This ranking evaluates how Fortune 500 companies are deploying AI, and how technology leaders value those investments relative to industry peers.

Fortune AIQ 75

The companies on the Global 500 employ 70.2 million people, and their revenue represents more than one-third of the world’s GDP.

Fortune Global 500

With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

America's Most Innovative Companies

AI is a major force shaping this year’s list—but it’s far from the only story.

World's Most Admired Companies

The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

Leaders in all industries rely more than ever on Big Tech—and appreciate the giants that deliver, at scale, without drama.

The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Industries included in the sector are banks, insurance, and real estate companies.

Fortune Sector Leaders: Financials

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 200 companies on this list are transforming industries from the inside out.

The 26th edition of the list shows how much esteem Big Tech giants command among other business leaders.

The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

The 300 companies on this list are transforming industries from the inside out.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-180-Bank of New York Mellon

Formed from the merger of The Bank of New York and the Mellon Financial Corporation in 2007, the investment banking services holding company manages trillions of dollars in assets across 35 countries.

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-159-BNY-Mellon

Founded in 1784, the bank holding company provides financial services and offers investment management and as of Q1 2020 had $1.8 trillion in assets under management.

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 65th running of the list.

Here are the World's Most Admired Companies for 2018 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 64th running of the list.

Here are the World's Most Admired Companies for 2017 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 63rd running of the list.

Here are the World's Most Admired Companies for 2016 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 62nd running of the list.

Business insiders have spoken: Asked which companies they most admire, more than 4,100 executives, directors, and analysts chose these top 50 All-Stars.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Sector

Industry

Current All-Star Rank

Previous All-Star Rank

Industry Rank

Previous Industry Rank

Overall Score

Innovation

People Management

Use of Corporate Assets

Social Responsibility

Quality of Management

Financial Soundness

Long-Term Investment Value

Quality of Products/Services

Global Competitiveness

Strongest Dimension

Years on list

Previous rank

State

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

BNY is the world’s largest custodian bank and securities services company, holding over $55 trillion in assets. It’s also one of the biggest asset managers in the world with roughly $2.1 trillion in funds. BNY serves over 90% of Fortune 500 companies, as well as central banks and sovereign wealth funds, family offices, and other financial institutions. Founded in 1784 by Alexander Hamilton, the Bank of New York merged with Mellon Financial Corp. in 2007 to create the current company.

Q2 2026

Q1 2026

Q4 2025

Q3 2025

Q2 2025

Q1 2025

Q4 2024

Bank of New York (BNY) (BNY): Company Profile, Stock Price, News, Rankings

legacy

Bank of New York (BNY)

bank of new york (bny)

Good morning and welcome to the twenty twenty five First Quarter Earnings Conference Call hosted by BNY. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. Please note that this conference call and webcast will be recorded and will consist of copyrighted material. You may not record or rebroadcast these materials without BNY's consent.

I will now turn the call over to Marius Mertz, BNY Head of Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to our first quarter earnings call. I'm joined by Robin Vince, our President and Chief Executive Officer and Dermot McDonough, our Chief Financial Officer. As always, we will reference our quarterly update presentation, which can be found on the Investor Relations page of our website at bny.com. I'll note that our remarks will contain forward looking statements and non GAAP measures.

Actual results may differ materially from those projected in the forward looking statements. Information about these statements and non GAAP measures is available in the earnings press release, financial supplement and quarterly update presentation, all of which can be found on the Investor Relations page of our website. Forward looking statements made on this call speak only as of today, 04/11/2025, and will not be updated. With that, I will

Thanks, Marius. Good morning, everyone. Thank you for joining us. I'd like to start with a few broader comments before Dermot takes you through the financial results for the quarter.

Reflecting on the operating environment, while there were clear signs of optimism at the beginning of the year, we have now seen a rapid and significant reversal of sentiment driven by uncertainty about trade and fiscal policies, which added to existing tail risks including a variety of geopolitical tensions and conflicts. Last week's tariff announcements were clearly part of a broader strategy and an effort to reset trade relations between The U. S. And the rest of the world. This is an attempt at a very fundamental change.

