What was the primary driver of State Street's revenue growth in Q2 2021?

State Street's revenue growth was primarily driven by a 6% increase in total fee revenue, which rose to $2.51 billion. This was largely due to higher servicing fees (up 10%) and management fees (up 14%), benefiting from elevated equity market levels and continued client inflows, particularly in ETFs.

How did Net Interest Income (NII) perform in the quarter?

Net Interest Income (NII) decreased by 16% to $467 million compared to the second quarter of 2020. This decline was primarily attributed to lower investment portfolio yields and a decrease in average short-end market rates, partially offset by growth in deposits and the investment portfolio size.

What actions did State Street take to return capital to shareholders?

In the second quarter of 2021, State Street returned approximately $606 million to shareholders. This included common stock dividends totaling $179 million ($0.52 per share) and share repurchases amounting to $425 million. Additionally, the company announced a 10% increase in its third-quarter dividend and a new $3.0 billion share repurchase authorization.

What is the outlook for State Street's AUC/A and AUM?

Assets Under Custody and/or Administration (AUC/A) increased by 27% to $42.60 trillion as of June 30, 2021, driven by higher market levels and net new business. Assets Under Management (AUM) grew by 28% to $3.90 trillion, also benefiting from market appreciation and net inflows, particularly in ETFs and cash, although partially offset by institutional net outflows.

STT/STT-PG 10-Q Quarterly Report Q2 FY2021

Summary

State Street Corporation's (STT) second quarter 2021 filing shows a solid performance driven by increased fee revenues, particularly in servicing and management fees, which benefited from higher market valuations and net new business. Total revenue increased by 3%, while diluted Earnings Per Share (EPS) rose by 11% year-over-year to $2.07. The company also demonstrated improved operational leverage, partly due to a gain from the sale of its Wealth Management Services business. Despite a decline in Net Interest Income (NII) due to lower portfolio yields and short-end market rates, the overall financial health remains strong. State Street returned approximately $606 million to shareholders through dividends and share repurchases, signaling confidence in its capital position. The company also announced a 10% increase in its third-quarter dividend and a significant share repurchase authorization, further underscoring its commitment to shareholder returns. While facing ongoing fee pressure and the transition away from LIBOR, State Street's substantial Assets Under Custody/Administration (AUC/A) and Assets Under Management (AUM) provide a stable foundation for future growth.

Financial Highlights

38 data points

Beta

Revenue

$3.03B

Net Income

$763.00M

0.3% Net Margin

EPS (Diluted)

$2.07

Total Assets

$326.53B

Cash & Equivalents

$4.62B

Free Cash Flow

-$7.79B

Financial Statements

Beta

Revenue	$3.03B
Interest Expense	$0
Net Income	$763.00M
EPS (Basic)	$2.11
EPS (Diluted)	$2.07
Shares Outstanding (Basic)	345.89M
Shares Outstanding (Diluted)	351.58M

Key Highlights

1Diluted Earnings Per Share (EPS) increased by 11% to $2.07 compared to the prior year's second quarter.
2Total revenue grew by 3% to $3.03 billion, primarily driven by a 6% increase in total fee revenue.
3Servicing fees increased by 10% and management fees by 14%, reflecting higher market levels and net inflows.
4Return on average common equity improved to 12.6% from 12.1% in the prior year's quarter.
5The company returned approximately $606 million to shareholders via dividends and share repurchases.
6Announced a 10% increase in the third-quarter common stock dividend to $0.57 per share.
7Board authorized a $3.0 billion share repurchase program through the end of 2022.

STATE STREET CORP Quarterly Report for Q2 Ended Jun 30, 2021

Summary

Financial Highlights

Key Highlights

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