows.

Net interest income and margin

GAAP net interest income increased 15% in FY2025, following a 1% decline in FY2024. Net interest margin rose 11 basis points in FY2025 after declining 3 basis points in FY2024. Management attributed the FY2025 improvement mainly to reinvesting maturing securities at higher yields and balance-sheet growth, partly offset by deposit-margin compression. The difference between FTE and GAAP net interest income reflects an immaterial tax-equivalent adjustment that does not affect net income.

Average balances, interest income and expense

Average interest-earning assets grew 5% in FY2025. Higher federal funds sold and securities purchased under resale agreements, along with higher securities balances, drove the increase; lower interest-bearing deposits at the Federal Reserve and other central banks partly offset it. Average interest income was nearly flat, while the average asset yield declined. Average interest-bearing liabilities increased, but interest expense fell as funding costs declined, including lower interest-bearing deposit expense and deposit rates.

Effect of enforceable netting on reported rates

Reported yields on federal funds sold and resale agreements, and rates on federal funds purchased and repurchase agreements, are materially affected by enforceable netting. Average offsetting was approximately $239B in FY2025, $176B in FY2024 and $111B in FY2023. Excluding netting, the yield earned was 4.36% in FY2025, 5.28% in FY2024 and 5.22% in FY2023; the rate paid was 4.28%, 5.18% and 5.10%, respectively. Management noted that these adjusted rates better reflect actual rates earned and paid.

Average non-U.S.-dollar deposits were approximately 25% of average total deposits in both FY2025 and FY2024; about half of those deposits were euro-denominated.

FY2025 segment results

BNY reports segment results on its internal management accounting basis, not GAAP. In 2025, prior-year Investment Management and Wealth Management line-of-business revenue was reclassified following a fixed-income business transfer; this did not change segment or consolidated revenue.

Securities Services revenue grew 9%, following 4% growth in FY2024; its margin also exceeded FY2023’s 25%. Market and Wealth Services revenue grew 12%, after 7% growth in FY2024, with margin above FY2023’s 45%. Investment and Wealth Management revenue declined 4%, following 7% growth in FY2024; pre-tax income remained above FY2023’s $383M, and its margin was above FY2023’s 12%.

Segment revenue and expense detail

Securities Services growth reflected higher net interest income, client activity, market values and net new business, plus a disposal gain in Asset Servicing, partly offset by an investment loss. Issuer Services benefited from Depositary Receipts revenue and a disposal gain. Market and Wealth Services benefited from higher net interest income, market values and client activity at Pershing; higher net interest income and net new business at Payments and Trade, partly offset by an investment loss; and higher collateral balances, clearance volumes and net interest income at Clearance and Collateral Management. Its expense growth reflected investments, merit increases, revenue-related costs, higher litigation reserves and severance, partly offset by efficiency savings.

Investment and Wealth Management’s lower revenue reflected a decline in Investment Management revenue. Average deposits fell 11% to $9.445B from $10.589B, while average loans rose 2% to $13.902B from $13.610B. Total noninterest expense decreased 3%.

Operating metrics

Securities Services AUC/A growth reflected higher market values, client inflows and a weaker U.S. dollar. Securities lending revenue increased 25%. Pershing’s DARTs rose 10%, while average collateral balances increased 14%.

Risks and operating context

Fee revenue is exposed to global market levels, particularly in Investment and Wealth Management. 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. Foreign-exchange translation, primarily from the British pound and euro, can affect segment growth: Securities Services and Market and Wealth Services generally have more foreign-currency expenses than revenues, while Investment and Wealth Management has more foreign-currency revenues than expenses. BNY said currency movements alone are not expected to significantly affect consolidated net income.

Fee pressure from the industry shift toward lower-fee asset-management products weighs on investment services, while clients’ regulatory and cost pressures create outsourcing opportunities. Results are also seasonal: first-quarter staff costs rise with stock-award vesting for retirement-eligible employees and merit increases; volume-related fees may decline in the third quarter; and fourth-quarter business-development and marketing costs typically increase, while Investment and Wealth Management performance fees are often higher.

Investment and Wealth Management

Assets and flows

Assets under management (AUM) rose 7% to $2.178T at Dec. 31, 2025, from $2.029T a year earlier. Higher market values and favorable foreign-exchange effects more than offset cumulative net outflows.

Long-term strategy outflows included $49B from index, $37B from liability-driven investments, $18B from equity, and $8B from multi-asset/alternative strategies; fixed income had $19B of inflows. Other activity in 2025 includes a methodology change to include assets under advisement.

Wealth Management client assets were $350B, up from $327B.

Segment financial results

Investment Management revenue declined with AUM flow mix and a rebate adjustment, partly offset by higher market values and favorable currency effects. Wealth Management revenue was flat: higher market values were offset by product mix. Segment expenses fell as lower revenue-related costs, including the rebate adjustment, and efficiency savings more than offset investment, employee merit, and currency-related costs. Non-U.S. sources accounted for 28% of segment revenue, versus 30% in 2024.

Effective in 2025, approximately $80M of rebates previously recorded in distribution and servicing expense were reclassified as a reduction of investment management fees. The reclassification was applied to all periods presented and changes revenue and expense subtotals, but not the underlying economics. Prior-period line-of-business revenue was also revised to move certain fixed-income investment management business from Wealth Management to Investment Management; this did not affect combined segment or consolidated revenue.

The businesses offer institutional and retail multi-asset investment solutions, specialized investment firms, portfolio solutions and sub-advisory services, as well as wealth management, custody, private banking, planning and servicing through more than 30 offices. Results are driven by AUM levels and mix, net flows, markets, foreign exchange, fee rates and performance fees. Actively managed equity, multi-asset and alternative assets generally earn higher percentage fees than fixed income, liability-driven and cash assets; active strategies generally earn more than indexed products. Industry and regulatory trends toward lower-fee products and performance-based fees make asset mix and sustained net new flows important revenue drivers.

Other segment

Higher investment gains primarily drove the increase in total revenue. Lower severance expense and litigation reserves contributed to the decline in noninterest expense and the improvement in pretax loss. The segment includes corporate treasury and securities portfolio activity, tax-credit and other corporate investments, insurance, derivatives/trading, and certain business exits.

International operations

BNY’s international activities include asset servicing, global payments, investment management, securities clearance and settlement, fiduciary services, and foreign-exchange trading in more than 100 currencies. At Dec. 31, 2025, approximately 60% of employees were outside the U.S., including about 10,100 in EMEA, 18,000 in Asia-Pacific, and 700 in other locations, primarily Brazil.

Foreign-currency translation, primarily of the British pound and euro, affects reported fee revenue, net interest income, noninterest expense, AUC/A and AUM. Dollar depreciation against those currencies increases translated amounts; appreciation decreases them.

Non-U.S. country exposures

At Dec. 31, 2025, BNY’s top 10 non-U.S. country exposures totaled $72.1B, approximately 65% of total non-U.S. exposure. Amounts are on BNY’s internal risk-management basis and are before the allowance for credit losses.

The top-10 total comprised $28.6B in central-bank interest-bearing deposits, $4.6B in bank deposits, $6.3B in lending, $24.3B in securities, and $8.3B in other exposure. Country exposure reflects immediate-default risk based on counterparty or obligor residence, or the domicile of a relevant risk mitigant or issuer. Lending includes loans, acceptances, issued letters of credit and lending-related commitments, net of participations; securities include available-for-sale and held-to-maturity portfolios; other exposure includes OTC derivatives and securities-financing transactions, net of collateral. The measure excludes certain commitments and contingent liabilities.

Higher-risk exposures included $1.5B in Brazil, primarily short-term trade-finance loans to large financial institutions, and $1.3B in Russia, consisting of cash balances related to Securities Services. Russian exposure could increase if additional client-benefit cash is allocated, subject to distribution restrictions. After the war in Ukraine began, BNY stopped new banking business in Russia and suspended investment-management purchases of Russian securities. Russian securities held in AUC/A and AUM remained insignificant relative to each total; BNY continues custody and recordkeeping services for multinational clients managing their exposures.

Critical Accounting Estimates and Key Judgments

At December 31, 2025, BNY’s principal critical accounting estimates involved credit-loss allowances, goodwill and intangible-asset impairment, and litigation and regulatory contingencies.

Credit-loss allowances

The allowance for credit losses covers amortized-cost financial assets, including loans and lending commitments, held-to-maturity securities, certain securities-financing transactions, and bank deposits. BNY combines quantitative models—using probability of default, loss given default and exposure at default, as applicable—with qualitative adjustments for risks not fully captured by the models. The models are updated quarterly and use weighted baseline, upside and downside macroeconomic scenarios.

Individually evaluated assets, including nonperforming and modified loans, are assessed using borrower condition, collateral, guarantor support and expected recoveries. For available-for-sale debt securities, BNY estimates the credit-loss portion of unrealized losses separately, at the security level, using discounted cash flows.

At year-end, a hypothetical 10% increase in commercial real estate (CRE) property values, together with one-grade-better ratings for all other credits, would reduce the quantitative allowance by $40 million. A 10% CRE value decline combined with one-grade-worse ratings would increase it by $74 million. BNY’s baseline forecast assumed GDP growth through mid-2026 before moderating, slightly rising unemployment and stable CRE prices through 2026. The downside scenario assumed negative GDP growth through mid-2026, rapidly rising unemployment and sharply lower CRE prices through 2026. BNY weighted the baseline most heavily, followed by the downside, with the remainder assigned to the upside. A hypothetical 100% weighting of the downside scenario would increase the quantitative allowance by approximately $99 million. These are sensitivities, not forecasts of actual portfolio deterioration; differences between actual outcomes and forecasts or management judgments could materially affect the allowance.

Goodwill and intangible assets

At December 31, 2025, BNY reported $16.8 billion of goodwill, $2.6 billion of indefinite-lived intangible assets and $234 million of other amortizing intangible assets. No goodwill or intangible-asset impairment was recognized.

BNY tested its Investment Management reporting unit in each quarter of 2025. At year-end, estimated fair value exceeded carrying value by approximately 10%. The valuation used an income approach based on management projections and a 10% discount rate. A 25-basis-point increase or decrease in the discount rate would reduce or increase estimated fair value by approximately 4%, respectively; a 10-basis-point increase or decrease in long-term growth would decrease or increase fair value by approximately 1%, respectively. The unit had $6.3 billion of allocated goodwill. In the second quarter of 2025, BNY tested its other six reporting units using a 10% discount rate; their fair values were substantially above carrying values, and no impairment was recorded.

Goodwill and indefinite-lived intangible assets are not amortized and are tested annually or sooner if impairment indicators arise. Other intangible assets are amortized over estimated useful lives and tested when indicators arise. Because valuations depend on long-range cash-flow forecasts and discount-rate assumptions, changes in assumptions could result in a material future non-cash impairment.

Litigation and regulatory contingencies

Accruals for litigation and regulatory matters require significant management estimates and judgment.

Balance sheet and funding

At December 31, 2025, BNY’s balance sheet had expanded, primarily reflecting higher central-bank deposits, securities and loans. Interest-bearing deposits also increased, while available funds grew faster than total assets.

Available funds were 37% of assets, up from 35%; securities were 32% of assets, down from 33%, and loans were 17% in both periods. Interest-bearing deposit liabilities were 66% of interest-earning assets, compared with 65% a year earlier. Higher long-term debt reflected issuance and an increase in the fair value of hedged debt, partly offset by maturities and redemptions.

Securities portfolio and rate exposure

The securities portfolio’s reported fair value increased to $147.5B from $132.1B. Its net unrealized loss, including related hedges, narrowed to $3.0B from $6.2B, primarily because of lower interest rates. Portfolio growth reflected higher U.S. Treasury and non-U.S. government securities and unrealized gains, partly offset by lower U.S. government agency securities.

At year-end 2025, AFS securities made up 69% of the portfolio and HTM securities 31%. Securities amortized cost was $150.516B and fair value was $147.483B, a $3.033B difference. Most of the pre-tax unrealized loss, net of hedges, related to HTM securities ($2.717B), compared with $316M for AFS securities. Credit quality remained high but weakened: 96% of securities were rated AAA/AA- at year-end 2025, versus 99% in 2024.

Lending exposure and credit concentrations

Total lending-related exposure, including unfunded commitments, grew 5% to $131.8B. Financial institutions and commercial exposures together represented 44% of total exposure, down from 49%. BNY’s lending strategy focuses on investment-grade clients that actively use its non-credit services; non-investment-grade bank exposure is primarily trade-finance lending in Brazil.

Financial-institution exposure declined 10%; 96% was investment grade, 79% was due within one year and 64% was secured. Commercial exposure increased 10%, and 97% was investment grade. Margin loans were secured by marketable securities, with borrowers required to maintain daily collateral exceeding 100% of loan value; $12B was in a fully collateralized term-loan program, compared with $8B in 2024.

Wealth-management loans were mainly secured by investment or custody accounts. Wealth-management mortgages were primarily interest-only, adjustable-rate loans, with a 61% weighted-average LTV at origination and less than 1% past due. Commercial real estate exposure included $2.4B of office loans, 74% of which was secured. Overdrafts, primarily associated with custody and securities-clearance clients, are generally repaid within two business days.

Maturities and other portfolio considerations

Of $80.615B of loans at December 31, 2025, $57.645B matured within one year, including $25.753B of margin loans and $10.742B of financial-institution loans. Among loans maturing after one year, $17.418B carried floating rates and $5.552B fixed rates.