And while last week's announcements provided an initial baseline, we should expect that negotiations will time and it is likely that a clear final picture won't be reached for a while, a view reemphasized by Wednesday's news on a three month pause and the market volatility we saw again yesterday. The read through of this uncertainty into both capital markets and the real economy creates elevated risks in the near and medium term. In times like this, being positioned conservatively with balance sheet strength and operational resilience allows us to remain focused on serving our clients and continuing to execute on the ongoing transformation of BNY into a more platforms oriented company. Turning to the quarter and referring to Page two of the quarterly update presentation, we delivered a very solid financial performance in the first quarter. Earnings per share of $1.58 were up 26 year over year on a reported basis and up 22% excluding notable items.

Total revenue of $4,800,000,000 was up 6% year over year. Expenses around the company remained well controlled, up 2% year over year. Taken together, we delivered another quarter of meaningful positive operating leverage, three forty six basis points on a reported basis and two sixty one basis points excluding notable items. Our pretax margin improved to 32% and our return on tangible common equity improved to 24%. As I've noted before, BNY plays a central role in global markets powering our clients with platforms across custody, security settlement, collateral payments, trading wealth investments and more in over 100 markets around the world.

Notwithstanding the current environment, we continue to see a meaningful opportunity from our work to better align ourselves as an integrated financial services platforms company. Our transformation strategy includes both a new commercial coverage approach and our strategic platforms operating model, which together are designed to enhance the client experience and enable greater agility. The execution of this strategy is a significant exercise in change management, which requires hard work and takes time, but our teams around the world have embraced the opportunity and we are making progress. This past quarter marked the first anniversary since we started the phased transition into our new operating model and just one year in we have more than half of BNY working in this new way. Already, we are starting to see how this transformation can drive top line growth with greater scalability.

For instance, over the past year, our trade finance team is processing trade loans 60% faster. Our enterprise on boarding team is also working faster while seeing a more than 30% increase in on boarding volume. And our payments team has tripled the number of currencies we offer our bank clients to support consumer activity. Complementing our platform work and building on the momentum with which we entered the year, our new commercial coverage model is proving increasingly effective in enabling more integrated client solutions from across the entire company. The first three months of the year represented our strongest sales quarter on record.

The number of clients who bought from three or more lines of business has increased by 40% over the past two years and we continue to see outsized sales growth with those multi line of business clients. In just one example, a large privately held multinational company where BNY has acted as custodian for the pension plan and corporate cash portfolio where we provide corporate trust and debt capital market services and we provide wealth management to the company's senior executives. We recently expanded our relationship to also include supporting the company's collateral needs and managing short term cash through our liquidity direct platform. As I have said before, effectively cross selling the breadth of our platforms in this way and at scale represents the single most compelling growth opportunity for our company. As an institution with a long history of innovation, we have not forgotten that delivering new solutions is another important way for us to be more for our clients and to drive top line growth.

We recently welcomed Carolyn Weinberg to the company as a member of the Executive Committee. She is now our Chief Product and Innovation Officer. Many people across our organization are focused on innovating instant payments, digital assets, wealth tech, private markets, collateral, liquidity, all examples of domains where we are innovating. The addition of Carolyn in this new role will increase our leadership bandwidth to drive innovative new commercial opportunities and find new ways to leverage our platforms and data for client solutions. While on the topic of innovation, I also want to take a moment to specifically call out the opportunity we see from AI at BNY.

We've been taking a platform based approach to AI capabilities, building and deploying solutions at scale with resilient responsible guardrails throughout. We believe that our AI platform is going to be an important advantage for us as a large language model agnostic design leveraging frontier models from multiple leading providers. To that end, in the first quarter, we announced a multiyear agreement with OpenAI giving BNY access to cutting edge tools and working with OpenAI to advance AI use cases in financial services. Over 80% of our employees have completed the prerequisite training to access Eliza, our AI platform and more than 8,000 of them are already experimenting with personal AI agents honing the skills they need to use AI effectively. To date, we have deployed more than 40 AI solutions into production with a significant additional number at various stages of building and testing.

