Summary
State Street Corporation (STT) reported robust financial performance for the second quarter and first six months of 2008, demonstrating significant growth in total revenue and net income compared to the prior year. Total revenue increased by 39% in the quarter and 45% year-to-date, largely driven by a substantial rise in fee revenue, which grew 31% and 36% respectively. This growth was fueled by strong performance across key segments, including servicing fees, trading services, and particularly securities finance, which saw exceptional increases. Net interest revenue also experienced substantial growth, up 71% for the quarter and 81% year-to-date, benefiting from wider spreads and increased customer deposits. Despite a 36% increase in operating expenses primarily due to integration costs from the Investors Financial acquisition and increased staffing, the company achieved positive operating leverage. Diluted earnings per share saw a significant increase, reflecting the strong top-line growth and improved profitability. The company also highlighted substantial new business generated in assets to be serviced, positioning it well for future fee revenue generation.
Financial Highlights
22 data points| Revenue | $2.67B |
| Interest Expense | $480.00M |
| Net Income | $548.00M |
| EPS (Basic) | $1.36 |
| EPS (Diluted) | $1.35 |
| Shares Outstanding (Basic) | 402.48M |
| Shares Outstanding (Diluted) | 406.96M |
Key Highlights
- 1Total revenue surged 39% year-over-year in Q2 2008 to $2.67 billion, with year-to-date revenue up 45% to $5.25 billion.
- 2Net income grew by 50% to $548 million in Q2 2008, and by 59% to $1.08 billion year-to-date.
- 3Fee revenue increased significantly, up 31% in Q2 2008 and 36% year-to-date, driven by strong growth in servicing fees, trading services, and particularly securities finance revenue (up 117% and 152% respectively).
- 4Net interest revenue more than doubled, increasing by 71% in Q2 2008 and 81% year-to-date, reflecting wider interest rate spreads and increased customer deposits.
- 5Diluted earnings per share increased to $1.35 in Q2 2008, up 26% year-over-year, and to $2.70 year-to-date, up 35%.
- 6Assets under custody reached $15.26 trillion, an increase of 17% year-over-year, while assets under management stood at $1.89 trillion.
- 7The company generated approximately $400 billion of new business in assets to be serviced during Q2 2008, indicating strong future revenue potential.