Net securities amortization was $188M in 2025, compared with $26M of net accretion in 2024; amortization reduces net interest income. Equity investments increased to $5.553B from $5.083B, including tax-credit investments of $3.151B versus $2.821B.

Credit quality

Credit quality improved in FY2025. The provision for credit losses shifted to a benefit, primarily reflecting improved commercial real estate (CRE) exposures and changes in the macroeconomic forecast. Net charge-offs also declined, including CRE charge-offs. Total and average loans grew, while the allowance and allowance ratios declined.

The allowance for loans and lending-related commitments fell to $319M from $366M and remained concentrated in CRE.

Management’s lifetime-loss estimates rely on forecasts and judgment; actual losses may differ.

Nonperforming assets declined, primarily because of lower nonperforming CRE loans. Allowance coverage of nonperforming loans improved.

Deposits and funding

Deposits, a low-cost and stable funding source gathered through Securities Services, Market and Wealth Services, and Investment and Wealth Management, increased 15%, mainly from higher interest-bearing balances.

Uninsured U.S.-office deposits create material exposure to balances above FDIC insurance limits; these accounts are generally demand deposits. Uninsured time deposits were comparatively limited at year-end: $616M in U.S. offices and $1.406B in non-U.S. offices. Most matured within three months ($393M and $1.373B, respectively).

BNY relies primarily on deposits and, to a lesser extent, short-term borrowings and long-term debt. Short-term funding includes federal funds purchased and repurchase agreements, customer and broker-dealer payables associated with trading activity and market volatility, commercial paper, and other borrowings. FICC repo transactions are reported with gross interest expense, while ending and average balances reflect enforceable netting; repos require collateral. Other borrowings include custody-related sub-custodian overdrafts, Pershing credit-line borrowings, and Federal Home Loan Bank borrowings.

Liquidity and funding

BNY’s available funds grew primarily because of higher deposits with central banks. At year-end, available funds equaled 37% of total assets, compared with 35% a year earlier.

Average available funds were $151.513B in 2025, versus $147.666B in 2024 and $148.888B in 2023; they represented 35%, 36% and 37% of average total assets, respectively.

Higher commercial paper and trading liabilities drove the increase in non-core funding. Deposit growth primarily reflected client activity, while higher customer and broker-dealer payables reflected trading activity and market volatility. Reduced client activity in Securities Services and Market and Wealth Services could limit access to deposits.

Debt and parent-company funding

Long-term debt at year-end was $31.9B, compared with $30.9B in 2024. During 2025, BNY issued $5.750B of long-term debt and had $5.5B of maturities and redemptions; the increase in the balance also reflected the higher fair value of hedged long-term debt. The Parent had $2.7B of long-term debt maturing in 2026. In January 2026, it issued $1.25B of callable fixed-to-floating senior notes and $300M of callable floating-rate senior notes, both due in 2030.

At year-end, bank notes outstanding were $2.5B versus $1.0B, certificates of deposit were $4.9B versus $1.1B, and commercial paper was $2.0B versus $301M. Average commercial paper outstanding was $2.3B in 2025, up from $1.2B in 2024.

The Parent relies on capital-market access, subsidiary dividends, cash on hand and an IHC committed credit facility. Ratings remained investment grade with stable outlooks. After year-end, U.S. bank subsidiaries could pay the Parent approximately $101M in dividends without regulatory waiver; Parent non-bank subsidiaries held approximately $4.4B in liquid assets. Restrictions on subsidiary transfers and dividends constrain funding. Double leverage declined to 118.6% from 119.7%, within management’s target range. Management cited liquid assets at principal subsidiaries, fee-based cash generation (fee revenue was 72% of 2025 total revenue) and bank dividend capacity as support for the Parent’s funding position.

Regulatory liquidity

BNY and affected domestic bank subsidiaries remained above the 100% minimum LCR throughout Q4; the 100% NSFR requirement was also exceeded.

Capital returns and cash flows

In July 2025, the board increased the quarterly common dividend 13%, from $0.47 to $0.53 per share, effective in Q3. Common and preferred dividends totaled $1.7B for 2025, and the common dividend payout ratio was 27%. BNY repurchased 36.8M common shares at an average price of $96.12 per share, for $3.5B.

Operating cash flow primarily reflected earnings, partly offset by changes in accruals and other items. Investing outflows reflected changes in central-bank deposits, loans and the securities portfolio. Financing inflows primarily reflected deposit changes and long-term debt issuance, partly offset by debt repayments. BNY cautioned that cash-flow movements may be less informative for assessing earnings and net assets than its liquidity and asset/liability-management discussion.

Capital, equity and shareholder returns

BNY’s capital position strengthened in 2025, with higher equity and regulatory capital ratios. Shareholders received nearly $5.0 billion through repurchases and dividends.

The increase in equity reflected earnings, improved accumulated other comprehensive income (AOCI) and higher additional paid-in capital, partly offset by repurchases and dividends. The reduction in after-tax unrealized AFS losses was primarily due to lower interest rates.

In July 2025, BNY raised its quarterly dividend 13%, from $0.47 to $0.53 per share, beginning in Q3. Q4 repurchases were 9.450M shares at an average $110.54 per share. At year-end, $1.797B remained available under the repurchase plans, which include the January 2023 $5.0B authorization and an additional $6.0B authorization announced in April 2024.

Regulatory capital

BNY and its U.S. bank subsidiaries were “well capitalized” at both year-ends. Consolidated effective ratios use the lower applicable capital ratio under the Standardized and Advanced Approaches.

The minimum consolidated Standardized CET1 ratio, including applicable buffers, was 8.5%.

The bank’s applicable well-capitalized thresholds were 6.5% CET1, 8% Tier 1, 10% total capital, 5% leverage and 6% SLR.

CET1 generation and capital structure

Consolidated CET1 rose $2.327B, from $18.759B to $21.086B. Common-shareholder net income contributed $5.306B; after a $137M deduction for goodwill and intangibles, gross CET1 generated was $5.169B. Capital returned was $4.982B. Other comprehensive gain was $1.621B, including a $999M unrealized gain on AFS assets and a $580M foreign-currency translation gain; additional paid-in capital added $586M.

CET1 growth reflected earnings and AOCI gains, partly offset by capital returns and higher RWA. BNY issued Series J, K and L preferred depositary shares in 2025 and redeemed all Series G shares.

Regulatory buffers and risks

The Federal Reserve kept BNY’s stress capital buffer at the 2.5% regulatory floor for the period beginning Oct. 1, 2025. At year-end, external total loss-absorbing capacity (TLAC) was 29.7% of RWA and 13.6% of total leverage exposure, above buffered minimums of 21.5% and 9.5%, respectively. External long-term debt (LTD) was 14.3% of RWA and 6.5% of leverage exposure. Falling below TLAC buffers could constrain dividends, share repurchases and discretionary executive compensation.

Capital ratios may vary with client trading, deposits and balance-sheet size, and may change as models, RWA calculations, regulatory guidance and business mix evolve. Under the Advanced Approaches, external industry operational losses, including fines and penalties, can increase required capital. Failure to meet capital or “well capitalized” requirements could restrict BNY’s activities and harm its financial condition.

Trading activities and risk management

BNY’s trading is primarily customer market-making and trade facilitation, with risk-mitigating hedging subject to the Volcker Rule. It manages exposures through trader position limits, VaR and other market-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 does not capture longer-horizon extreme losses or liquidity variability and may not predict future market movements.

Trading portfolio VaR

Historical-simulation VaR, $ millions:

Higher average interest-rate and foreign-exchange component VaR was substantially offset by a larger diversification benefit. In 2025, interest-rate and foreign-exchange exposures represented 45% and 48% of average gross VaR, respectively; equity represented 1% and credit 6%. Daily trading losses exceeded overall portfolio VaR on three occasions in 2025.

Daily trading revenue and loss frequency

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

Daily trading revenue was positive on most days across the five quarters shown.

Trading positions and derivative valuation

Trading assets and liabilities primarily comprise securities and non-hedging derivative positions, including FX and interest-rate contracts.

Derivative fair values reflect BNY’s and counterparties’ credit risk, including observable ratings and credit-default-swap spreads.

Net of hedges, CVA decreased $3 million and DVA increased $3 million in 2025; together, the changes decreased other trading revenue by $1 million. No realized losses were charged off against CVA reserves in either 2025 or 2024.

Counterparty exposure

BNY notes that significant changes in counterparty credit ratings could alter its credit risk.

Interest-rate and balance-sheet sensitivity

BNY’s modeled 12-month pre-tax net interest income (NII) sensitivity at Dec. 31, 2025 was mixed across rate scenarios. The figures below show the modeled change in NII versus baseline.

Quarter-over-quarter changes in the ±100- and ±200-bps scenarios were driven primarily by increased floating-rate assets. The divergent outcomes for isolated long- and short-term rate movements underscore that NII sensitivity depends on the shape of the yield curve, not only on parallel shifts.

Deposit balances and mix—especially noninterest-bearing deposits—are also important NII drivers. A modeled instantaneous $5B change in U.S.-dollar noninterest-bearing deposits changes the +100-bps scenario result by approximately $220M and the −100-bps result by approximately $120M. Deposit reductions lower those scenario results; increases raise them. The effect is smaller when the change is a mix of interest-bearing and noninterest-bearing deposits.

The simulations hold deposit balances and mix static and assume no management mitigation. They therefore do not capture actual client deposit responses or possible management actions. Results also depend on uncertain assumptions, including deposit pricing, credit spreads, prepayments, derivatives and market expectations; rate impacts may be nonlinear, so the modeled results should not be extrapolated beyond the shocks shown. Noninterest-bearing deposits are particularly sensitive to short-term rates. When short-term rates are low, money market mutual fund and similar fees are typically waived to protect investors from negative returns.

Economic value of equity

Higher rates can reduce the reported value of available-for-sale securities and thereby reported equity and regulatory capital, without a corresponding accounting increase in the value of fixed liabilities. BNY notes that this accounting effect may differ from the economic effect on its capital position.

Foreign-exchange exposure

BNY manages foreign-exchange exposure by matching foreign-currency assets with liabilities in the same currency where practical, and by using FX contracts to manage exposures and translation effects. At Dec. 31, 2025, net investments in foreign operations totaled $16B across 18 foreign currencies; forward FX contracts are used to hedge the value of those net investments.

Risk governance and oversight

BNY identifies and assesses material risks quarterly, using the results to inform its risk appetite, enterprise-wide stress testing and capital planning. The Board Risk Committee reviews and approves the Risk Appetite Statement and related metrics at least annually. Stress testing is conducted through the Internal Capital Adequacy Assessment Process and in accordance with CCAR and applicable enhanced prudential standards.

BNY’s three lines of defense assign risk ownership to business and corporate functions; independent Risk and Compliance, led by the Chief Risk Officer, sets guidance and challenges those functions; and Internal Audit reports directly to the Board Audit Committee. The Chief Risk Officer reports to both the CEO and the Board Risk Committee. The management-level Enterprise Risk Committee monitors the company’s risk profile, top and emerging risks, and significant risk/reward trade-offs. Its subcommittees cover financial, operational, technology, regulatory, anti-money-laundering, liquidity and resiliency risks.

Principal risk exposures and controls

• Operational, technology, data and third-party risks: Processing errors, control or compliance failures, fraud, cyberattacks, information-system breaches and business interruptions could cause losses or reputational and regulatory harm. Technology risk includes cyber, infrastructure, applications and resiliency. Operational resiliency is a strategic priority, supported by the Business Services Framework, incident and crisis management, disaster-recovery testing, business continuity, technology-asset management and oversight of third-party-provider resiliency. BNY’s Data Management Framework addresses data architecture, governance, quality, protection, usage and ethics; data quality and scalable, resilient architecture are priorities, including in new products and AI applications. Fraud controls include identification, assessment, mitigation and employee awareness, while third-party risks are managed throughout provider engagement lifecycles.
• Market risk: Direct market risk is generally limited because trading primarily supports clients. More significant exposures arise from interest-rate and credit-spread movements in the investment portfolio, which supports asset/liability management and net interest income, and from broader balance-sheet sensitivity to interest rates. BNY also has indirect exposure to market movements through collateral values supporting securities-financing and derivatives positions. Trading VaR and stressed VaR are monitored, with back-testing reviewed.
• Credit risk: Exposures arise from client-related lending and deposits, intraday credit required for processing, loans and securities, FX activity, lending commitments, letters of credit and securities-lending indemnifications. BNY manages exposures by counterparty, industry, country and portfolio, with internal limits and approval escalation up to the Chief Risk Officer. Expected loss is assessed using exposure at default, probability of default and loss given default. Counterparties receive internal ratings on an 18-grade scale; transactions receive loss-given-default ratings on a five-grade scale reflecting structure, guarantees, collateral and seniority. Independent credit portfolio managers challenge ratings, and a separate Credit Risk Review Group reviews loan files and ratings. Expected-loss methods and assumptions are regularly evaluated. Risk mitigation includes prudent underwriting, risk-adjusted return requirements, syndications, asset sales, credit enhancements, collateralization and netting.
• Liquidity risk: Liquidity is essential to payments, settlement and clearing. Vulnerabilities include funding mismatches, reduced ability to convert investments to cash, constrained debt issuance or rollover, core-deposit outflows and contingent demands such as additional collateral. A credit-rating downgrade could accelerate deposit outflows, raise secured-transaction margin requirements and impair refinancing of maturing liabilities. The Board sets liquidity risk tolerance and oversees management; ALCO governs execution of approved strategies, with independent oversight from the Financial Risk Committee. BNY monitors cash, investment-portfolio quality, intraday liquidity and potential needs under normal and stressed conditions, using Liquidity Coverage Ratio measures and internal liquidity stress testing.
• Capital and model risk: Capital risk includes the possibility that losses, impairments, model errors, regulatory changes or poor strategic planning weaken the capacity to absorb losses, support operations and meet regulatory requirements. Profits and losses, other comprehensive income, leverage and risk-weighted exposures can make capital ratios volatile. Independent risk management oversees capital adequacy, planning, stress testing, risk-weighted assets and capital measurement, including review of CCAR, DFAST and regulatory-capital interpretations. Model failures, flawed assumptions or implementation, misuse, or overreliance on outputs can lead to losses, poor decisions or reputational damage. Independent second-line Model Risk Management governs models throughout their lifecycle, including inventory, documentation, validation, monitoring, change control and performance review; its framework covers AI use cases, including large language models, and is integrated with BNY’s broader AI risk framework.
• Strategic and cross-enterprise risks: Execution depends on organic growth, high-quality and technology-enabled client solutions, operating-model evolution, scale, talent retention and protection of the financial profile. Disruptive technology, geopolitical events, economic slowdowns and changing client preferences could impede adaptation, harming positioning, growth or client service and potentially causing financial loss or litigation. Climate-related physical and transition risks—including weather, policy, regulation, technology and changing investor or customer preferences—may affect credit portfolios, strategy, resiliency, regulatory demands, reputation and financial performance. Negative stakeholder perceptions involving BNY or associated parties could damage earnings, capital, liquidity, brand and enterprise value. Wars, sanctions, trade disputes, tariffs, cyber conflicts, policy shifts and exposure to jurisdictions with weaker institutional protections may disrupt markets and economies and cause losses to BNY or its clients; BNY monitors geopolitical developments for potential impact.

