State Street Posts Total Revenue of $2.691Bn for Q3 2023, Down 9% YoY

Boston-headquartered State Street Corporation (State Street) released its financial results for the third quarter of 2023 (Q3 2023), seeing a yearly decrease of 9% in total revenue during the period.

Revenue

• Total revenue for the quarter reported $2.691 billion, dropping by 13% compared to $3.110 billion in Q2 2023 and dropping by 9% compared to $2.959 billion in Q3 2022.

• Fee revenue contributed the most to the total revenue with $2.361 billion for the period, 2% lower than $2.419 billion in Q2 2023 and 3% higher than $2.299 billion in Q3 2022. Compared to a year ago, serving fees revenue increased by 1.2% from $1.219 billion to $1.234 billion; management fees revenue increased by 1.5% from $472 million to $479 million; forex trading services revenue decreased by 1.9% from $319 million to $313 million; securities finance revenue decreased by 6.4% from $110 million to $103 million; software and proceeding fees revenue increased by 2.2% from $184 million to $188 million.

• Net interest income (NII) was $624 million, down 10% compared to $691 million in the prior quarter and down 5% compared to $660 million in the same period of last year.

• Net income for the three months amounted to $422 million, 45% lower than $763 million in Q2 2023 and 39% lower than $690 million in Q3 2022.

Expenses

• Expenses totaled $2.180 billion for the quarter, down 1% QoQ (Q2 2023: $2.212 billion) and up 3% YoY (Q3 2022: $2.110 billion).

AUC/A and AUM

• Investment Servicing AUC/A as of quarter-end increased by 12% to from $35.688 trillion in Q3 2022 to $40.017 trillion, largely driven by higher quarter-end market levels and net new business.

• Investment Management AUM as of quarter-end increased by 13% from $3.265 trillion in Q3 2022 to $3.687 trillion, mainly reflecting higher quarter-end market levels.

Capital and Liquidity

• Standardized common equity tier 1 (CET1) ratio at quarter-end stood at 11.0%, decreased by 2.2% points compared to 3Q22 and decreased by 0.8% points compared to 2Q23, primarily driven by lower CET1 capital, mainly due to the continuation of common share repurchases, and higher RWA.

• Liquidity coverage ratio (LCR) for the Corporation was approximately 109% and LCR for State Street Bank and Trust was approximately 120%.

• In 3Q23, State Street returned a total of $1.2 billion of capital, consisting of $1 billion of common share repurchases and declared common stock dividends of $213 million (or $0.69 per share).

Ron O'Hanley, Chairman and Chief Executive Officer of State Street, stated: "In the third quarter, we delivered total fee revenue growth year-over-year, supported by Investment Services, including front office solutions, as well as asset management. We executed on our strategy to refocus our sales efforts within our Investment Services franchise, and generated strong servicing fee revenue wins of $91 million in the quarter, including the first Alpha for Private Markets mandate."

O'Hanley added: "We continued to benefit from our strong balance sheet and capital generation, which enabled us to return $1.2 billion to shareholders through common share repurchases and dividends in the third quarter, and we intend to continue to execute on our common share repurchase authorization of up to $4.5 billion during 2023, subject to market conditions and other factors."