Summary
State Street Corporation (STT) reported a mixed financial performance for the quarter ended June 30, 2022. Total revenue saw a slight decrease of 3% year-over-year, primarily driven by a 6% decline in fee revenue. This was partially offset by a significant 25% increase in Net Interest Income (NII), reflecting higher market interest rates. Earnings per diluted share decreased by 8% to $1.91. The company's Assets Under Custody/Administration (AUC/A) and Assets Under Management (AUM) both declined by 10% and 11% respectively, largely due to lower market valuations. State Street's capital ratios remained strong, with CET1 at 12.9%, and the company declared a common stock dividend of $0.57 per share, a 10% increase year-over-year. The ongoing proposed acquisition of BBH Investor Services continues to be a key strategic focus, with ongoing discussions with regulators regarding modifications to the transaction structure and terms. Operationally, the company experienced negative operating leverage due to fee revenue declining more than total expenses. Despite the challenging market environment, State Street maintained a very low direct financial exposure to Russia. The company also announced its intention to resume common share repurchases in the fourth quarter of 2022. Investors should note the significant impact of foreign currency translation, which negatively affected both revenue and expenses.
Financial Highlights
38 data points| Revenue | $2.95B |
| Interest Expense | $120.00M |
| Net Income | $747.00M |
| EPS (Basic) | $1.94 |
| EPS (Diluted) | $1.91 |
| Shares Outstanding (Basic) | 367.38M |
| Shares Outstanding (Diluted) | 372.12M |
Key Highlights
- 1Total revenue decreased by 3% to $2,953 million, driven by a 6% drop in total fee revenue, partially offset by a 25% increase in Net Interest Income (NII).
- 2Earnings per diluted share declined by 8% to $1.91 compared to the prior year period.
- 3Assets Under Custody/Administration (AUC/A) decreased by 10% to $38.18 trillion, and Assets Under Management (AUM) decreased by 11% to $3.48 trillion, primarily due to lower market levels.
- 4The company declared a common stock dividend of $0.57 per share, a 10% increase year-over-year, and announced its intention to resume share repurchases in Q4 2022.
- 5Negative operating leverage of 2.5 percentage points was reported for the quarter.
- 6Common Equity Tier 1 (CET1) capital ratio was 12.9%, and Tier 1 leverage ratio was 6.0% as of June 30, 2022.
- 7Acquisition costs of $12 million were recorded related to the proposed acquisition of the BBH Investor Services business.