Collectively, we expect these to drive productivity gains, improved risk management and to provide meaningful leverage to our people in the future. We strongly believe that by empowering our people with AI to do what we do better every day, we will harness great benefits over the coming years. Before I hand the call over to Dermot, I want to close where I began. While the outlook for the operating environment has become more uncertain, we are prepared for a wide range of macroeconomic and market scenarios. Our ongoing work to operate BNY as a more platforms oriented company combined with our highly capitalized liquid and lower credit risk balance sheet positions us to manage dynamically and act as a source of strength as we support our clients in navigating the current environment.

I'd like to thank our people around the world for bringing intensity and excellence to drive us forward as One BNY. And with that, over to you, Don.

Thank you, Robin, and good morning, everyone. I'm starting with our consolidated financial results for the quarter on page three of the presentation. Total revenue of $4,800,000,000 was up 6% year over year and excluding notable items total revenue was up 5%. Fee revenue was up 3%. That included 6% growth in investment services fees in our Security Services and Marketing Wealth Services segments driven by net new business and higher market values.

Investment management and performance fees were down five percent driven by the mix of AUM flows and an adjustment for certain rebates partially offset by higher market values. While not on the page, I will note that firm wide AUCA of $53,100,000,000,000 were up 9% year over year, reflecting client inflows, higher market values and net new business. And assets under management of $2,000,000,000,000 were flat year over year as higher market values were offset by cumulative net outflows. Foreign exchange revenue was up 3% year over year, driven by higher spreads on the back of higher volatility. Investment and other revenue was $230,000,000 which included a $40,000,000 disposal gain, a notable item in the quarter.

Net interest income was up 11% year over year, driven by the reinvestment of maturing investment securities at higher yields, partially offset by changes in deposit mix. Provision for credit losses was $18,000,000 in the quarter, reflecting reserve increases relating to commercial real estate exposure. Expenses of $3,300,000,000 were up 2% year over year, driven by higher investments and employee merit increases, partially offset by efficiency savings. Taken together, we reported earnings per share of $1.58 on both a reported and on an operating basis. Excluding the impact of notable items, earnings per share were up 22% year over year.

Our pretax margin was 32% and our return on tangible common equity was 24% in the quarter. Turning to capital and liquidity on page four. Our Tier one leverage ratio for the quarter was 6.2%. The sequential increase reflects capital generated through earnings, preferred stock issuance and improved accumulated other comprehensive income, partially offset by capital distributed through common stock repurchases and dividends. Our CET1 ratio at the end of the quarter was 11.5%.

The sequential increase reflects the before mentioned increase in capital, partially offset by higher risk weighted assets. Over the course of the first quarter, we returned approximately 1,100,000,000 of capital to our common shareholders representing a 95% total payout ratio year to date. With regards to liquidity, the consolidated liquidity coverage ratio was 116% and the consolidated net stable funding ratio was 132%. Next, net interest income and balance sheet trends on page five. Net interest income of $1,200,000,000 was up 11% year over year and down 3% quarter over quarter.

The sequential decrease reflects changes in balance sheet size and mix, partially offset by the continued reinvestment of maturing investment securities at higher yields. Average interest earning assets decreased by 1% sequentially, including lower cash and reverse repo balances, partially offset by higher investment securities and loan balances. Average deposit balances also decreased by 1% sequentially, reflecting lower non interest bearing balances compared to the seasonally strong fourth quarter. Average interest bearing deposit balances remained flat. Turning to our business segments starting on page six.

Security Services reported total revenue of $2,300,000,000 up 8% year over year. Total Investment Services fees were up 4% year over year. In Asset Servicing, Investment Services fees grew by 5% reflecting higher market values and net new business. And in issuer services, investment services fees were up 2% driven by net new business in Corporate Trust. In this segment, foreign exchange revenue was up 10% year over year driven by higher spreads on the back of higher volatility.

