10-QPeriod: Q3 FY2024

STATE STREET CORP Quarterly Report for Q3 Ended Sep 30, 2024

Filed October 31, 2024For Securities:STTSTT-PG

Summary

State Street Corporation (STT) reported a robust third quarter of 2024, with significant year-over-year growth in total revenue and earnings per share. Total revenue increased by 21% driven by strong performance in fee revenue and net interest income. Diluted earnings per share saw an impressive 81% increase, primarily attributed to higher total revenue and a notable item in the prior year period. The company demonstrated improved profitability with a pre-tax margin of 28.4% and a return on average common equity of 12.0%. State Street also returned $674 million to shareholders through dividends and share repurchases. The company's Assets Under Custody/Administration (AUC/A) and Assets Under Management (AUM) both saw substantial increases, reflecting positive market conditions and net new business. The company's financial health remains strong, with stable capital ratios, including a CET1 capital ratio of 11.6%. State Street continued to manage its capital proactively through preferred stock issuances and redemptions, as well as senior note issuances. The provision for credit losses increased to $26 million, primarily due to concerns in certain commercial real estate and leveraged loans, alongside macroeconomic factors. Expenses increased by 6%, driven by business investments and performance-related costs, partially offset by productivity savings.

Financial Highlights

37 data points
Beta

Revenue

$3.26B

Net Income

$730.00M

22.4% Net Margin

EPS (Diluted)

$2.26

Total Assets

$338.48B

Cash & Equivalents

$4.07B

Free Cash Flow

$2.47B

Financial Statements
Beta
Revenue$3.26B
Net Income$730.00M
EPS (Basic)$2.29
EPS (Diluted)$2.26
Shares Outstanding (Basic)297.37M
Shares Outstanding (Diluted)301.85M

Key Highlights

  • 1Total revenue increased by 21% to $3.26 billion in Q3 2024 compared to Q3 2023.
  • 2Diluted earnings per share (EPS) grew by 81% to $2.26 in Q3 2024.
  • 3Pre-tax margin improved significantly to 28.4% in Q3 2024, up from 19.0% in Q3 2023.
  • 4Assets Under Custody/Administration (AUC/A) increased 17% year-over-year to $46.76 trillion.
  • 5Assets Under Management (AUM) increased 29% year-over-year to $4.73 trillion.
  • 6Returned $674 million to shareholders through common share repurchases ($450 million) and common stock dividends ($224 million) in Q3 2024.
  • 7CET1 capital ratio remained stable at 11.6% as of September 30, 2024.

Frequently Asked Questions

State Street's total revenue increased by 21% to $3.26 billion in the third quarter of 2024 compared to the prior year period. This growth was primarily driven by higher fee revenue, which increased by 11%, and a 16% rise in net interest income. Strong performance was noted across various fee streams, including foreign exchange trading services, management fees, and servicing fees.

Profitability saw a substantial improvement in the third quarter of 2024. Diluted earnings per share (EPS) rose by 81% to $2.26, and the pre-tax margin expanded to 28.4% from 19.0% in the same period last year. Return on average common equity also increased significantly to 12.0% from 7.3%.

State Street maintained a strong capital position as of September 30, 2024, with a Common Equity Tier 1 (CET1) capital ratio of 11.6%, which remained flat compared to the end of the previous year. The Tier 1 leverage ratio was also stable at 5.5%. The company expects these ratios to remain within or above their target ranges.

State Street recorded a $26 million provision for credit losses in Q3 2024, a change from zero in the prior year's quarter. This provision was primarily due to an increase in loan loss reserves for certain commercial real estate and leveraged loans, as well as changes in macroeconomic factors. The company's allowance for credit losses increased, with specific allocations towards leveraged loans and commercial real estate loans.