Summary
State Street Corporation's (STT) Q3 2022 results show a mixed financial performance, with a notable increase in Net Interest Income (NII) driven by higher interest rates, which partially offset a decline in total fee revenue. Total revenue saw a slight decrease of 1% year-over-year, primarily due to an 8% drop in fee revenue, impacted by lower servicing and management fees, and currency translation effects. Despite these revenue challenges, the company maintained flat total expenses, benefiting from productivity savings that offset business investments and increased operating costs. Diluted EPS decreased by 8% to $1.80, reflecting the lower net income available to common shareholders. The company continues to navigate the complex regulatory environment surrounding its proposed acquisition of BBH Investor Services, with ongoing dialogue and proposed modifications to the transaction, increasing uncertainty regarding its timing and eventual accretion. Financially, State Street maintained solid capital ratios, with its CET1 capital ratio at 13.2%, and returned capital to shareholders through dividends. Investors should closely monitor the progress and potential outcomes of the BBH acquisition and the evolving interest rate environment's impact on fee income and NII.
Financial Highlights
39 data points| Revenue | $2.96B |
| Interest Expense | $441.00M |
| Net Income | $690.00M |
| EPS (Basic) | $1.82 |
| EPS (Diluted) | $1.80 |
| Shares Outstanding (Basic) | 367.79M |
| Shares Outstanding (Diluted) | 372.42M |
Key Highlights
- 1Total revenue decreased 1% year-over-year to $2.96 billion, primarily driven by an 8% decline in fee revenue ($2.30 billion).
- 2Net Interest Income (NII) significantly increased by 36% to $660 million, driven by higher short-term interest rates.
- 3Diluted Earnings Per Share (EPS) decreased by 8% to $1.80, compared to $1.96 in the prior year's quarter.
- 4Assets Under Custody and/or Administration (AUC/A) decreased 18% to $35.69 trillion, and Assets Under Management (AUM) decreased 15% to $3.27 trillion, largely due to lower market levels and currency translation impacts.
- 5Total expenses remained flat year-over-year at $2.11 billion, as productivity savings offset business investments and higher operating costs.
- 6The proposed acquisition of BBH Investor Services faces ongoing regulatory review with proposed modifications, introducing uncertainty regarding consummation and synergy realization.
- 7The company declared common stock dividends of $0.63 per share, an 11% increase from the prior year's $0.57 per share.