Investment and other revenue of $140,000,000 in the quarter included the $40,000,000 disposal gain that I mentioned earlier. Net interest income for the segment was up 8% year over year. Segment expenses of 1,600,000,000 were up 3% year over year driven by higher investments, revenue related expenses and employee merit increases partially offset by efficiency savings. Security Services reported pretax income of $7.00 $8,000,000 up 20% year over year and a pretax margin of 31. Onto Markets and Wealth Services on page seven.

In our Markets and Wealth Services segment, we reported total revenue of $1,700,000,000 up 11% year over year. Total investment services fees were up 8% year over year. In Pershing, services fees were up four percent driven by higher market values and net new business. Net new assets were $11,000,000,000 in the quarter and we started off the year with a meaningful renewal from Cambridge Investment Research, a long time client and a growing independent firm. In Clearance and Collateral Management, investment services fees were up 10% driven by broad based growth in clearance volumes and collateral balances.

And in Treasury Services, investment services fees were up 14% driven by net new business. Net interest income for the segment overall was up 17% year over year. Segment expenses of $866,000,000 were up 4% year over year driven by higher investments and employee merit increases partially offset by efficiency savings. Taken together, our Marketing and Wealth Services segments reported pretax income of $816,000,000 up 20% year over year and a pretax margin of 48%. Turning to Investment and Wealth Management on page eight.

Our Investment and Wealth Management segment reported total revenue of $779,000,000 down 8% year over year. Investment Management fees were down 4% year over year driven by the mix of AUM flows and the adjustment for certain rebates partially offset by higher market values. Segment expenses of $714,000,000 were down 4% year over year, driven by lower revenue related expenses and efficiency savings, partially offset by higher investments. Investments in wealth management reported pretax income of $63,000,000 down 41% year over year and a pretax margin of 8%. As I described earlier, assets under management of $2,000,000,000,000 were flat year over year.

In the first quarter, we saw $18,000,000,000 of net outflows driven by index cash, equity and multi asset strategies, partially offset by net inflows into fixed income and LDI strategies. Wealth management client assets of $327,000,000,000 increased by 6% year over year, by higher market values and cumulative net inflows. Page nine shows the results of the other segment. I'll just note that in this segment, the sequential improvement in both revenue and expenses reflects the absence of net losses on sales of securities recorded in the fourth quarter as well as lower severance expense in the first quarter. I'll close with a few comments on the financial guidance for 2025 that we provided on our earnings call in January.

While it is clear that the outlook for the operating environment has become more uncertain, our financial guidance and with it our determination to drive positive operating leverage in a wide range of scenarios remains unchanged. That means we continue to expect full year 2025 NII to be up mid single digit percentage points year over year. We continue to expect some fee revenue growth, of course, market dependent. And we continue to expect approximately 1% to 2% year over year growth in expenses excluding notable items. We also continue to expect our effective tax rate for the full year 2025 to be in the 22% to 23% range.

Considering our 20% tax rate in the first quarter, that means approximately 23% to 24 for each of the remaining three quarters of the year. And we continue to expect to return approximately 100% plus or minus of 2025 earnings over the course of the year. I'll repeat what I said in January. We continuously manage the pace of our buybacks considering macroeconomic and interest rate environment, balance sheet growth and many other factors with a conservative bias. To wrap up, BNY posted another set of solid results in the first quarter, which demonstrate our consistent execution and delivery.

On the back of our strong balance sheet, we are focused on supporting our clients in navigating the cross currents of this uncertain operating environment, all the while continuing to drive us unlocking the opportunity embedded in our company. With that operator, can you please open the line for Q and A?

And our first question will come from Ken Usdin with Autonomous Research.

Rob and Dermot. Good morning. Another really good quarter in terms of the NII generation and good deposits. I know you guys have talked about how deposit stability is important to NII generation. I know it's early in the year and we have all this uncertainty.

Obviously, better start than the run rate guide would imply. But just wondering just what do you think about just the world of deposits? Do you see any benefits in an uncertain world in terms of flows like to safety? And just how we should think about some of the moving parts going forward? Thanks.

