Summary
State Street Corporation (STT) reported a 3% increase in total revenue for the first quarter of 2012 compared to the same period in 2011, reaching $2.42 billion. This growth was primarily driven by an 8% increase in net interest revenue, which benefited from higher investment portfolio securities and improved yields on U.S. floating-rate securities. Fee revenue remained relatively flat, with a slight decline in servicing fees due to weaker non-U.S. markets and a shift in asset mix, partially offset by new business. Expenses rose by 8% to $1.84 billion, largely due to increased compensation and employee benefits, as well as costs associated with the ongoing business operations and IT transformation program. Key developments during the quarter included the Federal Reserve's non-objection to State Street's 2012 capital plan, allowing for a dividend increase to $0.24 per share and the approval of a $1.8 billion common stock repurchase program. The company also recorded restructuring charges related to its transformation program, which is expected to yield significant future expense savings. While overall financial performance showed modest growth, the company continues to navigate a challenging market environment with an emphasis on strategic cost management and capital allocation.
Financial Highlights
36 data points| Revenue | $2.42B |
| Interest Expense | $140.00M |
| Net Income | $427.00M |
| EPS (Basic) | $0.86 |
| EPS (Diluted) | $0.85 |
| Shares Outstanding (Basic) | 484.94M |
| Shares Outstanding (Diluted) | 490.45M |
Key Highlights
- 1Total revenue increased by 3% to $2.42 billion in Q1 2012 compared to Q1 2011.
- 2Net interest revenue grew by 8% to $625 million, driven by increased investment securities and higher yields on U.S. floating-rate securities.
- 3Fee revenue was flat at $1.79 billion, with servicing fees declining 2% and management fees remaining flat.
- 4Total expenses increased by 8% to $1.84 billion, primarily due to higher compensation and employee benefits, and costs related to the IT transformation program.
- 5The company declared a quarterly common stock dividend of $0.24 per share, an increase from $0.18 in the prior year.
- 6A new common stock repurchase program of up to $1.8 billion was authorized.
- 7Restructuring charges of $8 million (net) were recorded, primarily related to the business operations and IT transformation program.