Global Custody Pro - 22 October 2025

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📰 Welcome to the Newsletter

Welcome to Global Custody Pro, read by custody professionals like you. I'm Brennan McDonald, Managing Editor. I write about the global custody industry, having spent over 12 years in financial services, including working at a global custody bank. An AI voice reads the audio version of this newsletter. Reply to this email with feedback or connect with us on LinkedIn.

Table of Contents

• 🌏 Global Custody News

  • State Street Q3 EPS Rises 23%

  • BNY Q3 earnings rise 25%

  • U.S. Bancorp reports record Q3 revenue

• 🚀 Digital Asset News

  • FSB finds uneven crypto regulation progress

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🌏 Global Custody News

State Street Q3 EPS Rises 23%

State Street Corporation reported third quarter 2025 earnings per share of $2.78, representing a 23% increase year over year, according to the company's earnings call. Total revenue increased 9% year over year to approximately $3.5 billion, supported by fee revenue growth of nearly 12% excluding notable items. The firm's assets under custody and administration reached a record $51.7 trillion, whilst State Street Investment Management reported record assets under management of $5.4 trillion.

The third quarter marked the company's seventh consecutive quarter of positive total operating leverage excluding notable items. Fee revenue growth was broad based, with servicing fees up 7%, management fees increasing 16%, and foreign exchange trading services and securities finance revenues collectively up 17% excluding notable items year over year. The company delivered a pre-tax margin of 31% and return on tangible common equity of 21%.

The company announced a strategic partnership and minority investment in Apex Fintech Solutions to expand wealth services offerings, which it stated will deliver a fully digital, globally scalable custody and clearing solution. State Street also announced the forthcoming launch of a digital asset platform to enable tokenisation of assets, funds and cash for institutional investors. The company returned $637 million in capital to shareholders in the third quarter through common share repurchases and dividends, and increased its quarterly per share common stock dividend by 11% to $0.84.

BNY Q3 earnings rise 25%

BNY reported third quarter 2025 earnings per share of $1.88, up 25% year-over-year, with record revenue of $5.1 billion representing 9% growth. Net interest income of $1.2 billion was up 18% year-over-year, driven by continued reinvestment of maturing investment securities at higher yields and balance growth. Investment services fees grew 10%, driven by net new business, higher client activity, and market values, whilst investment management and performance fees declined 2%.

The company reported expenses of $3.2 billion, up 4% year-over-year on both a reported and adjusted basis, with the variance reflecting higher investments, employee merit increases, higher revenue-related expenses, and an unfavorable impact of a weaker US dollar, partially offset by efficiency savings. The company's CET1 ratio was 11.7%, up from 11.5% in the prior quarter. Franklin Templeton expanded its relationship with BNY Mellon to provide asset servicing and foreign exchange capabilities for its US-listed ETF products, whilst TIAA selected the company's WOVE advisory platform as the unified wealth solution across its broker-dealer, investment adviser, and bank custody businesses.

Dermot McDonogh, Chief Financial Officer, said assets under management of $2.1 trillion were flat year-over-year, reflecting higher market values offset by cumulative net outflows. The company maintained its full-year 2025 expense guidance, excluding notable items, of approximately $13.3 billion. Vince said the company has increased the number of clients who purchase three or more services by 40% over the past two years and is focused on organic transformation rather than mergers and acquisitions.

U.S. Bancorp reports record Q3 revenue

U.S. Bancorp is developing stablecoin custody and payment capabilities across multiple business lines, with plans to pilot transactions before year-end, CEO Gunjan Kedia told analysts on the bank's third quarter 2024 earnings call. The Minneapolis-based bank has reintroduced cryptocurrency custody products for safekeeping collateral underlying stablecoins following changes in the supervisory environment, with Kedia describing the capital markets custody business model as "very clear and very favourable".

The bank is pursuing a dual strategy: established custody services for digital assets and emerging stablecoin payment rails where client demand remains subdued. Kedia said the company is working with industry consortiums on systems to onboard and offboard stablecoins into the traditional banking system and preparing to provide stablecoin payment services if market adoption accelerates. The bank is also evaluating stablecoin applications for its Elan subsidiary, which provides white-label credit card processing to approximately 1,200 smaller financial institutions.

U.S. Bancorp's corporate trust business contributed to elevated deposit flows during the quarter, with seasonality in the division supporting ending assets of $695 billion. Kedia said the bank recently announced organisational changes to adapt to the rapidly evolving digital assets sector, emphasising that revenue momentum and proven economics currently favour custody and investment services over payment applications. The company did not disclose specific revenue figures or assets under custody for its digital assets services.

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🚀 Digital Asset News

FSB finds uneven crypto regulation progress

The Financial Stability Board reported on 16 October 2025 that implementation of its global regulatory framework for crypto-assets remains uneven across jurisdictions, with significant gaps threatening financial stability. According to the peer review report, 11 jurisdictions have finalised regulatory frameworks for crypto-asset activities whilst only five have established comprehensive frameworks for global stablecoins. The FSB disclosed that critical gaps include insufficient coverage of high-risk activities such as borrowing, lending and margin trading, alongside inadequate reporting frameworks.

The filing revealed that crypto-asset markets have grown substantially, reaching approximately USD 4 trillion in market value by early August 2025. The FSB noted that stablecoins have grown by almost three-quarters over the past year to just under USD 290 billion, with their issuers becoming significant holders of traditional financial market assets. The report identified variations across jurisdictions in redemption requirements, custody frameworks and reserve collateralisation as posing particular regulatory challenges for multi-jurisdictional stablecoin arrangements.

Looking ahead, the FSB issued eight recommendations urging jurisdictions to prioritise full implementation of the crypto framework given rapid market developments. The filing noted that supervision and enforcement efforts lag behind regulatory development, with many jurisdictions yet to implement necessary oversight tools. The FSB stated that fragmented cross-border cooperation, inconsistent definitions and legal barriers such as privacy laws threaten to impede effective information sharing and coordinated responses to potential systemic risks.

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