01—Abstract
Summary
Summary of the 10-Q filed August 1, 2024. Cited figures are marked; the original filing is the authoritative source.
State Street Corporation's (STT) Q2 2024 performance shows a modest increase in total revenue driven by higher net interest income and fee revenue.
While total fee revenue saw a 2%a increase year-over-year, this was primarily attributed to growth in management fees and foreign exchange trading services, partially offset by declines in servicing fees and other fee categories. Net interest income rose by 6%, boosted by higher investment securities yields and loan growth. However, net income available to common shareholders decreased by 10% compared to the prior year, impacted by a 3% rise in total expenses and a higher provision for credit losses.
The company returned $407 millionb to shareholders through dividends and share repurchases, and strategically completed the consolidation of its Indian operations joint venture, which is expected to yield future efficiencies. Key financial metrics indicate a slight pressure on profitability, with a decrease in earnings per share and return on equity. The company's Assets Under Custody/Administration (AUC/A) grew by 12% to $44.31 trillion and Assets Under Management (AUM) increased by 15% to $4.37 trillion year-over-year, reflecting positive market levels and client flows.
State Street's capital position remains robust, with CET1 and Tier 1 leverage ratios within or above target ranges, supported by a recent preferred stock issuance. Investors should monitor the impact of ongoing business investments, productivity savings, and potential pricing headwinds on future revenue growth and expense management.
02—Key points
Key Highlights
- Total revenue increased by 3% year-over-year to $3.19 billion, primarily driven by a 6% increase in Net Interest Income (NII) and a 2% increase in Total Fee Revenue.
- Net income available to common shareholders decreased by 10% to $655 million, or $2.15 per diluted share, compared to $726 million, or $2.17 per diluted share, in the prior year's quarter.
- Assets Under Custody and/or Administration (AUC/A) increased by 12% year-over-year to $44.31 trillion, while Assets Under Management (AUM) grew by 15% to $4.37 trillion.
- Total expenses increased by 3% to $2.27 billion, influenced by business investments and revenue-related costs, partially offset by productivity savings.
- The company returned approximately $407 million to shareholders in Q2 2024 through common share repurchases ($200 million) and common stock dividends ($207 million).
- State Street completed the consolidation of its final operations joint venture in India, aiming for future efficiency savings.
- Common Equity Tier 1 (CET1) capital ratio stood at 11.2% as of June 30, 2024, with Tier 1 leverage ratio at 5.3%, both within or above target ranges.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 1, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $3.19B$3.11B | +2.6% |
| Net Income | $711.00M$763.00M | −6.8% |
| EPS (Basic) | $2.18$2.20 | −0.9% |
| EPS (Diluted) | $2.15$2.17 | −0.9% |
| Shares Outstanding (Basic) | 300.56M329.38M | −8.7% |
| Shares Outstanding (Diluted) | 304.76M333.54M | −8.6% |
05—Questions
Frequently Asked Questions
What was State Street's revenue performance in Q2 2024?
State Street reported a total revenue of $3.19 billion for the second quarter of 2024, a 3% increase compared to the same period in 2023. This growth was driven by a 6% increase in Net Interest Income (NII) and a 2% increase in Total Fee Revenue.
How did State Street's profitability change in Q2 2024?
Net income available to common shareholders decreased by 10% to $655 million, or $2.15 per diluted share, in Q2 2024, down from $726 million, or $2.17 per diluted share, in Q2 2023. This decline was primarily due to a 3% increase in total expenses and a higher provision for credit losses.
What is the status of State Street's Assets Under Custody/Administration (AUC/A) and Assets Under Management (AUM)?
State Street's AUC/A grew by 12% year-over-year to $44.31 trillion as of June 30, 2024, and AUM increased by 15% to $4.37 trillion. These increases were driven by higher market levels and positive client flows.
How is State Street managing its capital?
State Street maintained strong capital levels, with its CET1 capital ratio at 11.2% and Tier 1 leverage ratio at 5.3% as of June 30, 2024. These figures are within or above the company's target ranges. The company also returned $407 million to shareholders through dividends and share repurchases in the quarter.
06—Continue