A late-quarter rally driven by hopes of trade deals and possible rate cuts lifted major U.S. indexes and improved sentiment. Shifting U.S. tariff policies and mounting geopolitical tensions had whipsawed the markets earlier in the quarter.
BNY is revamping its business to offer more products, CEO Robin Vince said in a media call.
"This is really a representation of the transformation that we're making in the company," he said.
BNY's assets under custody and administration rose 13% in the quarter ended June 30 to $55.8 trillion from a year earlier.
The increase reflected higher market values, client inflows and the favorable impact of the weaker U.S. dollar.
Its total revenue climbed 9% and exceeded $5 billion for the first time in a quarter. Fee revenue rose as rebounding equities boosted the value of client portfolios.
Net interest income (NII) -- or the difference between what the bank earns on interest and pays out for deposits -- also rose 17%. Analysts on average had forecast growth of 11.8%, according to estimates compiled by LSEG.
Assets under management rose 3% over the same period.
BNY earned $1.94 per share, beating the average analysts' estimate of $1.76.
The bank's asset servicing business, which handles the safekeeping and settlement of trades, posted a 7% rise in revenue. Meanwhile, its issuer services segment, which supports clients issuing securities, reported a 17% increase.
Total fee revenue rose 7% to $3.64 billion, compared with the year-ago quarter.
Custodian banks play a critical role in global markets by safeguarding trillions of dollars in client assets, handling the settlement of trades, and ensuring a smooth transfer of securities and cash between financial institutions.
'SO MUCH ORGANIC POTENTIAL'
Last month, the Wall Street Journal reported that BNY had approached smaller rival Northern Trust (NTRS.O) about a potential merger. Chicago-based Northern Trust later said it remained fully committed to staying independent.
Dealmaking in the sector is expected to pick up in the second half of the year.
But analysts have said a tie-up between BNY and Northern Trust is unlikely, citing doubts over Northern Trust's interest in selling and the regulatory hurdles in a merger of two globally significant banks. They added that BNY could instead pursue a different target.
"We just have so much of this organic potential to be able to continue to drive this over the medium and long term," Vince said. "That's really what we are focused on."
