Summary
State Street Corporation's 2013 10-K filing reveals a robust financial services company with diversified revenue streams from Investment Servicing and Investment Management. The company manages substantial assets under custody and administration ($27.43 trillion) and assets under management ($2.35 trillion), serving a global institutional investor base. Despite a challenging economic environment marked by low interest rates, State Street demonstrated revenue growth, primarily driven by increases in servicing and management fees, reflecting stronger equity markets and net new business wins. The company also navigated significant regulatory changes, particularly related to Basel III capital and liquidity standards, which are expected to impact capital ratios and operations. Key areas of focus for investors include State Street's strong capital position, with all regulatory capital requirements exceeded as of year-end 2013, and its commitment to returning capital to shareholders through dividends and share repurchases, subject to regulatory approvals. The filing also highlights ongoing legal and regulatory matters, particularly concerning foreign exchange trading practices, which have led to accruals for potential settlements and fines. While these matters present risks, management believes they will not have a material adverse effect on the company's consolidated financial condition.
Financial Highlights
38 data points| Revenue | $9.86B |
| Interest Expense | $411.00M |
| Net Income | $2.05B |
| EPS (Basic) | $4.52 |
| EPS (Diluted) | $4.43 |
| Shares Outstanding (Basic) | 446.25M |
| Shares Outstanding (Diluted) | 455.15M |
Key Highlights
- 1State Street reported total revenue of $9.88 billion for 2013, a 2% increase from 2012, driven by strong growth in servicing and management fees.
- 2Assets under custody and administration grew to $27.43 trillion, and assets under management reached $2.35 trillion as of December 31, 2013.
- 3The company's Investment Servicing segment saw a 9% increase in servicing fees, while its Investment Management segment experienced an 11% rise in management fees, primarily due to stronger equity markets and new business.
- 4State Street's regulatory capital ratios, including Tier 1 risk-based capital of 17.3% and total risk-based capital of 19.7% for the parent company, exceeded regulatory minimums.
- 5The company returned capital to shareholders through dividends ($1.04 per share in 2013) and share repurchases ($2.04 billion in 2013).
- 6Legal and regulatory matters, particularly concerning foreign exchange trading services, resulted in $119 million in aggregate accruals for legal loss contingencies and regulatory matters as of December 31, 2013.
- 7The company is actively preparing for the implementation of Basel III capital and liquidity standards, which will alter the calculation of regulatory capital ratios and introduce new requirements.