Summary
State Street Corporation (STT) reported solid financial results for the third quarter and the first nine months of 2017. Total revenue saw a notable increase of 9% year-over-year for the quarter, driven by growth in fee revenue (8%) and net interest income (12%). This performance was primarily attributed to higher global equity markets, new asset servicing business, and the favorable impact of a weaker U.S. dollar, which boosted fee revenues. Net interest income benefited from higher U.S. market interest rates and loan portfolio growth. Earnings per diluted share grew by an impressive 29% to $1.66 for the quarter, and Return on Average Common Equity (ROE) improved to 13.0% from 10.6% in the prior year's quarter. The company also demonstrated a commitment to returning capital to shareholders by increasing its common stock dividend by 11% year-over-year and repurchasing approximately $350 million of its common stock. Despite a 2% increase in total expenses, largely due to investments in new business and compensation, State Street maintained a strong pre-tax margin of 28.9%, up from 24.3% in the prior year's quarter, indicating effective cost management alongside growth initiatives.
Financial Highlights
36 data points| Revenue | $2.85B |
| Interest Expense | $158.00M |
| Net Income | $685.00M |
| EPS (Basic) | $1.69 |
| EPS (Diluted) | $1.66 |
| Shares Outstanding (Basic) | 372.76M |
| Shares Outstanding (Diluted) | 378.52M |
Key Highlights
- 1Total revenue increased by 9% to $2.85 billion in Q3 2017 compared to Q3 2016.
- 2Diluted earnings per common share increased by 29% to $1.66 in Q3 2017 compared to Q3 2016.
- 3Return on average common equity improved to 13.0% in Q3 2017 from 10.6% in Q3 2016.
- 4Fee revenue increased by 8% to $2.24 billion in Q3 2017, driven by higher global equity markets and new asset servicing business.
- 5Net interest income grew by 12% to $603 million in Q3 2017, benefiting from higher interest rates and loan portfolio growth.
- 6Total expenses increased by 2% to $2.02 billion in Q3 2017, reflecting investments in new business and compensation, partially offset by cost savings initiatives.
- 7State Street declared a quarterly common stock dividend of $0.42 per share, an 11% increase year-over-year, and repurchased approximately $350 million of common stock.