v3.26.1
Line of Business Information
 6 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
Line of Business Information Line of Business Information
Our operations are organized into two lines of business, which represent our reportable segments: Investment Servicing and Investment Management, which are defined based on products and services provided. The results of operations for these lines of business are not necessarily comparable with those of other companies, including companies in the financial services industry. For information about our two lines of business, as well as revenues, expenses and capital allocation methodologies associated with them, refer to Note 24 of the notes to consolidated financial statements in our 2025 Form 10-K.
Revenue and expenses are directly charged or allocated to our lines of business through management information systems. Our Chief Operating Decision Maker (CODM) is the Chief Executive Officer. The line of business results are regularly provided to the CODM to evaluate the performance of each line of business and to inform how resources are allocated between those lines of business to best achieve management’s strategic and tactical goals. Capital is allocated based on the relative risks and capital requirements inherent in each business line, along with management judgment. Capital allocations may not be representative of the capital that might be required if these lines of business were separate business entities.
The following table summarizes our line of business results for the periods indicated. The “Other” columns presented in the below tables, represent amounts that are not allocated to our two lines of business.
Three Months Ended June 30,
Investment
Servicing		Investment
Management		OtherTotal
(Dollars in millions)20262025202620252026202520262025
Revenue:
Servicing fees$1,468 $1,304 $— $— $— $— $1,468 $1,304 
Management fees(1)
— — 772 600 — — 772 600 
Foreign exchange trading services(1)
491 390 3 — — 3 494 393 
Securities finance140 119 10 7 — — 150 126 
Software services(1)
166 193 — — — (24)166 169 
Other fee revenue(1)
117 112 21 15 — — 138 127 
Total fee revenue2,382 2,118 806 622 — (21)3,188 2,719 
Net interest income860 726 — 3 — — 860 729 
Total other income— — — — — — — — 
Total revenue3,242 2,844 806 625 — (21)4,048 3,448 
Provision for credit losses— 30 — — — — — 30 
Expenses:
Compensation and employee benefits1,127 1,033 165 147 — 100 1,292 1,280 
Information systems and communications566 481 23 24 — 18 589 523 
Transaction processing services228 221 52 39 — — 280 260 
Other241 260 257 207 — (1)498 466 
Total expenses2,162 1,995 497 417 — 117 2,659 2,529 
Income before income tax expense$1,080 $819 $309 $208 $— $(138)$1,389 $889 
Pre-tax margin33 %29 %38 %33 %34 %26 %
Average assets (in billions)$362.8 $350.4 $4.0 $3.4 $366.8 $353.8 
Six Months Ended June 30,
Investment
Servicing		Investment
Management		OtherTotal
(Dollars in millions)20262025202620252026202520262025
Revenue:
Servicing fees$2,877 $2,579 $— $— $— $— $2,877 $2,579 
Management fees(1)
— — 1,496 1,187 — — 1,496 1,187 
Foreign exchange trading services(1)
923 727 6 — — 3 929 730 
Securities finance250 227 16 13 — — 266 240 
Software services(1)
335 351 — — — (24)335 327 
Other fee revenue(1)
219 213 26 13 — — 245 226 
Total fee revenue4,604 4,097 1,544 1,213 — (21)6,148 5,289 
Net interest income1,692 1,435 3 8 — — 1,695 1,443 
Total other income1 — — — — — 1 — 
Total revenue6,297 5,532 1,547 1,221 — (21)7,844 6,732 
Provision for credit losses16 42 — — — — 16 42 
Expenses:
Compensation and employee benefits2,314 2,135 340 307 79 100 2,733 2,542 
Information systems and communications1,124 958 52 44 50 18 1,226 1,020 
Transaction processing services458 438 105 80 — — 563 518 
Other455 483 492 417 1 (1)948 899 
Total expenses4,351 4,014 989 848 130 117 5,470 4,979 
Income before income tax expense$1,930 $1,476 $558 $373 $(130)$(138)$2,358 $1,711 
Pre-tax margin31 %27 %36 %31 %30 %25 %
Average assets (in billions)$355.4 $342.1 $3.9 $3.4 $359.3 $345.5 
(1) In the first quarter of 2026, revenue related to distribution and marketing activities was reclassified from foreign exchange trading services to management fees. Additionally, lending-related and other fees, previously recognized within software and processing fees, was reclassified to other fee revenue, and the software and processing fees caption has been changed to software services. Prior-period amounts have been reclassified to conform to the current-period presentation. These reclassifications had no impact on total fee revenue, total revenue or net income, on either a consolidated or line of business basis.
The following table provides additional information about the items included in the line of business results “Other” column for the periods indicated.
Three Months Ended June 30,Six Months Ended June 30,
OtherOther
(Dollars in millions)2026202520262025
Foreign exchange trading services(1)
$— $3 $— $3 
Client rescoping (revenue impact)(2)
— (24)— (24)
Repositioning charges(3)
— (100)(89)(100)
Client rescoping (expense impact)(2)
— (18)(41)(18)
Other
— 1 — 1 
Total
$— $(138)$(130)$(138)
(1) Amount consists of a revenue-related recovery associated with the proceeds from a 2018 foreign exchange benchmark litigation resolution, which is reflected in foreign exchange trading services revenue.
(2) Client rescoping of $41 million in the first quarter of 2026 is reflected in information systems and communications. For the six months ended June 30, 2025, the amount related to a client rescoping which decreased income before income taxes by $42 million, of which $24 million is reflected in software services revenue and $18 million is reflected in information systems and communications expenses.
(3) Repositioning charges of $89 million in the first quarter of 2026 includes $79 million of compensation and employee benefits expenses related to workforce rationalization, $1 million of occupancy costs associated with real estate footprint optimization, and $9 million associated with operating model changes reflected in information systems and communications. For the six months ended June 30, 2025, the amount includes $100 million of compensation and benefits expenses related to workforce rationalization consistent with the strategic focus on operating model transformation to drive further operating efficiency and productivity gains over time.