Cybersecurity

In 2025, cybersecurity threats had no material effect on BNY’s business strategy or operations. The Company nonetheless treats cybersecurity as a priority: threats to financial institutions are becoming more prevalent, severe, and adaptive, and future incidents could materially affect BNY. Cybersecurity risks inform its resource allocation, operations, and risk management.

BNY’s program follows a three-lines-of-defense model. A dedicated Cybersecurity organization, led by the CISO, oversees day-to-day threat intelligence, monitoring, incident response, and escalation. Preparedness includes mandatory workforce training, enhanced training for higher-risk roles, phishing simulations, and incident exercises. The program also uses internal and external assessments, penetration testing, independent audits, and regulatory examinations. BNY’s information security management system is certified to ISO 27001 and subject to periodic external audits and ongoing monitoring.

Third-party providers are an important area of exposure. BNY assesses engagements according to risk and may require contractual obligations or additional controls. Technology Risk Management provides second-line challenge and oversight, while Internal Audit conducts independent third-line reviews. The Board Risk and Technology Committees oversee cybersecurity; the Technology Committee and full Board receive regular briefings, with significant threats and incidents subject to escalation protocols.

BNY’s cybersecurity and technology risk leadership changed recently: the CIO and Chief Technology Risk Officer joined in 2024, and the CISO joined in 2025. BNY says the leaders bring specialized expertise and fresh perspectives, while succession and transition planning are intended to support continuity.

Supervision and regulation

BNY operates under extensive U.S. and international banking, investment-advisory and financial-market regulation. Changes in regulations or how they are applied could materially affect its businesses and results. BNY is assessing potential operational and business impacts from evolving U.S. policy on tariffs, artificial intelligence and digital assets, as well as possible changes in sustainability-related regulation.

Capital, leverage and distributions

BNY’s 2025 Stress Capital Buffer (SCB) was confirmed at 2.5%, the regulatory floor. The SCB supplements Standardized Approach capital requirements and reflects projected CET1 declines under stress testing plus planned common dividends; failure to meet applicable buffers can constrain distributions. BNY also has a 2.5% capital-conservation buffer under the Advanced Approaches, a 1.5% G-SIB surcharge for 2025, and a countercyclical buffer that can be as high as 2.5% (currently 0% for U.S. exposures). The lower capital ratio calculated under the Standardized or Advanced Approach governs. BNY is subject to a greater-than-5% enhanced supplementary leverage ratio (eSLR) threshold under the existing framework; bank subsidiaries generally need a 6% SLR to be considered well capitalized. A custody-bank rule excludes qualifying central-bank deposits from the SLR denominator and certain related measures.

A final rule issued November 25, 2025 recalibrates the G-SIB eSLR buffer to 50% of the Method 1 G-SIB surcharge and caps the corresponding buffer for G-SIB bank subsidiaries at 1%. It also removes the eSLR threshold from the “well capitalized” determination and revises leverage-based long-term debt and TLAC buffer calculations. Compliance begins April 1, 2026.

BNY undergoes annual Federal Reserve and company-run stress tests. The Federal Reserve has proposed calculating SCBs using average CET1 declines from the two latest supervisory stress tests and moving the annual effective date from October 1 to January 1; BNY expects no impact. In February 2026, the Federal Reserve said existing SCBs will generally remain in effect until new ones are issued in 2027. BNY expects its current SCB to remain effective through October 1, 2027, unless the Federal Reserve determines otherwise. The Federal Reserve is also pursuing greater transparency and public feedback on stress-test models and scenarios. Proposed Basel III capital revisions and changes to G-SIB surcharge methodology could affect future requirements. Other capital rules require deductions for certain deferred tax assets and investments above CET1 thresholds and impose elevated risk weights on specified exposures.

The Parent relies mainly on subsidiary dividends, interest, distributions and other payments—including credit extensions from the intermediate holding company (IHC)—to meet obligations and fund dividends and repurchases. Bank-subsidiary dividends are subject to regulatory approval, capital and earnings tests, and restrictions applicable to undercapitalized institutions. The IHC cannot distribute funds if specified capital or liquidity indicators are breached; if Parent resolution becomes imminent, its committed credit lines terminate automatically and outstanding amounts become due. These constraints may limit capital returns or access to subsidiary funding.

Loss-absorbing capacity and intervention

External TLAC must equal the greater of 18% of RWAs plus a CET1-only buffer (2.5% of RWAs, the Method 1 G-SIB surcharge and any countercyclical buffer) or 7.5% of total leverage exposure plus a 2% Tier 1 buffer. Minimum eligible external long-term debt is the greater of 6% of RWAs plus the higher of the Method 1 and Method 2 G-SIB surcharges, or 4.5% of total leverage exposure. Eligibility rules include unsecured debt with at least one year to maturity, with additional restrictions on acceleration rights and governing law for debt issued after December 31, 2016. Other rules limit certain guarantees, subsidiary-guaranteed liabilities, short-term third-party debt and derivatives; specified liabilities are capped at 5% of eligible external TLAC instruments.

A Federal Reserve proposal dated August 29, 2023 would require a $400,000 minimum denomination for newly issued G-SIB debt counted toward TLAC/LTD, allow only 50% of eligible debt with one to less than two years to maturity to count toward TLAC, and exempt certain third-party qualified financial contracts from clean-holding-company prohibitions. BNY monitors the proposal. Its EU material subsidiary, BNY SA/NV, is subject to internal TLAC and EU internal MREL requirements; UK and EU rules also impose internal loss-absorbing-capacity requirements on relevant subsidiaries.

Prompt corrective action rules impose progressively tighter restrictions as insured-bank capital declines. The Federal Reserve may also act against BNY’s parent based on a bank subsidiary’s undercapitalization; in some circumstances, the parent must guarantee the subsidiary’s capital-restoration plan.

Liquidity, trading and counterparty limits

As of December 31, 2025, BNY and its domestic bank subsidiaries complied with applicable U.S. Liquidity Coverage Ratio requirements, which require unencumbered high-quality liquid assets to cover projected net cash outflows over a 30-day stress period. BNY also complied with the Net Stable Funding Ratio requirement of 1.0. Additional large-bank standards require liquidity governance, stress testing, contingency funding plans, limits and adequate unencumbered liquidity buffers.

The Volcker Rule restricts proprietary trading and specified activities involving covered private-equity and hedge funds. Covered-fund ownership is generally limited to 3% of an individual fund and, for covered interests subject to the limits, 3% of Tier 1 capital in aggregate; sponsored-fund interests remain subject to relevant limits and capital deductions. BNY is classified as a “moderate trading” bank under the 2019 revisions, which allow a tailored compliance program and remove certain annual CEO attestation and quantitative-metrics filing requirements. Dodd-Frank Title VII imposes derivatives conduct, reporting, margin and recordkeeping requirements. The Bank of New York Mellon is a registered security-based swap dealer subject to U.S. prudential initial- and variation-margin rules, while subsidiaries also face European and Asian regulation.

Federal Reserve single-counterparty limits cap aggregate net credit exposure at 25% of Tier 1 capital to an unaffiliated counterparty and 15% to a major counterparty (a G-SIB or non-bank SIFI). Breaches generally have a 90-day cure period, during which additional credit transactions are restricted absent a temporary limit increase.

Resolution planning and creditor exposure

BNY maintains recovery and resolution plans. The FDIC’s June 2024 rule moved resolution-plan submissions for G-SIB-affiliated insured banks from a three-year to a two-year cycle, expanded content and added notices for specified extraordinary events. Under the FDIC’s December 31, 2025 update, The Bank of New York Mellon was to submit content equivalent to an interim supplement by July 1, 2026; its last insured-bank plan was filed December 1, 2023. BNY’s 2023 full holding-company plan had no deficiencies or shortcomings identified; it filed a targeted plan on July 1, 2025, and its next full plan is due July 1, 2027. An unremedied finding that a plan is not credible could lead to higher capital, leverage or liquidity requirements, limits on growth or activities, or divestitures.

BNY’s single-point-of-entry strategy contemplates parent-company bankruptcy while key operating subsidiaries continue operating with sufficient capital and liquidity. The IHC facilitates that support under a binding agreement; the Parent transferred intercompany loans and most cash to the IHC and must continue transferring cash and other liquid assets. U.S. and foreign resolution regimes may impose stays, transfer assets or liabilities to bridge entities, bail in or repudiate contracts, and produce outcomes different from ordinary bankruptcy. In an insured-bank receivership, domestic deposit liabilities and administrative claims receive priority over other unsecured claims; foreign-branch depositors may recover substantially less than U.S.-office depositors, or nothing.

Regulatory environment and business implications

BNY and its U.S. bank subsidiaries were “well capitalized” as of Dec. 31, 2025. Maintaining BNY’s financial holding company status also depends on the U.S. insured banks remaining well capitalized and well managed and maintaining at least a satisfactory Community Reinvestment Act rating. Losing that status could limit BNY’s activities and acquisitions. Federal Reserve changes in November 2025 revised how “well managed” status is assessed and emphasized material financial risks in supervision; related proposals from the OCC and FDIC would remove reputation risk from supervision and establish a uniform definition of an unsafe or unsound practice. The timing and outcome of Dodd-Frank incentive-compensation rulemaking remain uncertain.

Deposit insurance, assessments and banking-group obligations

Deposits at BNY’s U.S. banking subsidiaries are insured up to $250,000 per depositor per insured bank, subject to the FDIC’s authority to terminate coverage in specified circumstances. Regular Deposit Insurance Fund assessments are based on average consolidated assets less average tangible equity. Certain qualifying custody-related liquid assets may be deducted, subject to a cap.

A special FDIC assessment to recover losses from the 2023 failures of Silicon Valley Bank and Signature Bank began in Q1 2024 and was initially designed to run for eight quarters. It is based on estimated uninsured deposits at Dec. 31, 2022, excluding the first $5 billion at the banking-organization level. BNY accrued estimated assessments and adjustments in noninterest expense beginning in Q4 2023 and through 2025. On Dec. 16, 2025, the FDIC proposed reducing the assessment and providing offsets to regular assessments if collections ultimately exceed losses.

BNY is required to serve as a source of financial and managerial strength to its bank subsidiaries and may need to provide support during financial distress. Parent-company support commitments may receive priority in bankruptcy, while bank subsidiaries may in some circumstances be liable for losses of another subsidiary. Parent loans to bank subsidiaries rank behind depositor and certain other claims. Transactions between banks and affiliates are restricted, generally must be secured and on market terms, and affiliate credit extensions are capped at 10% of a bank’s capital and surplus for one affiliate and 20% for all affiliates.

Compliance, technology and operational risks

BNY’s AML and counter-terrorist-financing obligations include controls, independent testing, training, customer due diligence and beneficial-owner identification, with enhanced diligence for certain foreign correspondent and private-banking relationships. A FinCEN rule adopted in August 2024 extends requirements to certain investment advisers; its effective date was extended to Jan. 1, 2028, and BNY says it will implement a compliant program. New York also requires transaction-monitoring and sanctions-screening programs and annual certification.

Cybersecurity rules create significant response and disclosure obligations. Banking organizations must notify federal regulators within 36 hours of specified significant incidents; SEC rules generally require public disclosure within four business days after determining an incident is material. Regulation S-P amendments require incident-response programs and generally customer notification within 30 days after awareness of unauthorized access or use. BNY’s compliance date was December 2025, and it implemented a program. New York requirements also address cybersecurity programs, third parties and annual certification.

The EU AI Act phases in requirements from Feb. 2, 2025 through Aug. 2, 2027; BNY has assessed its impact and established an implementation program. BNY is also evaluating evolving digital-asset rules in the U.S., EU and UK.

