STATE STREET CORP Quarterly Report for Q2 Ended Jun 30, 2011

Summary

State Street Corporation (STT) reported a strong second quarter of 2011, with total revenue increasing by 8% year-over-year to $2.49 billion. This growth was primarily driven by a significant 12% increase in fee revenue, led by robust performance in servicing fees (up 16%) and management fees (up 24%), reflecting new business wins and improved market valuations. Conversely, net interest revenue declined by 13% due to lower discount accretion related to former conduit securities. The company also demonstrated a commitment to returning capital to shareholders, declaring a quarterly dividend of $0.18 per share, a notable increase from the previous year. Furthermore, State Street repurchased approximately $225 million of its common stock under its authorized repurchase program. Despite a challenging interest rate environment impacting net interest margin, the company's diversified fee-based businesses and strategic acquisitions like BIAM have contributed to overall revenue growth, positioning STT favorably in the market.

Key Highlights

• 1Total revenue increased by 8% to $2.49 billion, driven by a 12% rise in fee revenue.
• 2Servicing fees increased by 16% and management fees by 24%, reflecting new business and improved market valuations.
• 3Net interest revenue decreased by 13%, primarily due to lower discount accretion from conduit securities.
• 4The company declared a quarterly common stock dividend of $0.18 per share, marking the first increase since 2009.
• 5State Street repurchased approximately $225 million of its common stock under its 2011 repurchase program.
• 6Total expenses decreased by 9% year-over-year, largely due to the absence of a significant securities lending charge in the prior year's second quarter.
• 7Assets under custody and administration grew to $22.76 trillion, and assets under management increased to $2.12 trillion.

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