Bank of New York Mellon is betting that deeper cross-selling and heavier investment in artificial intelligence will drive its next phase of growth, Chief Financial Officer Dermot McDonogh told an investor conference. McDonogh said only one client currently buys services from all eight of BNY's business lines, while the number of clients using at least three lines has risen more than 60% over the past several years, and new logos accounted for 10% of total sales last year and again this year. Organic growth climbed from roughly flat in 2022 to 4.5% in the first half of the current year, and the company has posted 14 consecutive quarters of sales growth. BNY raised its expense-growth outlook to 6% to 7% from 4%, citing revenue-related costs, Trump Accounts and added spending on data and AI, while still expecting 400 basis points of positive operating leverage for the year. McDonogh said the firm spends about $4 billion annually on engineering and is using its AI platform, Eliza, for capacity creation rather than primarily cutting headcount, and it continues to target a 38% pre-tax margin and 28% return on tangible common equity after exceeding both in the first half, with roughly 75% of revenue entering 2027 expected to be recurring.
The Bank of New York Mellon CorporationBNY cites 14 straight quarters of sales growth, 4.5% organic growth, and 400bps positive operating leverage while investing in AI platform Eliza.
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