Thanks for the question. Look, Q1 as it relates to deposits was right in line with our expectations in terms of balance and mix shift. Q4 is seasonally strong quarter for us as it relates to overall balances. So we saw some of that moderate in Q1. Now with the elevated uncertainty and volatility in the markets over the last couple of weeks, we have seen a little pickup in deposits overall, but not in a meaningful way that we would have say so we would have seen two years ago in the regional bank crisis.

So, we haven't yet seen that kind of porch in the storm flight to quality, But people know the strength of our balance sheet and the strength of our liquidity and capital. So we have seen a little bit of a tick up, but not in a way that we saw two years ago.

So we'll just see if that holds up and go from there. Just bigger picture about just the environment we're in. You have a lot of different businesses, and this is the type of environment where we see a lot of activity potential, I guess. And it was notable to see FX a little softer. But I'm just wondering how do you guys see this world in terms of just businesses that either get more active or potentially less active based on how clients act and where you expect to see kind of money flows as you could think about how past cycles would be inference to this one?

Yes, Ken. I'll take that one. So I think it's fair to see the phases of these types of events sort of split into two. So there's one which tends to be a little bit more frenzied activity in the marketplace. That's what we've been seeing over the course of the past ten days or so in terms of activity.

And so that does give rise to higher volumes. And we're seeing that across our platforms for sure. Now, we're not a huge trading firm like some others out there, but we see it in terms of high counts on clearing volumes, in terms of activity on liquidity platforms, collateral activity, all the places where you'd expect it to be where we're really capturing the fact that market volumes are up. And to Dermot's point earlier on about liquidity, the reason why we probably haven't seen a big flight into us at this point is because a lot of the activity has been delevering by people who've been raising cash to pay back lines, not raising cash just to have more dry powder on the sidelines. It hasn't yet been as much a long only liquidation, which tends to raise cash and that cash often ends up on our balance sheet.

So it's sort of a little bit of a phasing thing. And then what can happen and we'll have to see if that does happen, but as things calm down at some point, it causes CEOs and leadership teams to reflect on how do they want to think about the strategic consequences for their business. And that's where our rentable scale and our platforms and the fact that we have all of these broad capabilities built on this sort of rock solid foundation that's what allows us to then capture potential follow on opportunities where people say, you know what, there are things I used to do for myself that I'd now rather someone like BNY does for me using their platforms.

And so that's how I think about the world right now.

And Ken just to clarify, you mentioned softness in FX is up 3% year over year. We're kind of the numbers we present there are the firm numbers. When you kind of go underneath the hood on that and talk specifically about our markets business, that was a solid year over year uptick. Whereas on the other side, our corporate treasury department are doing FX placements and the other side of that is reflected in NII.

So you're seeing a firm wide view there as opposed to a specific markets view and the markets view for us year over year was solid.

And the next question will come from Alex Blostein with Goldman Sachs.

Hey, good morning. Thank you for the question as well. Maybe starting with a bit of a strategic question also. Just kind of thinking about the position of the bank, obviously very strong capital base, lots of liquidity at times of uncertainty and dislocation. There might be some interesting inorganic opportunities that may come up time and again.

How are you thinking about that? Maybe it's too early, but just want to get your sense for appetite for M and A if something compelling comes along and if there are areas of particular interest where inorganic growth might make sense?

Yes. Thanks, Alex. Look, we're carefully looking at the opportunities. That's not a spot moment in time thing. It's just a sort of the rhythm as this management team has been driving through things over the course of the past two point five years.

We think we've got a lot of things under control in terms of running the company better. You can see us driving now on the sales side. You can see us driving the execution platforms. You can see the innovation. And so we're always going to be out there thinking about what could be additive to our platform.

We just think it's the responsible thing to do for shareholders. Now, we're going to what hasn't changed is maintaining great discipline. In acquisition, we need to check all of the boxes of like clear alignment with our priorities, strong cultural fit. And I underline that because that is important to us and attractive financial returns obviously. But you're right, times like this can present opportunities and we'll be thoughtful about it.

