Summary
State Street Corporation (STT) reported solid financial results for the second quarter and first half of 2013, demonstrating revenue growth driven by increases in servicing and management fees, along with strong trading services performance. Total revenue increased by 6% year-over-year for the quarter, reflecting a robust market environment and successful new business installations. Net income available to common shareholders saw an 18% increase for the quarter. The company continued to actively manage its capital, repurchasing a significant amount of its common stock and declaring increased dividends. While net interest revenue experienced a decline due to lower global interest rates, the overall financial health remained strong, supported by a growing asset servicing and management base. The company also highlighted its ongoing Business Operations and Information Technology Transformation program, which is expected to yield substantial expense savings. Key areas of focus for investors include State Street's growing fee-based revenue streams, particularly in servicing and management fees, which are benefiting from positive market conditions and new business wins. The increase in trading services revenue, especially from foreign exchange activities, also contributed positively. Despite the pressure on net interest revenue from the low-rate environment, the company's diversified business model and ongoing efficiency initiatives position it well for continued performance. Investors should also note the company's commitment to returning capital to shareholders through share repurchases and dividends.
Financial Highlights
35 data points| Revenue | $2.56B |
| Interest Expense | $104.00M |
| Net Income | $579.00M |
| EPS (Basic) | $1.26 |
| EPS (Diluted) | $1.24 |
| Shares Outstanding (Basic) | 452.18M |
| Shares Outstanding (Diluted) | 461.04M |
Key Highlights
- 1Total revenue increased by 6% to $2.56 billion for Q2 2013 compared to Q2 2012, driven by strong fee revenue growth.
- 2Net income available to common shareholders increased by 18% to $571 million in Q2 2013, with diluted EPS rising to $1.24.
- 3Servicing fees grew 11% and management fees increased by 13% in Q2 2013, reflecting improved market conditions and net new business.
- 4Trading services revenue saw a 16% increase, with foreign exchange trading up 33% due to higher client volumes and currency volatility.
- 5The company repurchased approximately $560 million of its common stock in Q2 2013 under its new $2.1 billion purchase program.
- 6State Street declared a quarterly common stock dividend of $0.26 per share, an increase from $0.24 in the prior year's quarter.
- 7Net interest revenue declined 11% due to lower global interest rates, impacting yields on earning assets.