How strong were State Street's first-quarter 2026 results compared with a year ago?

Results were strong. GAAP EPS rose 22% to $2.49, and EPS excluding notable items rose 39% to $2.84. Total revenue increased 16% to $3.8 billion, and net income increased 19% to $764 million. The year-over-year comparison benefits from a relatively weak 1Q25 base, which had a pre-tax margin of 25.0%.

What were the notable items this quarter, and why do they matter?

Notable items reduced pre-tax income by $130 million, or $0.35 per share after tax. They include $89 million of repositioning charges, mainly workforce rationalization, and $41 million of client rescoping charges in information systems. Investors should watch these to judge whether restructuring costs are recurring and whether management's ex-notable metrics are a fair measure of underlying performance.

Is the decline in capital ratios a concern?

The standardized CET1 ratio fell to 10.6% from 11.6% in 4Q25, mainly because risk-weighted assets rose and capital returns exceeded earnings generation. Management attributed the decline partly to normalization of RWA from unusually low levels in the prior quarter. The ratio remains above the minimum requirement, but it is lower than in prior periods, so investors should monitor it against the company's target range and the pace of future buybacks.

What drove the strength in fee revenue and net interest income?

Fee revenue was driven by FX trading services (up 29%, on higher volumes and spreads amid currency volatility), management fees (up 23%, on higher market levels and net inflows), and servicing fees (up 11%, on market levels, currency translation and organic growth). Net interest income rose 17%, reflecting a 16 bps increase in net interest margin from funding mix improvements and investment portfolio repricing. FX and market-driven revenue can be volatile, so the sustainability of these gains is a key question.

What are the main risks and watch items for investors going forward?

Key watch items include expense growth, particularly information systems spending, which rose 18% excluding notable items; the durability of volatility-driven FX revenue; market sensitivity of AUM and fee revenue; and the trajectory of capital ratios given high payout levels. Management noted the macro and geopolitical environment is uncertain, and the filing's forward-looking statements highlight risks such as competition, pricing pressure, credit exposure and regulatory changes.

STT/STT-PG 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed April 17, 2026. Cited figures are marked; the original filing is the authoritative source.

State Street (STT) reported first-quarter 2026 GAAP EPS of $2.49^a, up 22% year over year, and $2.84 excluding notable items, which is up 39%.

Total revenue rose 16% to $3.8 billion^b, driven by fee revenue up 15% to a record $2.96 billion and net interest income up 17% to a record $835 million. Operating leverage was 616 basis points excluding notable items, and the pre-tax margin excluding notable items expanded to 29.0%, up 4.0 points. GAAP expenses rose 15%, but that figure includes $130 million of pre-tax notable items (repositioning charges and a client rescoping charge).

Excluding those items, expenses rose 9%^c. Note that the year-over-year EPS comparison is flattered by the weak 1Q25 base, and sequentially, ex-notable EPS fell about 4%. Growth was broad-based.

Servicing fees rose 11%, management fees 23%, and FX trading services 29%, with FX volumes and volatility-driven spreads contributing. Assets under custody/administration reached a record $54.5 trillion^d, and assets under management were $5.6 trillion, though AUM dipped 0.8% sequentially on market depreciation despite $49 billion of net inflows. Capital return was $633 million, equal to a 90% payout ratio.

Capital ratios are a watch item: the standardized CET1 ratio fell to 10.6% from 11.6% in 4Q25, driven by higher risk-weighted assets, and the tier 1 leverage ratio is 5.4%. The main investor debates going forward are expense discipline, since information systems costs rose 18% ex-notables, the sustainability of elevated FX and market-driven fee revenue, the level of wholesale-to-deposit funding mix benefits in NII, and whether capital returns can continue to exceed the pace of capital generation given the lower CET1 ratio. Management described the macro and geopolitical outlook as uncertain, but it remains confident in continued growth.

02—Key points

Key Highlights

GAAP diluted EPS of $2.49 (up 22% YoY); $2.84 excluding notable items (up 39% YoY, but down 4% QoQ from $2.97).
Total revenue of $3.80 billion, up 16% YoY, with record fee revenue of $2.96 billion (up 15%) and record net interest income of $835 million (up 17%).
Pre-tax margin excluding notable items of 29.0% (up 4.0 points YoY), with ex-notable operating leverage of 616 bps; GAAP pre-tax margin of 25.5%.
Ex-notable expenses rose 9% YoY, though information systems and communications rose 18% ex-notables; $130M of pre-tax notable items were recorded (repositioning and client rescoping).
Record AUC/A of $54.5 trillion (up 17% YoY) and AUM of $5.6 trillion (up 20% YoY); AUM fell 0.8% QoQ on market depreciation despite $49 billion of net inflows.
Standardized CET1 ratio declined to 10.6% from 11.6% in 4Q25 on higher RWA, while $633 million was returned to shareholders (90% payout ratio).
Software services ARR of $418 million, up about 12% YoY, and net interest margin of 1.16%, up 16 bps YoY.

03—Questions

Frequently Asked Questions

How strong were State Street's first-quarter 2026 results compared with a year ago?
Results were strong. GAAP EPS rose 22% to $2.49, and EPS excluding notable items rose 39% to $2.84. Total revenue increased 16% to $3.8 billion, and net income increased 19% to $764 million. The year-over-year comparison benefits from a relatively weak 1Q25 base, which had a pre-tax margin of 25.0%.
What were the notable items this quarter, and why do they matter?
Notable items reduced pre-tax income by $130 million, or $0.35 per share after tax. They include $89 million of repositioning charges, mainly workforce rationalization, and $41 million of client rescoping charges in information systems. Investors should watch these to judge whether restructuring costs are recurring and whether management's ex-notable metrics are a fair measure of underlying performance.
Is the decline in capital ratios a concern?
The standardized CET1 ratio fell to 10.6% from 11.6% in 4Q25, mainly because risk-weighted assets rose and capital returns exceeded earnings generation. Management attributed the decline partly to normalization of RWA from unusually low levels in the prior quarter. The ratio remains above the minimum requirement, but it is lower than in prior periods, so investors should monitor it against the company's target range and the pace of future buybacks.
What drove the strength in fee revenue and net interest income?
Fee revenue was driven by FX trading services (up 29%, on higher volumes and spreads amid currency volatility), management fees (up 23%, on higher market levels and net inflows), and servicing fees (up 11%, on market levels, currency translation and organic growth). Net interest income rose 17%, reflecting a 16 bps increase in net interest margin from funding mix improvements and investment portfolio repricing. FX and market-driven revenue can be volatile, so the sustainability of these gains is a key question.
What are the main risks and watch items for investors going forward?
Key watch items include expense growth, particularly information systems spending, which rose 18% excluding notable items; the durability of volatility-driven FX revenue; market sensitivity of AUM and fee revenue; and the trajectory of capital ratios given high payout levels. Management noted the macro and geopolitical environment is uncertain, and the filing's forward-looking statements highlight risks such as competition, pricing pressure, credit exposure and regulatory changes.

04—Continue

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