Sustainability, market and prudential changes

Sustainability requirements are changing across jurisdictions. California laws provide for emissions reporting beginning in August 2026 and climate-risk reporting beginning Jan. 1, 2026, although enforcement of SB 261 was stayed by the Ninth Circuit on Nov. 18, 2025. EU changes are expected to narrow and simplify CSRD/CSDDD coverage, and BNY expects fewer of its companies to be in scope. BNY SA/NV issued its first CSRD report in 2025 for 2024 and plans to use simplified EU Taxonomy reporting for FY2025. UK anti-greenwashing requirements apply; a proposed EU SFDR overhaul could substantially change sustainability disclosures and introduce new product categories, potentially taking effect in 2027 or 2028. Some jurisdictions are also restricting financial institutions from denying or canceling services based on social credit scores or certain sustainability factors.

Other significant changes include SEC Treasury-clearing requirements, with compliance due Dec. 31, 2026 for eligible cash transactions and June 30, 2027 for eligible repo transactions; expanded SEC fund-name requirements, with compliance dates in June or December 2026; and EU CRR3/CRD6 and UK Basel 3.1 changes that could affect capital, liquidity, governance and reporting. European and UK securities settlement cycles are expected to move from T+2 to T+1 on Oct. 11, 2027, subject to final rules.

EU operational-resilience requirements under DORA applied from Jan. 17, 2025, while UK firms were required to complete implementation by March 31, 2025. The EU AIFMD II/Omnibus Directive, in force since April 15, 2024, updates depositary rules and establishes frameworks for alternative-fund loan origination and liquidity management, as well as UCITS liquidity-management tools. Member States must implement relevant provisions by April 2026. The European Commission recognizes omnibus custody-account structures, but depositaries and trustees, including BNY, must maintain their own books and records. BNY is assessing the effects on its depositary, fund-servicing and investment-management businesses.

Overall, the section describes potentially ongoing compliance and assessment costs, alongside legal, operational and reputational risks across BNY’s banking, custody, securities-services, markets, wealth and investment-management activities; it does not quantify their financial impact.

BNY — Risk Factors

BNY’s risk profile reflects its role as a large, interconnected custody and financial-services provider, its reliance on fee income and client deposits, and its exposure to evolving technology, markets, regulation and geopolitical events. The risks described are potential exposures, not quantified estimates of future losses.

Operations, technology and cybersecurity

BNY processes large volumes of complex transactions and has experienced operational errors, delays and system disruptions; similar incidents may continue. Errors can be difficult to detect and remediate, while automation and AI may amplify their effects. Failures could disrupt client service, payments or settlement and lead to financial losses, client claims, regulatory action, litigation and reputational damage. Incorrect digital-asset transfers may be irreversible.

Cyber threats—including malware, denial-of-service attacks, phishing, deepfakes and attacks exploiting software vulnerabilities or human error—are expected to grow in frequency and sophistication. Remote access, cloud and mobile services, interconnected systems, and reliance on vendors and other third parties expand potential points of attack. Incidents may go undetected, require disclosure before investigations are complete, and expose or destroy information, disrupt operations or market connections, and require data reconstruction or client remediation. Distributed-ledger vulnerabilities could result in losses of custodied digital assets that may be difficult to recover.

BNY’s resilience also depends on affiliates, vendors, sub-custodians, exchanges, clearing houses and other financial-market infrastructure. Provider concentration, geographic concentration and limited ability to monitor or control third parties can magnify disruptions, including market-wide settlement problems. Business-continuity and incident-response plans, insurance and substantial technology investment may not prevent or adequately mitigate losses or ensure that investments improve competitiveness or profitability.

AI may improve productivity and client services, but poor implementation, inaccurate or biased outputs, inadequate oversight, confidentiality and intellectual-property issues, cyber exposure and evolving regulation could cause disruption, costs, sanctions or litigation. BNY also risks falling behind if it fails to adopt AI effectively or achieve expected benefits; shortages of components such as chips could impede adoption. Digital engineers and other automated systems add risks of errors, unexpected behavior and unclear accountability. Quantum computing and other transformative technologies may also alter competitive and security risks.

Markets, revenue and credit

Fee-based businesses generated 72% of total revenue in FY2025. Fees depend on transaction volumes, assets managed or administered, securities-lending activity and spreads, and client demand. Weak markets, lower activity, asset outflows or falling asset values can reduce fees; poor relative investment performance and shifts toward lower-fee products can undermine client retention, inflows and revenue. Lower Investment Management revenues or other market factors could also contribute to goodwill impairment.

Net interest income and margins are sensitive to the yield curve, deposit mix, and repricing and duration of assets and liabilities. Rising rates may contribute to volatility, lower asset values, deposit outflows or migration to higher-cost accounts, funding pressure and borrower defaults. Falling rates or a flat or inverted curve can also compress margins and spread-based revenue and accelerate mortgage-backed-security prepayments. A sustained flight to safety may increase deposits and demand for liquid assets while reducing trading, capital-markets and cross-border activity; low-yielding placement of excess deposits may weigh on earnings.

At December 31, 2025, approximately 68% of BNY’s securities portfolio was available-for-sale (AFS), carried at fair value with after-tax unrealized gains and losses reflected in AOCI, and approximately 32% was held-to-maturity (HTM), carried at amortized cost. The portfolio was approximately 32% of consolidated assets, a higher proportion than at many major U.S. financial institutions, reflecting BNY’s custody and trust-bank model. AFS valuation changes affect CET1 capital; HTM valuation changes generally do not, but BNY may be constrained from selling HTM securities absent significant issuer-credit deterioration. Market disruption may make valuations less observable, and realized values may differ from estimates. Changes in intent or ability to hold impaired AFS securities could require recognition in earnings of the full fair-value shortfall below amortized cost.

BNY has secured and unsecured exposure to clients and counterparties, particularly financial institutions and sovereigns, through trading, clearing, financing, custody and securities lending. Volatility can increase intraday credit, settlement exposures and overdrafts as collateral values fall. Concentrations, collateral disputes, unenforceable rights, illiquid markets and counterparty failures may produce losses, increase capital or funding needs, or limit BNY’s ability to sell or reuse collateral. Commercial real estate, including the New York metropolitan area, is identified as a potentially material concentration. Securities-lending activity also exposes BNY to replacement costs if borrowers fail to return securities and, in some cases, losses on investments of cash collateral. Allowances for credit losses depend on estimates and assumptions that may not reflect actual conditions.

Liquidity, capital and regulation

Client deposits are an important, relatively low-cost funding source but could run off following market stress, elevated rates, business declines, downgrades, negative publicity or regulatory action; rapid circulation of inaccurate information may worsen outflows. Market disruption, collateral calls, committed-credit draws or restricted access to funding could require BNY to borrow at higher cost, sell assets at discounts, reduce assets, or issue preferred or common equity, potentially diluting shareholders and limiting repurchases or dividends. Excess liquidity inflows can also increase interest expense and pressure capital ratios.

BNY is subject to extensive U.S. and international requirements affecting capital, liquidity, products and distributions, including LCR, NSFR, G-SIB, TLAC, resolution planning and stress-testing requirements. Holding liquid assets to meet LCR and NSFR requirements can weigh on returns. Regulatory changes, model revisions or higher operational-risk RWAs could alter capital and liquidity measures; shortfalls or deficiencies in resolution plans could constrain growth, distributions or business activity. The non-operating Parent depends on subsidiary dividends and IHC credit extensions, which may be restricted and are not freely transferable. Parent-company securities are structurally subordinated to subsidiary liabilities, including bank depositors’ claims.

Dividends and repurchases are discretionary and subject to board approval, legal limits, capital buffers, CCAR results and Federal Reserve oversight; common distributions are generally restricted if preferred dividends are unpaid. Ratings downgrades could raise funding costs, reduce market access and trigger additional collateral requirements or termination rights. Under the Title I single-point-of-entry strategy, Parent support to subsidiaries may leave Parent security holders with significant losses, potentially including the entire investment; a Title II FDIC resolution could likewise impose losses on Parent shareholders and unsecured creditors.

Regulation, litigation and execution

Changing and overlapping regulation—including rules on cybersecurity, data, AI and digital assets—may increase costs, require additional capital or liquidity, restrict products and distributions, or lead BNY to suspend or exit activities. Sanctions, anti-corruption, anti-money-laundering and privacy obligations apply across a broad international network; violations can bring penalties, restrictions and reputational damage. BNY also faces inquiries, investigations, lawsuits and proceedings in multiple jurisdictions. Outcomes can be costly and difficult to estimate, and losses may materially exceed accruals; remediation delays can prompt further action. BNY reports actual and threatened Russian litigation over payments it says it cannot make under sanctions laws.

Risk-management controls and models may not keep pace with changes in businesses, technology, markets or regulation. Inaccurate information, human error, misconduct or weak controls can lead to unexpected losses and reporting failures; models may fail under stress or rely on inaccurate assumptions and data. BNY’s ability to execute depends on attracting and retaining specialized talent, including technology, AI and risk personnel, amid competition and compensation constraints.

Strategic initiatives—including AI, real-time electronic payments, global collateral management, Wove and the platforms operating model—may incur costs, face control or regulatory hurdles, or fail to deliver expected efficiencies. Acquisitions, dispositions, joint ventures and alliances carry approval, integration, separation and counterparty risks. Competition from larger firms and less-regulated fintechs, technology companies, stablecoin issuers and data providers has created and may continue to create pricing pressure and constrain profitability.

External, reputational and other risks

Geopolitical conflict, sanctions, trade restrictions, policy shifts, recession, sovereign or U.S. debt-ceiling concerns, pandemics and climate-related disasters could disrupt operations and markets, increase cyber threats, reduce asset values and worsen client and counterparty credit quality. Severe weather may affect BNY’s properties, including its Hudson River waterfront headquarters, and increase insurance costs or reduce availability.

Adverse events, allegations or misinformation—whether accurate or not—may weaken confidence among clients, regulators, employees, investors and other stakeholders. Sustainability expectations differ across jurisdictions, creating potential conflicts and risks around disclosures, products, greenwashing allegations and client or employee retention. Tax-law changes, challenges to tax positions and unachieved tax-credit benefits could increase expense or reduce benefits. Accounting changes and uncertain estimates for credit losses, goodwill, intangible assets and legal contingencies may alter reported results; prolonged downturns or adverse assumptions could trigger material non-cash goodwill impairment.

Recent accounting developments

As of December 31, 2025, BNY had not adopted three issued FASB accounting updates and was evaluating their effects. It had not quantified the expected financial impact of any of them.

• ASU 2024-03—expense disaggregation: Requires expanded note disclosures for specified expenses, including employee compensation, depreciation and amortization of intangible assets, as well as total selling expenses and an annual definition of selling expenses. It is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027; early adoption is permitted. BNY was assessing the impact on its expense disclosures.

• ASU 2025-06—internal-use software: Revises accounting and disclosure guidance for internal-use software costs, including the “probable-to-complete” threshold used to determine whether a project is expected to be completed and the software used as intended. It is effective for annual periods beginning after December 15, 2027, including interim periods within those annual periods; early adoption is permitted. Application may be prospective, retrospective, or modified prospective. BNY was evaluating the guidance.

• ASU 2025-09—hedge accounting: Addresses five hedge-accounting issues, with the aim of helping entities apply and maintain hedge accounting for highly effective economic hedges and better align accounting with risk-management activities. It is effective for annual periods beginning after December 15, 2026, and generally applies prospectively; certain changes to existing cash-flow hedges may be made at adoption. BNY expected to early adopt the update in Q1 2026.

Overall, the updates concern future expense transparency, software-cost accounting, and alignment of hedge accounting with risk management. BNY had not yet quantified their effects, but planned early adoption of the hedge-accounting update.

Non-GAAP financial measures

BNY supplements GAAP results with non-GAAP measures on a tangible basis. These measures exclude goodwill and intangible assets, net of deferred tax liabilities. The company considers return on tangible common shareholders’ equity and tangible book value per common share useful indicators of returns and of tangible assets available relative to common shares.

BNY also presents revenue and expense measures adjusted for notable items, including disposal gains and losses, severance, litigation reserves, and the FDIC special assessment. Litigation reserves cover probable and reasonably estimable loss contingencies but exclude routine business-related legal fees. Related adjusted measures include income before taxes, net income applicable to common shareholders, diluted EPS, returns on common equity and tangible common equity, and pre-tax operating margin. Management says these exclusions align the measures with how it evaluates its businesses; the adjusted measures are supplemental and are not substitutes for GAAP results.

For investment management and performance-fee growth, BNY also presents constant-currency measures. It applies current-period exchange rates to prior-period revenue to isolate underlying revenue changes from foreign-exchange movements.

BNY may discuss forward-looking non-GAAP measures, such as expense targets excluding notable items, without reconciling them to GAAP. It says future amounts and timing cannot be meaningfully or accurately estimated without unreasonable effort, and the unavailable reconciling amounts could be significant to future results. This section provides no period-specific financial results or quantitative changes.

FY2025 results

Revenue increased 8% year over year; excluding a $52M disposal gain, adjusted revenue also rose 8%. GAAP noninterest expense increased 3%, as did adjusted expense. Common-shareholder net income rose 22% on a GAAP basis and 19% on an adjusted basis; diluted EPS increased 28% and adjusted diluted EPS 24%. Notable items reduced diluted EPS by $0.10 in FY2025, compared with $0.23 in FY2024.