And I feel that we've practiced some of this with our Archer acquisition. That wasn't huge. But nonetheless, it was a sort of a small to medium sized thing. It was a capabilities buy. But we're going through all of the training processes internally to understand how to look at and then purchase and then integrate something like that in a first class way.

And then the final thing I'll say is Platform's operating model is quite additive to our capability over time to be able to I think be a better integrator because it creates the roadmap for us internally on how to take things and plug them in better.

Got you. Thanks. And then my follow-up is actually double clicking into your earlier response to Ken's question around deposits. So up a little, not a ton so far in April. Can you comment also on the mix between interest bearing and non interest bearing in April?

And then ultimately, as you sort of think about a more normalized percentage of non interest bearing deposits, you guys are at 17%, I think, now even pre COVID. So kind of before the spike in industry wide liquidity, you guys were running north of 20%. How do you think about that sort of run rate mix going forward in more sort of uncertain environment? And if in fact you enter in a recession, what would that likely look like?

So I guess there were a lot of questions in that follow-up question, Alex. Think about the NII for a second and the reconfirmation of the guide of 5%, which we feel pretty good about, I think it goes back to something that we discussed on previous calls, which is that very, very strong joined up partnership between the CIO, the treasurer and our deposit desk. And a lot of the work that drives our confidence around NII for this year are the actions that we took last summer over after Jackson Hole where we kind of immunized the firm for 2025 NII. So a lot of work on the asset side. In terms of NIBs, as it relates to like as rates have trended higher, you would expect a reasonable amount of cash sorting to go on and people optimize for yield.

We don't lead with deposits. Clients come to us to do other activities in the firm and with that comes deposits which then turn into operational deposits. So in terms of the overall guide of like the $281,000,000 number which we have seen tick up a little bit this quarter and it is a seasonal business. Q4 is our strongest quarter for deposits typically. Then Q1 is a little bit less than that.

Q3 is our seasonal low. So there's nothing that we see kind of changing our view of the overall deposit mix for the balance of the year, which kind of gives us a lot of confidence around the guide that we gave you.

And our next question will come from Mike Mayo with Wells Fargo Securities.

Hey. I guess my first question is no good deed goes unpunished. So I do note your revenues were up 5% year over year and your headcount is down 2%. But so you raised the bar for yourself, but did note that the non comp expenses are growing mid single digits year over year. I'm wondering how much that might continue.

And also the impact on revenues from the decline of non interest bearing deposits, is that seasonal or is that something that's just a result of the macro environment? Thanks.

So look, Mike, I think our ability to deliver positive operating leverage through the cycle is the North Star. And I think this is the fifth quarter that we've delivered consistent positive operating leverage. And hopefully you are beginning to give us credit for being a financially disciplined well run company where we have got our expenses under control over the last couple of years, while at the same time making investments in the strategies that are powering our top line growth and our efficiency growth. And so, you're beginning to see those investments paying off. And I'm pleased that you highlighted the headcount number, which just generally means that we're able to do more with less in a digitally empowered way.

And as Robin mentioned in his prepared remarks, we still haven't really unlocked the power of AI. So when you think about where AI is going to be on our platform, as a financial platform company where you see 20% of the world's investable assets flowing through our pipes, when we kind of get the AI strategy integrated into the strategy of the firm, we see a lot of dividends coming in that.

And then, you didn't answer the non interest bearing deposit question, which might not be answerable, but just any thoughts there?

So look, non interest bearing deposits, think, are roughly in line with where we don't really expect them to go meaningfully higher or meaningfully lower from where they are now, which reinforces our guide like so NII is made up of what we've done on the asset side and what we think the forecast is going to be in terms of the mix and the overall level of the deposits. At the end of the year, we ran about 35 different scenarios. We did the same thing at Q1. We feel we've kind of cut the tails off the risk of what we believe the reasonable outcome of NII is going to be. And to give you a little bit of an indication like up down, if the Fed were to cut rates by 50 basis points tomorrow, it wouldn't really impact how we think about NII for the balance of the year.

