Bank of New York Mellon (BNY) reported third-quarter 2026 net interest income of $1.423 billion, down 2% from $1.446 billion in the second quarter. Lower deposit balances more than offset the benefit of reinvesting investment securities at higher yields.

Average deposits fell 1% quarter on quarter to $311.1 billion from $314.0 billion, marking a second consecutive quarterly decline of 1%.

The pressure extended into Securities Services, where net interest income fell 2% quarter on quarter to $765 million from $782 million. The segment’s pre-tax operating margin narrowed to 35.8% from 39.3%, alongside higher revenue-related expenses and investments.

Market and Wealth Services recorded growth in both loans and deposits. Average loans increased 3% quarter on quarter to $57.7 billion from $56.3 billion, while average deposits rose 1% to $103.6 billion from $102.6 billion. Those increases contrasted with the declines in Securities Services balances.

At group level, sequential operating leverage was negative at minus 184 bps. Noninterest expense increased 1% to $3.489 billion from $3.439 billion. Diluted earnings were $2.34 a share for the third quarter.

The preliminary common equity Tier 1 ratio fell 10 bps to 10.9% from 11.0% in the second quarter. BNY distributed $436 million in common dividends and repurchased $937 million of shares. Capital returns and a decline in accumulated other comprehensive income more than offset earnings generation, reducing CET1 capital.

Credit costs shifted to a $1 million provision expense from an $8 million benefit in the second quarter. The earlier benefit primarily reflected improvements in commercial real estate exposure, partially offset by changes in macroeconomic and other factors.

Chief Executive Officer Robin Vince described the operating environment as constructive but uneven. Client demand continued to grow, he said, and sales and pipelines remained healthy across products, client segments and regions.

*Source: BNY third-quarter and second-quarter 2026 earnings releases.*