Returns and tangible equity

Average tangible common shareholders’ equity is a non-GAAP measure that adds back specified deferred tax liabilities. Adjusted earnings for the adjusted tangible-equity return calculation exclude intangible amortization and notable items; these amounts differ from adjusted net income shown above.

Investment and performance fees

Consolidated fees declined 2%; Investment and Wealth Management fees also fell 2%, or 3% on a constant-currency basis. FY2024 fees were $3.163B on a constant-currency basis; a $24M favorable foreign-exchange impact contributed to the difference from reported fees.

Notable items

FY2025 notable items included a $52M disposal gain, $214M of severance expense, an $8M litigation-reserve credit, and a $64M FDIC special-assessment credit. FY2024 included $240M of severance expense, $44M of litigation reserves, and a $63M FDIC-assessment credit, with no disposal gain. FY2023 adjusted-return calculations also excluded notable items, including an FDIC assessment, severance, litigation reserves, a reduction in the fair value of a contingent-consideration receivable, and disposal losses.

Rate/volume analysis (unaudited; FTE basis)

Changes are in $ millions. In 2025, favorable volume effects increased net interest income, while lower rates reduced it. Lower liability rates materially eased funding costs, but declines in asset yields largely offset that benefit.

2025 vs. 2024

The increase in interest income was nearly flat overall: higher balances contributed substantially, but lower rates largely offset that benefit. Deposit expense fell sharply as lower rates more than offset the volume effect; higher expense on federal funds purchased and repurchase agreements partially offset that relief.

2024 vs. 2023

Repurchase-agreement expense increased $3,275 million, primarily because of rates (+$4,590 million), partly offset by lower balances (−$1,315 million). Deposit expense increased $1,523 million. Strong rate-driven increases in both interest income and interest expense largely canceled, leaving net interest income nearly unchanged.

Forward-Looking Statements and Key Risks

BNY’s forward-looking statements address expected financial performance, liquidity and capital, dividends and share repurchases, interest-rate and net-interest-income sensitivities, expenses and technology investment, efficiency savings, strategic initiatives, acquisitions and divestitures, and its transition to a platforms operating model. These statements involve uncertainty, and actual results may differ materially.

Key risks include:

• Revenue, markets and rates: BNY depends on fee-based revenue, which may be affected by lower market activity, weak asset markets, investment underperformance, or changes in savings and investment preferences. Interest-rate movements may affect profitability and capital. Volatile or illiquid markets may also lead to realized or unrealized securities losses.
• Credit, counterparties and funding: BNY has exposures to major financial institutions and sovereign entities and could face client or counterparty failures. Credit-loss allowances and reserves for lending-related commitments may prove inadequate. Liquidity, capital, funding costs, credit-rating downgrades, and maintaining regulatory “well capitalized” or “well managed” status are material concerns.
• Parent-company distributions: The Parent is a non-operating holding company that relies on subsidiary dividends and IHC credit extensions to meet obligations and fund shareholder returns. Capital distributions are subject to Board discretion and legal and regulatory constraints.
• Operations, technology and controls: Risks include processing errors or delays; failures at BNY or third parties; cybersecurity incidents; model limitations; ineffective risk management or controls; and risks related to developing or using artificial intelligence.
• Other business and external risks: These include extensive and changing regulation, enforcement actions and litigation, competition, talent retention, reputational harm, execution of strategic projects and failure to realize expected benefits from the platforms model, geopolitical events and natural disasters, sustainability-related expectations, tax challenges, and accounting-standard changes.

Management assessed internal control over financial reporting as effective as of December 31, 2025, under the COSO 2013 framework; KPMG issued a report on internal-control effectiveness.

KPMG concluded that BNY maintained effective internal control over financial reporting in all material respects as of December 31, 2025, and issued unqualified opinions on BNY’s consolidated financial statements for the years ended December 31, 2025, 2024, and 2023. The report identified no material control weakness or 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.

FY2025 results

BNY’s revenue growth was driven by higher net interest income and fee revenue, while lower credit-loss provisions and a lower average diluted share count contributed to stronger earnings. Net interest income increased 14.7%; interest income was nearly flat, while interest expense declined. Noninterest expense rose 2.8%, including higher software and equipment expense, but remained below FY2023. The credit-loss provision was a benefit in FY2025, compared with provisions in the prior two years.

Balance sheet and capital

At December 31, 2025, deposits and net loans were higher than a year earlier. Securities totaled $150.200 billion. Held-to-maturity securities were reported at amortized cost, with fair value below that amount; available-for-sale securities were reported at fair value.

Tangible common equity was approximately $19.888 billion, calculated as common shareholders’ equity less goodwill and other intangible assets.

Cash flow and shareholder returns

Operating cash flow increased substantially from FY2024, in part because changes in trading assets and liabilities provided cash rather than using it. Investing cash outflows included deployment into interest-bearing deposits at central banks and net loan growth. Capital expenditures—premises and equipment plus capitalized software—rose from FY2024. Financing inflows largely reflected deposit growth. BNY also issued and redeemed preferred stock, repurchased common shares, and paid common dividends.

FY2025 operating cash flow included a $0.984 billion contribution from changes in trading assets and liabilities, compared with a $5.639 billion cash use in FY2024; changes in accruals and other items used $1.797 billion, versus $0.188 billion provided in FY2024. Investing activity included $23.196 billion deployed into interest-bearing deposits at central banks and $8.897 billion of net loan growth. Financing activity included a $35.688 billion increase in deposits, $1.483 billion of preferred stock issuance and $1.000 billion of preferred stock redemptions, $3.535 billion of common stock repurchases, and $1.447 billion of common dividends.

Other comprehensive income was $1.627 billion in FY2025 versus $235 million in FY2024, principally reflecting $999 million of net unrealized gains on available-for-sale assets and $586 million of foreign-currency translation adjustments. Total comprehensive income was $7.210 billion versus $4.778 billion. Stock-based compensation expense was $562 million, up from $423 million in FY2024.

Significant Accounting Policies

BNY provides financial services to institutions, corporations and high-net-worth individuals through Securities Services, Market and Wealth Services, and Investment and Wealth Management. Its most significant accounting estimates involve expected credit losses, goodwill and other intangible-asset impairment, and litigation and regulatory contingencies. These estimates rely on complex, subjective assumptions about economic and market conditions, and actual outcomes could materially affect results and financial condition.

Credit losses and impairment

BNY estimates expected credit losses over the contractual life of covered financial instruments using quantitative models and qualitative adjustments. Portfolio models generally use probability-of-default methods and group assets with similar risk characteristics. Forecasts incorporate baseline, upside and downside macroeconomic scenarios, updated quarterly; management may change scenario weightings as the outlook shifts. A qualitative allowance overlay addresses risks that models may not capture, including concentrations, scenario sensitivity, economic conditions and idiosyncratic risks.

Loans and lending commitments include pooled commercial and institutional/CRE exposures, pooled residential mortgages, and individually evaluated credits—generally loans of $1 million or more that no longer share risk characteristics with other loans. Nonperforming and modified loans are generally evaluated individually. Individual assessments consider borrower payment status and financial condition, collateral and guarantor support, expected cash flows and recoveries. Expected losses are measured using the present value of borrower cash flows discounted at the loan’s effective interest rate, or collateral fair value for collateral-dependent loans. CRE models consider collateral, geography and property type; mortgage models consider portfolio and loan characteristics, prepayments, defaults and loss severity. Commercial loans generally enter nonaccrual at 90 days past due or when collection is doubtful; residential first- and second-lien mortgages are individually evaluated and placed on nonaccrual at 90 days delinquent. Write-offs reduce the allowance when assets are deemed uncollectible. Accrued interest is excluded from loss measurement because uncollectible interest is charged off under the nonaccrual policy.

For available-for-sale (AFS) debt securities, when fair value is below amortized cost, BNY recognizes impairment in earnings if it intends to sell, or is more likely than not required to sell, before recovering amortized cost. If it intends and is able to hold the security, credit losses are recognized through an allowance capped at the impairment amount. Assessments consider loss severity, ratings, credit enhancements and cash-flow deterioration. AFS structured securities in unrealized loss positions use a multi-scenario macroeconomic methodology; held-to-maturity (HTM) estimates use probability-of-default and loss-given-default assumptions, with structured securities modeled individually for principal losses. Changes in discounted expected cash flows, including passage-of-time effects, affect the allowance.

BNY does not currently estimate expected credit losses on U.S. Treasury, agency debt and certain other qualifying securities, which remain subject to recurring governance review. For reverse repos, margin lending and securities-lending indemnifications, estimates focus on potential uncollateralized exposure when a counterparty is reasonably expected not to replenish collateral. Reverse repos are short-term and continuously over-collateralized. Purchased credit-deteriorated assets are assessed at purchase, with subsequent expected-cash-flow changes affecting earnings through the allowance; BNY purchased none in 2025 or 2024 and owned none at either Dec. 31, 2025 or Dec. 31, 2024.

Investments, fair value and consolidation

Debt securities are classified at purchase as AFS (fair value, with unrealized changes generally in OCI), HTM (amortized cost, net of expected credit losses), or trading (fair value changes in earnings). Loans are carried at amortized cost, net of unearned income and deferred fees or costs; loans held for sale are carried at the lower of cost or fair value. Non-consolidated equity securities are generally measured at fair value through earnings, subject to specified cost and practicability exceptions.

Fair value follows a three-level hierarchy based on the lowest significant input: Level 1 active-market quoted prices, Level 2 other observable or corroborated inputs, and Level 3 significant unobservable inputs. Valuations may use discounted cash flows, comparable instruments and models. Illiquid or less-active markets, concentration and unobservable assumptions require judgment and may lead to valuation adjustments; model choices can produce materially different estimates, and values in illiquid markets may not equal net realizable or future fair value. Derivative values are also sensitive to BNY’s and counterparties’ credit spreads. At Dec. 31, 2025, approximately 99% of securities were valued by pricing sources with reasonable price transparency, and BNY reported no Level 3 securities or derivatives. Most derivatives are model-valued using observable market parameters and classified Level 2.

Consolidation depends on whether BNY holds a variable interest and, for a variable-interest entity, whether it has both power over the activities that most affect performance and potentially significant exposure to losses or benefits. Non-VIE entities are generally consolidated when BNY controls financial and operating policies, typically with at least 50% voting interest. Foreign-currency translation gains and losses for foreign entities with non-U.S.-dollar functional currencies are recorded in OCI; transaction effects are included in foreign-exchange revenue. Resale agreements are treated as collateralized financings and are generally fully collateralized by high-quality liquid securities.

At Dec. 31, 2025, BNY held a 50% interest in CIBC Mellon with a book value of $678 million and a 20% interest in Siguler Guff with a book value of $227 million. Equity-method accounting generally applies where ownership is below a majority but BNY has at least 20% ownership or significant influence; other-than-temporary declines are written down to fair value.

Revenue, derivatives and other policies

Investment-services and investment-management fees are recognized as performance obligations are satisfied, net of waivers and excluding amounts collected for third parties. Performance fees are recognized only when earned, determinable and not subject to probable reversal. Fees subject to clawbacks are deferred until collection is sufficiently certain; portfolio underperformance may require future outperformance before additional fees are earned. Non-refundable outsourcing implementation fees and eligible setup costs are generally deferred and recognized over the expected customer relationship; premature termination accelerates recognition of remaining deferred amounts. Interest income and expense use the effective-yield method, with premiums, discounts and prepayments adjusting yield over the contractual life.

Derivatives are carried at fair value and generally netted by counterparty after eligible collateral under enforceable agreements. Trading gains and losses generally enter foreign-exchange or investment and other revenue. Qualifying fair-value hedge changes are recognized in earnings; cash-flow hedge changes initially enter OCI and are reclassified when the hedged item affects earnings. Hedge relationships require formal documentation and ongoing effectiveness monitoring at least quarterly.

Goodwill and indefinite-lived intangibles are not amortized and are tested annually, or more frequently when impairment indicators arise. Finite-lived intangibles are amortized over estimated benefit periods and reviewed for impairment when circumstances warrant. Premises and equipment are depreciated straight-line over estimated useful lives of 2–40 years. Qualifying internal-use software costs are capitalized and amortized; other project costs are expensed. Lease assets and liabilities reflect discounted payments over the reasonably certain lease term. Seed-capital gains and losses are generally reported in investment and other revenue unless consolidation is required; managed-fund seed investments may use published NAV, and qualifying SBIC private-equity investments use NAV as a practical expedient.

U.S. pension plans and BNY’s largest foreign plan, in the UK, have frozen benefit accruals. Pension obligations depend on high-quality corporate bond discount rates and other actuarial assumptions. For frozen plans, excess unrecognized actuarial gains and losses are amortized over participants’ average future life expectancy, capped at 15 years. Share-based compensation is generally expensed straight-line over vesting, with certain retirement-eligible awards expensed by the date the employee first qualifies; some performance share units subject to compensation-committee discretion are marked to market through earnings. Severance is recorded when management commits to qualifying separations and the liability is reasonably estimable.

Accounting changes

Effective in 2024 and applied retrospectively, qualifying renewable-energy project investments through LLCs use the proportional amortization method; previously they were equity-method investments using the hypothetical liquidation at book value approach. Renewable-energy and affordable-housing tax-credit investments use proportional amortization, with commitments and unfunded liabilities recorded on the balance sheet. BNY adopted ASU 2023-09, expanded income-tax disclosure guidance, on Jan. 1, 2025, retrospectively; the required disclosures are included in Notes 11 and 25, with no quantified effect on earnings or financial position.

