10-K/APeriod: FY2016

STATE STREET CORP Annual Report (Amendment), Year Ended Dec 31, 2016

Filed March 27, 2017For Securities:STTSTT-PG

Summary

State Street Corporation's 2017 10-K filing highlights its position as a leading financial services provider, with a strong focus on institutional investors globally. The company operates through two main segments: Investment Servicing, which provides core custody and related value-added services, and Investment Management, primarily through State Street Global Advisors (SSGA), offering a wide range of asset management strategies. As of December 31, 2016, State Street managed a significant $28.77 trillion in assets under custody and administration (AUCA) and $2.47 trillion in assets under management (AUM). The filing also details the company's robust regulatory environment, particularly in light of the Dodd-Frank Act and Basel III implementation, which impose stringent capital and liquidity requirements. State Street, designated as a Global Systemically Important Bank (G-SIB), is subject to higher capital surcharges and enhanced prudential standards. The company is actively managing its risk exposures, including credit, liquidity, operational, and market risks, through a comprehensive enterprise-wide risk management framework. Financially, in 2016, State Street reported total revenue of $10.2 billion, with fee revenue making up approximately 80% of this total. The company also actively engaged in capital return to shareholders through dividends and share repurchases, demonstrating a commitment to shareholder value while navigating the complex regulatory and economic landscape.

Financial Statements
Beta
Revenue$10.21B
Interest Expense$428.00M
Net Income$2.14B
EPS (Basic)$5.03
EPS (Diluted)$4.97
Shares Outstanding (Basic)391.49M
Shares Outstanding (Diluted)396.09M

Key Highlights

  • 1State Street manages $28.77 trillion in Assets Under Custody and Administration (AUCA) and $2.47 trillion in Assets Under Management (AUM) as of December 31, 2016, serving institutional investors globally.
  • 2The company operates through two primary lines of business: Investment Servicing and Investment Management (SSGA).
  • 3State Street is subject to significant regulatory oversight, including the Dodd-Frank Act and Basel III, and is classified as a Global Systemically Important Bank (G-SIB), necessitating higher capital and liquidity requirements.
  • 4Fee revenue constitutes the majority of State Street's revenue, representing approximately 80% of total revenue in 2016.
  • 5The company actively returned capital to shareholders through dividends and share repurchases in 2016, demonstrating a commitment to shareholder value.
  • 6State Street is focused on managing various risks, including credit, liquidity, operational, market, strategic, and model risk through a comprehensive enterprise risk management framework.
  • 7The company incurred $142 million in restructuring charges related to its 'State Street Beacon' transformation program in 2016, aimed at digitizing the business and lowering expenses.

Frequently Asked Questions

State Street operates through two primary lines of business: Investment Servicing, which provides core custody, accounting, settlement, and other value-added services to institutional investors, and Investment Management, primarily through State Street Global Advisors (SSGA), which offers a broad range of asset management, investment research, and advisory services.

State Street is significantly impacted by the Dodd-Frank Act and Basel III regulations, which impose stringent capital, liquidity, and risk management requirements. As a Global Systemically Important Bank (G-SIB), it also faces additional capital surcharges and heightened prudential standards from regulators like the Federal Reserve.

In 2016, State Street reported total revenue of $10.2 billion, with fee revenue accounting for approximately 80% of this. Net income available to common shareholders was $1.97 billion. The company also managed substantial assets under custody and administration ($28.77 trillion) and assets under management ($2.47 trillion).

State Street focuses on maintaining strong capital adequacy, exceeding regulatory requirements, and aligning with its risk appetite. The company actively returns capital to shareholders through common stock dividends and share repurchase programs, indicating a commitment to shareholder value, while also adhering to regulatory capital planning and stress testing requirements (CCAR).