That's great. And my second question is for Robin. I saw you're on CNBC and you talked about the hard data is good, but the soft data is bad and they'll converge one way or another. I guess, Mike, it's unanswerable also, but how long can this go on before things tip? Like the hard data goes to soft data, the soft data goes back to hard data.

Do we have one month as a country and economy, one month, three months, six months, twelve months? Kind of what's your sense there? And what is the risk of being an international company and being a services company and potential retaliation there? I don't know how you think or frame that, but I'll take any thoughts you have. Thanks.

Sure. I love that you ask unanswerable questions, but nonetheless, I'll give them both a whirl. Okay. So first of all, yes, this point about and we saw it again today with the confidence taking a little bit of another beating in the survey data that was released this morning. It is.

It's going down and it's not surprising because if you're a CEO, you've got an uncertain environment potentially out over the horizon. It doesn't help you thinking about longer term commitments including building factories, including making commitments to sort of new initiatives or whatever the case may be. And if you're a consumer, the fear of our price is going to go up, what's it going to mean? Obviously, there's also a jobs angle on all of this as well. Could the economy tip into a recession?

Those are all legit questions that a consumer would have and that's going to be a little bit of a dampener of confidence. So, think there are plenty of reasons to think that that will continue to be low. And my point when I talked about this before was that the two things at some point just kind of have to converge. And the longer that it goes on, the greater the probability that the facts converge down to the sentiment as opposed to if for some reason we suddenly had clarity and we suddenly had a sense of confidence being able to come back then it would converge back up to the facts and we'd be in a better space. But I think with a ninety day pause on tariffs and then probably a fairly long tail on full emergence of a clear picture, I think you have to be a little bit pessimistic here about how the economy is going to evolve over the course of the next six to nine months.

I'd love to be wrong on that one, but I think as every day goes by, let's call it this trade has negative carry to be able to hold. So we'll see. On the second question that you asked internationally, look, we are a global firm. 40% of our revenues come from outside of The U. S.

But we're also a firm that provides really critical services to our clients. And so clients always have choices, and we have to earn their business every single day with how we behave platforms operate. But it is this combination of having this reputation of being trusted, having this rock solid underpinning, which as you know creates this port in a storm capability, plus the fact that we do things that are really important. Clearing treasuries for most people is not an optional activity. Having access to a global collateral platform that lets your business operate more effectively, maintaining your access to the rails of the financial system.

Those are very, very core significant things. And so, I'd like to think the combination of the trust, the reputation and then the day to day operation will cause our clients to continue to see value with us. But obviously that's something that we'll have to see how it evolves.

And moving on to Ebrahim Poonawala with Bank of America.

Hey, good morning. Guess maybe Robin, just to that last point, Hiderman and Robin, you mentioned the clearing of treasuries. You have a very deep sort of understanding of the market infrastructure. There's obviously concerns around the treasury market, what's happening, whether the Fed needs to intervene. Just give us a sort of a preview into what you've seen over the last few days?

Are things working as smoothly as you would expect? And what the risk looks like there or the need for the Fed intervention?

Sure. So look, I would separate the treasury market into a couple of different pieces. The rails of the system are working really well. We're seeing high volumes, yes, for sure. But everything is functioning really well and we have a, as you point out, a very good view into that.

There was a little bit of a tail in the three year auction, of course, as was well publicized earlier in the week, but then we had a very solid ten year auction and long bond auction as well. But what has evolved and this is not unique to treasuries in any way, we've seen it in equities as well is that the depth at the top of the order book has reduced. And so bid offer spreads have widened, The amount of risk that can be moved at the top of the book is much smaller. You have to go deeper into the book to be able to move blocks of risk. And that is true in the treasury market as it's been true in equity markets.

And we've seen all the things that you'd There's a little bit of dislocation with ETF NAVs versus the underlies. Those types of things are all indicative of people trying to move blocks of risk and there's a bit of a consequence to it in terms of liquidity. The Fed will have to will make their own decisions about how they think about things. But if you look at history, what history suggests is that they intervene when they see markets that become fundamentally dysfunctional or dislocated where it's not possible to move risk and the markets really aren't functioning properly.