Securities portfolio

BNY’s securities portfolio expanded in 2025, while its fair value remained below amortized cost. Unrealized losses declined substantially in both available-for-sale (AFS) and held-to-maturity (HTM) portfolios. Management said losses primarily reflected interest-rate increases since purchase or, for transferred securities, since transfer.

The securities allowance for credit losses was less than $1M at both year-ends and related to other debt securities. HTM credit quality remained strong: 98% of securities were rated AAA/AA- and 2% A+/A- at Dec. 31, 2025, compared with 100% AAA/AA- a year earlier.

Portfolio repositioning, results and yields

During 2025, BNY transferred agency RMBS with $1.5B amortized cost and $1.5B fair value from AFS to HTM. In 2024, it transferred U.S. Treasury securities and CLOs with $4.0B amortized cost and $3.7B fair value. The transfers were intended to reduce the effect of interest-rate changes on accumulated other comprehensive income.

In 2025, gross realized gains were $19M and gross realized losses were $99M. Non-U.S. government securities accounted for the largest loss by security type ($54M); other losses were $23M and non-agency RMBS losses were $3M. U.S. Treasuries and other asset-backed securities had no net loss.

At Dec. 31, 2025, total securities yield was 3.15% on a tax-equivalent basis, calculated on amortized cost and excluding related hedging derivatives. AFS yield was 3.50% and HTM yield was 2.41%. The portfolio included AFS non-U.S. government securities with $28.568B fair value and U.S. Treasuries with $25.711B fair value, as well as HTM agency RMBS with $26.432B amortized cost.

Liquidity and collateral

Of 2025 pledged assets, $90B secured potential Federal Reserve Discount Window borrowing and $10B secured FHLB borrowing. The pledged assets comprised $122B of securities, $17B of loans, $7B of trading assets and $1B of interest-bearing bank deposits. BNY reported no Discount Window borrowing and regularly moves assets into and out of the pledged account.

Loans and credit quality

BNY’s loan portfolio expanded 12.6% in 2025, led by margin lending. CRE remained the principal source of loan losses and nonperforming loans, although both declined. The company emphasizes investment-grade clients that use its non-credit services and describes collateral and underwriting standards across key lending areas.

Loans

Margin loans grew 37.2% year over year and were secured by marketable securities; borrowers must maintain daily collateral margins above 100% of loan value, and BNY reports historically rare losses. Overdrafts primarily arise in daily custody and securities-clearance activity and are generally repaid within two business days.

Financial-institution loans totaled $13.309B; 96% met BNY’s internal investment-grade equivalent, 64% was secured and 79% matured within one year. CRE lending targets experienced owners and moderate leverage supported by existing cash flows, but CRE continued to account for most loan charge-offs and nonperforming loans. Wealth management mortgages were primarily interest-only, adjustable-rate loans to high-net-worth borrowers, with a 61% weighted-average loan-to-value ratio at origination and less than 1% past due. Geographic concentrations were California (20%), New York (14%), Florida (11%) and Massachusetts (8%). Capital-call financing is secured by private-equity fund investor commitments and call rights.

Credit losses and asset quality

The 2025 provision was a $31M benefit, compared with expenses of $59M in 2024 and $131M in 2023. Net charge-offs in 2025 were mainly $19M in CRE, partly offset by $3M of net recoveries in wealth management loans; in 2024, they were primarily $82M in CRE. The provision figures exclude other-financial-instrument amounts: a $1M benefit in 2025, $11M expense in 2024 and $12M benefit in 2023.

Individually evaluated impaired loans at year-end 2025 were collateral-dependent, with $157M of loans and $158M of collateral value; the comparable 2024 figures were $247M and $258M. Although total past-due loans increased, none were 90 or more days past due in either year. 2025 past-due balances included $71M of wealth management loans, $51M of wealth management mortgages, $27M of other residential mortgages and $10M of CRE.

BNY modified two CRE loans totaling $165M in 2025, extending them to maturity, and modified two residential mortgages totaling less than $1M through payment changes. None of the loans modified in the prior 12 months were more than 90 days past due at year-end. In 2024, five modified CRE exposures totaled $212M, plus $20M of unfunded commitments; $118M of loans were repaid and $16M of commitments canceled before year-end. Reverse repurchase agreements were fully secured by high-quality collateral at both year-ends, with no related credit-loss allowance.

Operating leases

2025 lease expense comprised $231M of operating-lease expense, $43M of variable expense and $29M of sublease income. Future lease payments totaled $1.712B, less $269M of imputed interest; $784M of payments are due in 2031 and thereafter.

Goodwill

The 2025 increase included $200M of foreign-currency translation, offset by $18M of dispositions and $13M of other reductions. No goodwill impairment was recorded in 2025. A cumulative $680M impairment loss remains allocated to Investment and Wealth Management. In 2024, an acquisition added $426M of goodwill; business realignment shifted goodwill among segments without changing the consolidated total.

BNY tested its Investment Management reporting unit each quarter. At Dec. 31, 2025, it had $6.3B of allocated goodwill, and fair value exceeded carrying value by approximately 10%; the valuation used management projections and a 10% discount rate. The other six reporting units were tested in Q2, with fair values substantially above carrying values. Valuations rely on long-range assumptions about assets under management and their mix, market values, operating margins and long-term growth. Changes in assumptions or discount rates could lead to a material, non-cash goodwill impairment.

Intangible assets

At Dec. 31, 2025, finite-lived assets had a gross carrying amount of $1.600B and accumulated amortization of $1.366B. Their net balance comprised Securities Services customer contracts of $163M, Market and Wealth Services customer contracts of $1M, Investment and Wealth Management customer relationships of $45M, and other amortizing assets of $25M. Indefinite-lived assets comprised tradenames of $1.294B and customer relationships of $1.294B.

Amortization expense was $45M in 2025, versus $50M in 2024. Estimated annual amortization expense declines from $37M in 2026 to $19M in 2030. Indefinite-lived intangible assets are tested annually, or more frequently if impairment indicators arise.

Other assets and related investments

At Dec. 31, 2025, other assets totaled $26.440B, up 2.9% from $25.690B a year earlier. The largest components included corporate/bank-owned life insurance, unsettled securities-sale receivables, tax-credit investments and software.

The “other assets” component includes $57M of Federal Home Loan Bank stock at cost in each year.

Equity securities and NAV-valued investments

Non-readily marketable equity securities carried under the measurement alternative—cost less impairment, adjusted for observable orderly transaction prices—were $438M at Dec. 31, 2025, compared with $413M. Observable price changes affect investment and other revenue. FY2025 adjustments were $15M net downward, comprising $32M upward and $47M downward adjustments; the net downward adjustment was $1M in FY2024, versus a net upward adjustment of $11M in FY2023. Life-to-date adjustments were $266M net upward, comprising cumulative upward adjustments of $368M and downward adjustments of $102M.

Seed investments are generally redeemable on request, subject to the underlying funds’ liquidation and redemption periods of up to seven days. Private-equity investments, primarily Volcker Rule-compliant SBICs, have no redemption rights; proceeds are generally distributed as underlying investments are liquidated over their 10-year lives.

Tax-credit investments

Tax-credit investments, primarily in affordable-housing and renewable-energy projects, increased to $3.151B from $2.821B. Credits and other tax benefits were $682M in FY2025, compared with $418M in FY2024 and $373M in FY2023; related amortization expense was $590M, $343M and $293M, respectively. Both benefits and amortization are recognized through income-tax expense under the proportional-amortization method. Future funding commitments were $946M at Dec. 31, 2025, down from $951M, and were recorded in other liabilities; most were expected to be funded over the next five years.

Time deposits

Time deposits of $250,000 or more totaled $2.2B at Dec. 31, 2025, compared with $2.1B a year earlier. Scheduled maturities were:

No time-deposit maturities were scheduled after 2030.

Revenue model and recognition

Fee revenue in Securities Services, Market and Wealth Services, and Investment and Wealth Management is primarily variable, driven by assets under custody and/or administration (AUC/A), assets under management (AUM), client transactions, securities-lending volumes and spreads, and product mix. Many asset-based fees are calculated in arrears. Substantially all Securities Services and Market and Wealth Services services are recognized over time; transaction, account, distribution, and servicing fees are generally recognized when the service is completed. As a result, fee growth is exposed to market levels, client activity, and asset mix.

Fee and contract revenue

Contract revenue by business segment

Total fee and other revenue by business segment, including revenue outside ASC 606

Segment information is prepared on an internal management basis, not a GAAP basis.

Contract revenue by fee type

Investment services fees were the largest fee category and increased year over year, while investment management and performance fees declined. Investment and Wealth Management segment figures are net of income attributable to noncontrolling interests: $34M in FY2025 and $13M in FY2024.

Contract balances and costs

FY2025 revenue included $114M recognized from contract liabilities outstanding at Dec. 31, 2024. Amortization expense on capitalized sales incentives was $13M in FY2025, $14M in FY2024, and $16M in FY2023. BNY reported no unsatisfied performance obligations beyond those covered by ASC 606 practical expedients for short-term contracts or revenue recognized at the amount invoiced for services performed.

Net interest income

Interest income on Federal Reserve and other central-bank deposits fell to $3.496B from $4.615B, while income on federal funds sold and resale agreements rose to $12.208B from $10.915B. Lower deposit interest expense included domestic-office deposits at $4.886B versus $5.791B and foreign-office deposits at $2.174B versus $2.856B. These declines were partly offset by higher expense on federal funds purchased and repurchase agreements, which increased to $10.946B from $9.974B.

Income taxes

Income before taxes increased 20.7% in 2025. The income tax provision rose more slowly, while the effective tax rate declined to 20.9%. The lower rate reflected valuation allowance changes; lower tax credits and state and local taxes partly offset a smaller impact from nontaxable or nondeductible items.

Deferred taxes and tax uncertainties

At Dec. 31, 2025, the net deferred tax liability was $1.851B, up from $1.654B a year earlier. Depreciation and amortization remained the largest component, though its related liability declined. Securities valuation moved from a net deferred tax asset to a liability.

BNY recorded a $127M valuation allowance against $114M of U.S. foreign tax credit carryforwards, which begin expiring in 2029, and a $13M unrealized capital loss; it expects these benefits are more likely than not to be unrealizable. The company expects to realize its remaining deferred tax assets based on historical results and profit forecasts. Approximately $1.6B of foreign-subsidiary earnings is permanently reinvested abroad, with no provision recorded for local distribution taxes.

Gross unrecognized tax positions were $112M at year-end 2025, compared with $109M in 2024. If the full 2025 balance were determined to be unnecessary, it would affect future effective tax rates. Accrued tax-related interest was $36M; the tax benefit related to interest was $5M in 2025, versus $2M of tax expense in 2024. Examinations remain open for specified federal, New York, and U.K. periods.

Long-term debt

Long-term debt was $31.873B at Dec. 31, 2025, up from $30.854B. Scheduled maturities are concentrated in 2028.

Variable interest entities

BNY’s interests in VIEs include customer-funded retail, institutional and alternative investment funds. BNY earns management fees and, in some cases, performance fees, and may provide start-up capital. It also invests in qualified affordable-housing and renewable-energy projects, primarily to realize tax credits; these project VIEs are not consolidated.

Consolidated investment-management funds

At Dec. 31, $ millions

Net assets of consolidated VIEs are restricted to settling the VIEs’ liabilities and investor ownership liquidation requests, and include BNY’s seed capital. The table reports no VMEs at Dec. 31, 2025; at Dec. 31, 2024, VMEs had $43 million of assets, less than $1 million of liabilities and $7 million of nonredeemable noncontrolling interests.

Non-consolidated VIEs

For VIEs where BNY is not the primary beneficiary, reported assets—primarily related to tax-credit investments—and liabilities were:

Maximum loss exposure is limited to BNY’s investments and unfunded commitments. BNY reported no financial or other support to VIEs beyond contractual requirements. Creditors of consolidated VIEs have no recourse to BNY’s general credit.

Shareholder returns and equity

At Dec. 31, 2025, BNY had 688.236337 million common shares outstanding. The quarterly common dividend increased 13%, from $0.47 to $0.53 per share, beginning in Q3 2025. During FY2025, BNY repurchased 36.8 million shares for $3.5 billion, at an average price of $96.12 per share. Repurchases are supported by a $5.0 billion authorization from 2023 and an additional $6.0 billion authorized in April 2024. Execution remains subject to market conditions, capital and liquidity needs, alternative uses of capital, and legal and regulatory constraints.

Preferred stock

FY2023 preferred dividends were $235 million. The FY2025 total included $58 million for Series G, including approximately $10 million of deferred fees recognized upon redemption, and a $5 million reduction related to previously deferred Series D redemption fees.

BNY issued Series J, K and L during 2025, with carrying values of $494 million, $494 million and $495 million, respectively, and redeemed all Series G shares in September 2025; Series G had a $990 million carrying value at year-end 2024. Series A, F, H and I remained outstanding, with carrying values of $500 million, $990 million, $576 million and $1.287 billion, respectively, at both year-ends.

All outstanding preferred stock is noncumulative, perpetual and nonconvertible, with a $100,000 liquidation preference per share. Floating-rate resets are scheduled for multiple series, including F, H and I in 2026 and J, K and L in 2030; certain series have call dates beginning between 2026 and 2030. Redemptions require Federal Reserve approval. If required preferred dividends are not paid, obligations on preferred stock can restrict common dividends and share repurchases.

