State Street Records Total Revenue of $3.11Bn with 5% Yearly Increase for Q2 2023

Boston-headquartered State Street Corporation (State Street) released its financial results for the second quarter of 2023 (Q2 2023), with total revenue recording $3,110 million, reflecting a 5% increase on a YoY basis.

Revenue

• The total revenue of the group for the quarter came in at $3,110 million, increasing by 5% compared to $2,953 million in Q2 2022 and basically unchanged from $3,101 million in Q1 2023.

• Fee revenue totaled $2,419 million, an increase of 2% compared to $2,370 million in Q2 2022 and an increase of 4% compared to $2,335 million in Q1 2023. Comparing to Q2 2022, servicing fees decreased by 2.9% from $1,297 million to $1,259 million; management fees decreased by 5.9% from $490 million to $461 million; forex trading services fees decreased by 8.5% from $331 million to $303 million; securities finance fees increased by 9.3% from $107 million to $117 million; software and processing fees increased by 17.6% from $188 million to $221 million.

• Net interest income (NII) rose by 18% from $584 million to $691 million on a yearly basis, but 10% lower than $766 million in the prior quarter.

Expense

• Total expense totaled $2,212 million, 5% higher than $2,108 million in Q2 2022 but 7% lower than $2,369 million in Q1 2023.

AUC/A and AUM

• Investment Servicing AUC/A as of quarter-end increased 4% from $38.18 trillion to $39.59 trillion on a yearly basis, primarily driven by higher quarter-end equity market levels and client flows.

• Investment Management AUM as of quarter-end increased 9% from $3.48 trillion in Q2 2022 to $3.80 trillion, primarily due to higher quarter-end market levels.

Capital and liquidity

• Standardized common equity tier 1 (CET1) ratio at quarter-end of 11.8% decreased 1.1% points compared to 2Q22 and decreased 0.3% points compared to 1Q23, primarily driven by the continuation of common share repurchases, partially offset by retained earnings.

• Liquidity coverage ratio (LCR) for State Street Corporation was approximately 108% and LCR for State Street Bank and Trust was approximately 120%.

• Capital return: In 2Q23, State Street returned a total of approximately $1.3 billion of capital, consisting of $1.05 billion in common share repurchases and declared common stock dividends of $203 million, or $0.63 per share.

Ron O'Hanley, Chairman and Chief Executive Officer, commented: “Our strong balance sheet and capital generation enabled us to return approximately $1.3 billion to shareholders through common share repurchases and dividends in the second quarter. We are also pleased by the results from this year's supervisory stress test, which once again confirm the resiliency and strength of our franchise. For the third consecutive year, we announced our plan to increase our per share common stock dividend by 10%, 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.”