And that's absolutely not what we have seen this week. Markets are working fine. We're just seeing situations where liquidity is reduced and therefore people are having to pay up. And I think that's the distinction that I'd make for you.

That's helpful. And I guess a separate question, maybe not timely given all the macro concerns, but, your Global Head of Digital Assets testified in front of Congress with regards to the stablecoin legislation. That's a huge priority for this administration. Just give us a sense of how we should think about what is stablecoin legislation? BNY has had relationships with Circle I think going back a few years ago.

What all of that means in terms of your ability to play in digital assets? Are there meaningful implications on revenue growth, deposits that we should be thinking about?

We've all I think the short answer is we don't see it as a near term big revenue item on the list, but we've always seen digital assets as a long term play, whether it's the creation of new stuff or new packages of stuff. Look, we're in the business of looking after things in one of our platforms. That's our custody business, 53,000,000,000,000 world number one. And so if there's going be new stuff in the world, we want to be able to look after it. But then more broadly, the tokenization and leveraging the technology to find better ways of being able to move assets through the system more efficiently, less cost, less infrastructure required to do it.

We actually think those will be a net plus net net over time for us. And so our strategy has been pretty simple, which is we've been very engaged with all of the participants in the system. You mentioned Congress and the regulators, but it's true with the clients as well. We provide a lot of our traditional rails to these new players, and that's been a great way to build relationship. You mentioned one particular client that we do exactly that for.

Now, I think it's very positive that Congress is looking at this question because stablecoins are or some form of digital currency on chain is necessary in order to be able to make on chain transactions efficient. Bitcoin is a more volatile asset. And so it doesn't lend itself as well to good DVP behaviors of a settlement system. So we see stablecoins being one way of being able to facilitate that. And so being able to do sort of transitions between the fiat currency world and the chain world seems to be a sensible place for us to play.

It's great to see that legislation proceeding. But then behind it is also a market structure bill. And that would set really the rules of the road, the terms of engagement for how different participants can participate in digital assets. I think the very helpful thing from this administration has been to sort of create more of this level playing field and say it's a new technology. We don't want anybody to be disadvantaged.

We want everybody to be able to participate and let's do what The U. S. So good at which is innovate and define global standards. And so that's where we sit today. But I wouldn't have it as huge revenue item in the 2025 P and L, but that isn't to undermine its promise over time.

And we'll take a question from David Smith with Truist Securities.

Hi, good morning. A couple of questions on NII. First, it looks like NII from repo and fed funds increased again this quarter. Do you see this sustaining? Is there like expectation for a meaningful drop off?

Just help us frame that. And then secondly, your deposit beta was really high around 90% again this quarter. Obviously, it's a very fluid rate backdrop. But based on what you're seeing, when might this start to level off since I think last cycle your beta was around 75% or 80% for the cumulative cycle?

So thanks for the question. Look, on the repo side, part of NII higher than expected and we've invested quite heavily in that over the last couple of years and we feel it's an important business for us as it relates to clients and delivering products to them. But it does it's quite small in the context of our overall NII. It's only about 5%. So, I think the business held in nicely.

It's doing well. The balances are higher and spreads are a little bit tighter. So, is kind of a couple of puts and takes there. But in the context of our overall NII, it's quite small. In terms of the beta question, look, this is a question I guess that's come up on a lot of calls over the last several quarters in that.

We deal with a sophisticated client base and we kind of pass on the rates as we get them. And so our kind of betas have always been quite high like in the low to mid-80s and that's kind of where we see the book. And so the marginal beta is around 100%. And if rates were to go down, we'd see the betas to perform in line with the way on the way up. So that's kind of roughly how we see it.

in terms of how the macro environment is affecting client activity, do you find clients are less willing to move around from one provider to another in a turbulent environment like this? Or custodians with differentiated capabilities become more attractive to a large enough extent that people will still consider moving where they hold funds?

Bank of New York (BNY) (BNY) Q1 2025 Earnings Call Transcript

Company Participants