Regulatory capital

BNY and its U.S. bank subsidiaries were “well capitalized” at Dec. 31, 2025 and 2024. Regulatory capital ratios strengthened year over year:

At Dec. 31, 2025, consolidated capital exceeded applicable thresholds by $5.983 billion for CET1, $8.141 billion for Tier 1 capital and $6.069 billion for total capital. The Bank of New York Mellon exceeded thresholds by $13.053 billion, $10.955 billion and $8.476 billion, respectively. Failure to meet capital requirements or maintain “well capitalized” status could lead to regulatory limits or sanctions and adversely affect BNY’s activities and financial condition.

Temporary equity

Redeemable noncontrolling interests related to equity-classified share-based payment arrangements were $87 million at both Dec. 31, 2025 and Dec. 31, 2024.

Other comprehensive income

BNY’s 2025 OCI rose substantially, driven principally by gains on available-for-sale (AFS) securities and foreign-currency translation. Amounts below are after tax unless otherwise noted.

The foreign-currency translation amount includes hedges of net investments in foreign subsidiaries. The 2025 AFS gain comprised a $940M gain arising during the year and a $59M reclassification adjustment. Reclassified AFS gains or losses are recorded as net securities gains or losses in investment and other revenue. Cash-flow hedge OCI included an $18M after-tax unrealized loss, partly offset by $10M of reclassifications to net income. Defined-benefit-plan OCI included a $31M after-tax prior-service cost and a $22M after-tax amortization-related benefit.

Accumulated other comprehensive loss

Accumulated OCI attributable to BNY shareholders improved by $1.621B in 2025. The largest component improvements were in AFS securities and foreign-currency translation.

For comparison, accumulated OCI was a $4.893B loss at Dec. 31, 2023; it improved by $237M during 2024. At Dec. 31, 2025, accumulated OCI also included a $6M after-tax loss related to AFS securities transferred to held-to-maturity securities, versus a $4M loss at Dec. 31, 2024 and a $42M gain at Dec. 31, 2023. These amounts are amortized into earnings over the related securities’ unamortized premium and discount periods.

Stock-based compensation

BNY’s restricted stock unit (RSU) compensation expense increased in 2025. Retirement-eligibility vesting expense also rose, while related income-tax benefits increased.

RSUs and performance stock units (PSUs)

BNY had 16,295,220 non-vested RSUs and PSUs at Dec. 31, 2025, down from 17,460,278 a year earlier. During 2025, it granted 6,473,919 awards at a weighted-average grant-date fair value of $86.80, vested 6,983,868 at $54.28, and forfeited 655,109 at $66.08. Year-end awards had a weighted-average grant-date fair value of $66.95.

BNY had $502 million of unrecognized compensation cost for non-vested RSUs and PSUs, expected to be recognized over a weighted-average 2.2 years. Executive Committee PSUs vest after three years; payout depends 70% on return on tangible common equity (ROTCE) and 30% on total shareholder return (TSR), is capped at 150%, and remains subject to Compensation Committee discretion. Because of that discretion, the ROTCE portion is marked to market in earnings; grant-date fair value for the TSR portion is recognized over the service period, subject to service completion.

BNY had capacity to issue 30,399,477 new awards under its April 2023 long-term incentive plan at year-end 2025, representing potential future share dilution.

Stock options and subsidiary plans

BNY granted 869,263 stock options in 2025, with a $115.93 exercise price and five- or six-year exercise dates; it granted none in 2024 or 2023. All 869,263 options remained outstanding at year-end 2025, compared with none at the end of either prior year. Grant-date fair value was $28.76 per option, or $25 million in total; year-end aggregate intrinsic value was less than $1 million.

The $25 million of unrecognized option compensation cost is expected to be expensed over six years. Option compensation expense in 2025 was less than $1 million, with no related tax benefit; there was no option compensation expense in 2024 or 2023. Options were valued using Black-Scholes assumptions that included 30.23% expected volatility and a six-year expected life.

Subsidiary incentive plans also issue restricted shares that are generally non-voting and do not pay dividends. They typically vest over three to five years and can then be sold back to BNY at a price generally based on the subsidiary’s fair value.

Defined benefit plans

BNY’s defined benefit pension plans cover approximately 5,400 U.S. and 17,500 non-U.S. employees. U.S. plans have been closed to new participants since Dec. 31, 2010, and U.S. qualified and non-qualified pension accruals were frozen June 30, 2015. The largest foreign plan, covering certain UK employees, froze accruals Dec. 31, 2018; most UK employees now earn benefits under defined contribution plans.

At Dec. 31, 2025, all three plan groups were in surplus. Domestic pension assets increased $318M year over year, including a $536M actual return on assets in 2025 versus $179M in 2024. Foreign pension assets rose $91M, including an $85M foreign-exchange adjustment. Obligations increased $30M for domestic pensions, $99M for foreign pensions, and $10M for healthcare.

Year-end discount rates were 5.47% for domestic pensions (5.72% in 2024), 5.50% for foreign pensions (5.15%), and 5.47% for healthcare (5.72%). Domestic pension actuarial losses were $75M in 2025, compared with a $178M actuarial gain in 2024.

The domestic pension credit included a $362M expected-return credit, partly offset by $185M of interest cost and $31M amortization of net actuarial losses. Foreign pensions included a $76M expected-return credit and $41M of interest cost. Expected asset-return assumptions used for 2025 expense were 6.56% for domestic and 5.46% for foreign pensions, down from 6.75% and 5.64%, respectively, in 2024.

At year-end 2025, accumulated pre-tax losses were $1.506B for domestic pensions, $313M for foreign pensions (including $41M of prior-service cost), and $31M for healthcare. Certain plans were underfunded: domestic plans had $98M of projected benefit obligations and no plan assets; foreign plans had $113M of projected obligations and $9M of assets; healthcare plans had $69M of accumulated obligations and no assets. Funded status and benefit costs are sensitive to asset returns, discount rates, foreign exchange, and healthcare-cost trends.

Expected benefit payments for 2026–2035 total $2.726B for domestic pensions, $501M for foreign pensions, and $86M for healthcare. BNY expects to contribute $11M, $6M, and $9M, respectively, to those plans in 2026. At year-end, domestic pension assets were 58% fixed income and 37% equities; foreign pension assets were 73% fixed income and 16% equities. Neither held BNY stock. Funds of funds measured at NAV totaled $220M in domestic and $90M in foreign plan assets.

Defined contribution plans

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

BNY cannot contribute to the ESOP.

Parent Corporation financial information

Amounts in billions, except where stated; fiscal years ended December 31.

Earnings

Parent revenue relies heavily on subsidiary dividends. FY2025 net income increased substantially while revenue rose only 0.9%; the increase included stronger equity in undistributed subsidiary earnings.

Balance sheet

Cash flows

FY2025 investing cash flow included a net $2.927 billion inflow from subsidiary investments and advances ($2.967 billion of inflows and $0.040 billion of outflows). Financing included $3.242 billion of long-term debt issuance and $4.509 billion of repayments, $3.535 billion of treasury stock acquired, $1.483 billion of preferred stock issued, $1.000 billion of preferred stock redeemed, and $1.685 billion of cash dividends paid. Parent cash and due from banks was $0.209 billion at FY2025 year-end, compared with $0.117 billion at FY2024 year-end.

Capital return, subsidiary funding and constraints

BNY’s January 2023 share-repurchase authorization allowed repurchases of up to $5.0 billion and replaced prior plans. In April 2024, the company announced an additional $6.0 billion authorization, on top of any remaining capacity under the 2023 authorization.

Bank subsidiaries declared dividends of $5.3 billion in 2025, $4.3 billion in 2024 and $3.5 billion in 2023. At December 31, 2025, they exceeded minimum capital requirements and buffers; after year-end, U.S. bank subsidiaries could pay the Parent approximately $101 million without a regulatory waiver. Parent non-bank subsidiaries held $4.4 billion of liquid assets at year-end. Bank dividends remain subject to statutory limits, capital requirements and regulatory oversight, and regulators may prohibit payments deemed unsafe or unsound.

Resolution funding and other risks

Under BNY’s single-point-of-entry resolution strategy, a 2017 binding support agreement requires the intermediate holding company (IHC) to provide resources to certain key subsidiaries. The Parent funds the IHC through ongoing transfers of cash and other liquid financial assets, subject to its near-term cash needs. Parent and IHC obligations are secured; the IHC provides the Parent with unsecured subordinated funding notes and a committed line of credit for near-term obligations.

If Parent resolution becomes imminent, the credit line automatically terminates and outstanding amounts become due. The Parent must transfer most remaining assets to the IHC, retaining subsidiary stock and a reserve for bankruptcy expenses. This could leave the Parent unable to meet debt and other payment obligations and lead it to seek bankruptcy protection earlier.

Regulatory limits generally restrict bank extensions of credit to affiliates to 10% of a bank’s regulatory capital for any one affiliate and 20% in aggregate for BNY and its affiliates. Such credit requires collateral of 100%–130% of the amount extended. The Parent also guarantees certain Pershing subsidiary credit lines and other subsidiary obligations; maximum indemnification exposure cannot be estimated, although management considers a material payment unlikely.

Note 19 — Fair-value measurement

Recurring fair-value measurements

Recurring fair-value assets increased to $118.048B at Dec. 31, 2025, from $104.163B a year earlier; the 2025 total included $0.155B measured using NAV, compared with $0.152B in 2024. Before derivative netting, asset fair values were 34% Level 1 and 66% Level 2 in 2025, versus 26% and 74%, respectively, in 2024. Recurring fair-value liabilities increased to $6.752B from $5.287B. Before netting, liabilities were 39% Level 1 and 61% Level 2, versus 17% and 83% in 2024. The recurring fair-value tables reported no Level 3 balances.

Major available-for-sale security balances were:

U.S. Treasury securities shifted from entirely Level 1 in 2024 to $24.755B Level 1 and $0.956B Level 2 in 2025. Credit quality in non-U.S. government securities weakened in mix: 83% of the 2025 balance was rated AAA/AA- and 17% A+/A-, compared with 94% AAA/AA-, 3% A+/A- and 3% BBB+/BBB- in 2024. Non-investment-grade Brazilian non-U.S. government securities were $112M, down from $135M. Foreign covered bonds ($8.068B), non-agency commercial MBS ($2.196B) and non-agency RMBS ($1.515B) were each 100% AAA/AA- in 2025.

Derivative balances reflect substantial offsets from legally enforceable netting and cash collateral:

Nonrecurring fair-value measurements

Nonrecurring fair-value assets were all Level 2 and totaled $461M at Dec. 31, 2025, compared with $439M in 2024.

Loan fair-value reductions, based on collateral values and offset against the allowance for credit losses, were less than $1M in 2025 and $1M in 2024. Other assets include non-readily marketable equity securities carried at cost, subject to upward or downward adjustments, and assets received in satisfaction of debt.

Financial instruments not carried at fair value

For financial instruments not carried at fair value on the balance sheet, estimated fair value was below carrying amount for both total assets and total liabilities.

The largest liability fair-value discount was in interest-bearing deposits. Long-term debt fair value exceeded carrying amount by $0.383B in 2025; in 2024, its fair value was below carrying amount.

Fair Value Option

BNY elected the fair value option for selected assets and liabilities, including consolidated investment management funds and subordinated notes associated with certain equity investments. Changes in the fair value of consolidated fund balances are recognized in income (loss) from consolidated investment management funds, within investment and other revenue. Fund assets and liabilities are included in other assets and other liabilities, respectively.

Consolidated investment management funds

Fund valuations use quoted prices and other observable market inputs, including prices from inactive markets where applicable.

Subordinated notes measured under the fair value option

The notes are included in other assets and classified as Level 2, based on observable market inputs.

Commitments and credit exposures

The stated potential loss on commitments and letters of credit could equal their total notional amount if drawn, before considering collateral, although many are expected to expire undrawn. At year-end 2025, lending-commitment maturities were $27.9B within one year, $21.2B in one to five years, and $343M beyond five years. Investment-grade standby letters of credit represented 78% of the total, up from 67%; non-investment-grade letters declined to 22% from 33%. Standby-letter collateral was $212M, compared with $173M.

BNY generally requires at least 102% collateral against the fair value of securities borrowed and monitors collateral daily. Securities-lending indemnifications were secured by $706B of collateral, compared with $574B a year earlier. The reported indemnification exposure includes $65B of cash collateral invested in indemnified repurchase agreements, versus $59B. Separately, CIBC Mellon client securities for which BNY acts as agent were $74B, secured by $78B of collateral, compared with $60B and $64B, respectively. A collateral shortfall following a borrower default could expose BNY to loss.

At Dec. 31, 2025, financial-institution portfolio exposure was $43.6B ($13.3B loans and $30.3B unfunded commitments), concentrated in securities industry ($18.6B), asset managers ($9.4B), banks ($9.3B), and insurance ($4.5B). Commercial portfolio exposure was $14.6B ($1.7B loans and $12.9B unfunded commitments), principally services and other ($4.8B), manufacturing ($4.7B), and energy and utilities ($4.3B). Securities-lending exposures are primarily to broker-dealers. For sponsored Treasury and agency repo transactions cleared through FICC, BNY guarantees clients’ prompt and full performance and seeks to mitigate exposure through interests in client collateral and transaction rights.

Contingencies and legal matters

BNY recorded no material liabilities for general indemnifications or clearing/settlement-exchange support arrangements at either year-end; it considers material payments under general indemnifications and exchange-insolvency support remote. Legal outcomes are inherently unpredictable and could materially affect results in an individual period. BNY does not expect judgments, settlements, or orders, net of reserves and insurance, to materially affect consolidated financial position or liquidity. For matters where a reasonably possible loss can be estimated, aggregate exposure was up to $700M in excess of related accrued liabilities, if any; the range cannot be estimated for other matters. Accruals are recorded when losses are probable and reasonably estimable.

• Brazilian Postalis matters: On July 30, 2025, Brazil’s TCU found DTVM, Ativos, and former Postalis directors jointly and severally liable for approximately $185M; DTVM and Ativos appealed on September 15, 2025. In a separate arbitration, a panel found DTVM and Ativos partially liable on September 29, 2025, with the amount unspecified; proceedings continued while a jurisdictional appeal was pending. A separate 2020 tribunal decision found DTVM and former directors liable for approximately $50M plus a roughly $2M fine; enforcement was suspended pending DTVM’s challenge. Other judgments included approximately $3M in April 2025, appealed by DTVM and Ativos, and an earlier amount reduced on appeal from approximately $3M to $2M, with further appeals denied in 2024. In another matter, a $20M joint-and-several liability finding against DTVM and Alocação de Patrimônio was reversed in April 2024; Postalis’s appeal of the reversal was denied in October 2024, and Postalis has filed a further appeal. Other Postalis fund-related lawsuits remain pending.
• German cum/ex tax matters: German authorities issued secondary-liability notices totaling approximately $150M, at exchange rates prevailing when issued, related to pre-acquisition activity by third-party funds for which acquired entities acted as depositary and/or fund manager. BNY appealed, is cooperating with information requests, and is pursuing seller indemnities. German courts found the funds’ cum/ex activity unlawful; in proceedings against unrelated individuals, the subsidiary was joined as a secondary party, but the court took no action against it.
• Other litigation and regulatory matters: A trial court denied class certification against BNY in Stanford-related litigation on Aug. 5, 2025; other actions and arbitration claims remain. Mortgage-securitization trustee-duty actions also remain pending. BNY paid a $40M SEC penalty in August 2024 for off-channel communications and recordkeeping, and a $500,000 CFTC penalty in September 2025 for the related matter; it says it is complying with settlement undertakings. BNY continues to cooperate with an SEC inquiry into Pershing LLC’s compliance with Rule 15c3-3 and other requirements, with no resolution or penalty stated.
• Russia-related litigation: A Russian court entered a Sept. 11, 2025 judgment against BNY and co-defendants in a suit seeking $251M over funds allegedly seized by Ukraine from BNY accounts; BNY appealed on Oct. 13, 2025. Separately, a Russian bailiff is seeking to collect from BNY part of a $513M judgment that PJSC Sberbank obtained against its former subsidiary and Ukrainian agencies.

Note 22 — Derivative instruments

Uses, risk management and controls

BNY uses derivatives to manage interest-rate, foreign-exchange, equity-price and credit risks, and to make markets for customers under the Volcker Rule. It manages counterparty exposure through offsetting positions, credit reviews, netting agreements, and collateral—cash or highly liquid securities subject to daily adjustment. No counterparty-default losses were recorded in 2025. Trading risk is monitored independently through position limits, one-day 99%-confidence value-at-risk (VaR), stress tests and sensitivity analyses; BNY cautions that VaR does not capture extraordinary events.

Designated hedges and hedge-accounting effects

At Dec. 31, 2025, interest-rate swaps hedged $44.3B par value of available-for-sale (AFS) securities, with $44.1B notional. Portfolio-layer swaps of $1.4B notional hedged a $2.9B closed portfolio of fixed-rate loans, and $28.7B par value/notional of long-term debt was hedged. Cash-flow swaps hedged $400M of variable-rate loans. BNY also designated $734M notional of forecast foreign-currency transactions as cash-flow hedges and had $11.1B notional of net-investment foreign-exchange hedges.

The $15M pre-tax accumulated-OCI loss on forecast foreign-currency cash-flow hedges was expected to be reclassified into earnings over the next 12 months.

Derivative fair values, netting and trading results

Gross derivative fair values declined year over year. Master netting agreements and collateral reduced the recognized asset and liability positions; the figures below distinguish gross fair values from amounts after netting.

For derivatives not designated as accounting hedges, FX-contract notional was $1.131252T in 2025, versus $919.690B in 2024. Their gross fair-value assets were $6.256B versus $11.537B, and gross fair-value liabilities were $6.381B versus $11.897B. These fair values are before netting. Clearing balances settled to market reflect daily cash settlements.

Rating-contingent counterparty exposure

For OTC derivatives in net-liability positions with rating-contingent features, aggregate fair value before cash collateral fell to $381M at year-end 2025 from $2.163B in 2024; collateral posted was $1.009B versus $1.940B.

Offsetting, collateral and secured financing

Derivative and financial assets

Net recognized derivative and financial assets increased year over year, while the residual after collateral declined. The reduction in derivative assets was driven mainly by foreign-exchange derivatives.

Derivative and financial liabilities

Repurchase-agreement offsets relate to BNY’s FICC activity and net settlement of government-securities transactions through Fedwire. BNY reported no derivatives or financial instruments subject to legally enforceable netting agreements that were not currently netted.

Secured borrowings and maturities

Repurchase agreements were predominantly overnight and continuous: $259.550B in 2025, compared with $232.395B in 2024. The remaining 2025 repurchase-agreement maturities were $1.496B up to 30 days, $4.151B at 30–90 days, and $4.155B over 90 days. Securities lending was entirely overnight and continuous.

BNY identifies liquidity as the primary risk in repo and securities-lending transactions: a decline in pledged collateral’s fair value could require additional collateral and reduce assets available for other liquidity needs. Tri-party collateral agency services also create credit risk; BNY mitigates intraday credit exposure by requiring dealers to fully secure it.

FY2025 business segment results

Amounts are in millions of dollars unless otherwise noted. Segment measures are on management’s reporting basis.

Consolidated results

Revenue increased 7.7%, comprising 5.7% growth in fee and other revenue and 14.7% growth in net interest income. Pre-tax income rose 20.4% as noninterest expense growth was more modest, at 2.8%, and the credit-loss provision shifted from expense to benefit.

Segment results and revenue composition

Growth was led by Securities Services and Market and Wealth Services, whose revenue and pre-tax income both increased. Investment and Wealth Management revenue and pre-tax income declined. Other’s pre-tax loss narrowed; its noninterest expense was $224 in FY2025 versus $254 in FY2024. For context, Other reported $72 of revenue, $956 of noninterest expense, and an $867 pre-tax loss in FY2023; the filing does not explain the markedly higher FY2023 expense.

Credit-loss provision by segment

Businesses and reporting basis

Securities Services includes Asset Servicing and Issuer Services, providing custody, trust, depositary, securities-lending and corporate-trust services, among others; revenue includes investment-services fees, net interest income and foreign exchange. Market and Wealth Services comprises Pershing, Payments and Trade, and Clearance and Collateral Management, covering clearing and custody, payments, trade finance, and collateral services. Payments and Trade was formerly called Treasury Services. Investment and Wealth Management includes Investment Management and Wealth Management, with investment-management, performance and distribution fees and wealth-related net interest income. Other includes corporate treasury and securities-portfolio activities, tax-credit and other investments, insurance, derivatives and trading, and certain business exits.

The segment measures reflect internal management accounting and the performance measures used by the chief operating decision maker, including revenue, pre-tax income and margin. Revenue, expenses and net interest income are assigned using internal allocation methods, including funds-transfer pricing; securities-portfolio valuation gains and losses generally are reported in Other. Consolidated and relevant segment revenue and pre-tax income are net of income attributable to noncontrolling interests in consolidated investment-management funds: $34 in FY2025 versus $13 in FY2024. In FY2025, management revised prior-period Investment Management and Wealth Management line-of-business revenue to reflect the transfer of certain fixed-income investment-management business from Wealth Management to Investment Management; this revision did not affect segment or consolidated revenue.

International operations

International revenue grew 8.2% in 2025, faster than 4.2% in 2024. Pretax income growth slowed to 3.9% from 14.2%; international earnings therefore grew more modestly than domestic earnings.

International results (USD millions)

Regional results

USD millions

Domestic and consolidated comparison

USD millions

Domestic pretax income and net income rose substantially in 2025, compared with the more modest growth in international earnings.

UK concentration

UK-domiciled international operations accounted for approximately $36.2 billion of assets and $2.8 billion of revenue in 2025—8% of consolidated assets and 14% of consolidated revenue. The corresponding amounts were $30.3 billion and $2.7 billion in 2024 (7% and 14%), and $29.1 billion and $2.4 billion in 2023 (7% and 14%).

International results rely on subjective assumptions and internal allocations for interest income, taxes, expenses and credit-loss provisions; allocated expenses include general support and overhead. Long-lived assets are not significant relative to total assets and are primarily located in the U.S.

Cash taxes paid, net of refunds

USD millions

Selected noncash investing and financing items

USD millions; excluded from the consolidated cash flow statement

Independent Auditor’s Report

KPMG issued unqualified opinions on BNY’s consolidated financial statements for 2023–2025 and on the effectiveness of internal control over financial reporting as of December 31, 2025. The financial statements were found to present fairly, in all material respects, BNY’s financial position and results and cash flows in conformity with U.S. GAAP. The report is dated February 25, 2026; KPMG has served as BNY’s auditor since 2007.

KPMG identified three critical audit matters involving significant estimation and judgment:

• Credit-loss allowance: At December 31, 2025, the allowance for loan losses was $245 million, and the allowance for lending-related commitments was $74 million. The audit focus included pooled allowances for commercial and institutional credits and commercial real estate loans. Expected losses rely on probability-of-default and loss-given-default models, estimated facility amounts at default, portfolio risk characteristics, and multiple macroeconomic scenarios and their weightings. Qualitative adjustments address risks not captured by the models. KPMG emphasized the measurement uncertainty and judgment involved in evaluating model methodology and performance, assumptions, economic forecasts, and supporting evidence.

• Litigation and regulatory contingencies: For matters with reasonably estimable potential losses, the aggregate range of reasonably possible losses at year-end was up to $700 million in excess of related accrued liabilities. BNY accrues losses when they are both probable and reasonably estimable; determining outcomes and exposure requires subjective, matter-specific judgments.

• Investment Management goodwill: BNY reported $16.8 billion of total goodwill, including $6.3 billion allocated to the Investment Management reporting unit. Valuation depends on discounted projected cash flows, particularly the discount rate and long-term growth rate, creating uncertainty and potential impairment risk. KPMG assessed these assumptions in relation to historical forecasting performance and independent valuation ranges.

KPMG reported no qualification of its opinions and no internal-control effectiveness issue.

Glossary and key definitions

• AUC/A (assets under custody and/or administration): Client assets held directly or indirectly in custody or administered by BNY. Each asset is counted once, even when BNY provides multiple services. Performance and risk analytics, transfer agency, and asset aggregation have historically been excluded.
• AUM (assets under management): Client assets for which BNY provides discretionary management or non-discretionary advice and earns fees. This includes hedging instruments supporting client liabilities. The assets and associated liabilities are not reflected on BNY’s balance sheet.
• Expense categories: Revenue-related expenses generally vary with client balances, transaction volumes, or revenue. Growth and efficiency investments are primarily recorded in staff, software and equipment, and purchased-services expenses. Merit costs reflect salaries and benefits; efficiency savings may affect any expense category.
• CVA/DVA: Credit valuation adjustment (CVA) and debit valuation adjustment (DVA) are market-value adjustments for counterparty credit risk and BNY’s own credit risk, respectively, on over-the-counter derivatives.
• Regulatory capital and liquidity terminology: CET1, RWA, SCB, SLR, and TLAC concern capital or loss-absorbing capacity; LCR, NSFR, and HQLA concern liquidity and funding. G-SIB refers to a bank designated as systemically important.
• Credit and risk terminology: “Investment grade” means a Moody’s rating of Baa3 or better, or a rating of BBB− or better from S&P, Fitch, or Morningstar DBRS. An equivalent internal rating applies when an instrument is unrated; lower ratings are non-investment grade. Economic capital represents capital needed to absorb potential losses over a one-year horizon while maintaining a target solvency level.
• Other abbreviations: The glossary also includes operational and market terms such as ABS, CLOs, MBS/RMBS, FX, SOFR, NAV, FTE, and DARTs.

Leadership and Board

Effective February 25, 2026, Robin Vince serves as BNY’s Chief Executive Officer and Chairman of the Board. The listed executive officers include CFO Dermot McDonogh; Chief Risk Officer Rajashree Datta; Chief Operating Officer Alejandro Perez; General Counsel J. Kevin McCarthy; Chief Auditor Joseph Pizzuto; and Corporate Controller Kurtis R. Kurimsky. Other executive leaders oversee asset servicing, investments and wealth, markets, payments, clearance and collateral management, technology, product and innovation, and other functions.

The Board includes directors with experience across financial services, energy, technology, consulting, private equity and other industries. The section reports no Board changes.

Five-Year Total Shareholder Return

Assuming a $100 investment on December 31, 2020, with dividends reinvested, BNY’s cumulative total shareholder return reached $315.70 at December 31, 2025, a 215.7% cumulative gain. This exceeded the S&P 500 Financials Index by 112.2 percentage points and the S&P 500 Index by 119.5 percentage points over the five-year period.

The benchmark returns are weighted by market capitalization at the beginning of the measurement period.