State Street Corporation · NYSE:STT
State Street — Q2 2024 Earnings Presentation
21 slides from State Street's earnings presentation, Jul 16, 2024
Slide 1: Financial Highlights
= STATE —= STREET 20 2024 Financial Highlights NYSE: STT July 16, 2024
Slide 2: Financial performance and business momentum
All comparisons are to corresponding prior year period unless otherwise noted • EPS of $2.15, as compared to $2.17 in 2Q23 • Total revenue of $3.2B, up 3% – Fee revenue up 2%, primarily reflecting higher Management fees and FX trading services revenue, partially offset by lower Financial Servicing f
Slide 3: Financial results and notable items
Financial results Notable items Quarters %∆ QuartersA ($M, except EPS data) (GAAP; $M, except EPS data, or where otherwise noted) 2Q23 1Q24 2Q24 1Q24 2Q23 2Q23 1Q24 2Q24 Revenue: FDIC special assessment - ($130) - Back office servicing fees $1,164 $1,136 $1,146 1% (2)% Middle office services 95 92 9
Slide 4: AUC/A, market indices and AUM
7 Market indices 2 AUC/A ($T, as of period-end) 2Q24 vs (% change) 1Q24 2Q23 +12% Equity & Bond Indices: +1% S&P 500 EOP 4% 23% • Up 12% YoY largely driven by higher Daily Avg 5 25 quarter-end market levels, client flows MSCI EAFE EOP (1) 9 $43.9 $44.3 and net new business Daily Avg 3 10 $39.6 EOP 4
Slide 5: Servicing fees 2Q24 performance
Servicing fees ($M) 2Q24 performance Servicing fees of $1,239M down (2)% YoY and up 1% QoQA -2% • Down (2)% YoY as higher average equity market levels and net new +1% business, excluding a previously disclosed client transition, were more than offset by pricing headwinds, a previously disclosed clie
Slide 6: Management fees 2Q24 performance
Management fees ($M) 2Q24 performance Management fees of $511M up 11% YoY and flat QoQA +11% • Up 11% YoY primarily due to higher average market levels and net Flat inflows from prior periods, partially offset by the impacts of a strategic ETF repricing initiative $510 $511 $479 $479 • Flat QoQ main
Slide 7: Markets, Software & processing, and Other fees
Markets, Software & processing, and Other fees ($M) 2Q24 performance • FX trading services of $336M $699 $706 YoY % – Up 11% YoY primarily due to higher volumes, partially offset by lower $674 $684 spreads associated with subdued FX volatility $648 – Up 2% QoQ supported by higher Indirect FX revenue
Slide 8: Front office software and data
11 Front office software and data ($M) Future growth driven by Front, Middle and Alpha ($M) 2Q23 1Q24 2Q24 -6% +6% Front office metrics $179 New bookings13 $4 $10 $3 $162 $152 ARR14 281 326 345 52 $144 On-premises 12 47 $130 18 15 Uninstalled revenue backlog15 88 102 99 14 29 33 31 Professional 27 M
Slide 9: NII and NIM; average balance sheet highlights
17 NII and NIM ($M) A Average balance sheet highlights ($B) 2Q23 3Q23 4Q23 1Q24 2Q24 +6% Total assets $275 $268 $279 $299 $306 +3% Cash18 73 66 75 95 91 $716 $735 $691 $678 $624 Investment portfolio 108 105 103 101 105 HTM % (EOP) 60% 60% 56% 52% 47% Duration (EOP) 19 2.7 2.7 2.7 2.7 2.5 Loans 34 35
Slide 10: Expenses 2Q24 performance
Expenses 2Q24 performance A (Ex-notable items, non-GAAP, $M) (Ex-notable items, non-GAAP, $M)A +3% Expenses of $2,269M up 3% YoY and down (5)% QoQA • Compensation and employee benefits of $1,099M -5% – Down (2)% YoY mainly due to lower contractor spend associated with $2,383 the JV consolidations in
Slide 11: Capital and liquidity highlights
3 Ratios (%, as of period-end) Capital and liquidity highlights CET1 (Standardized) • 2Q24 standardized CET1 ratio at quarter-end of 11.2% increased 0.1%pts QoQ primarily driven by capital generated from earnings, 11.8% 11.6% STT Target partially offset by continued capital return 11.0% 11.1% 11.2%
Slide 12: Appendix
—_ STATE = STREET.
Slide 13: Appendix contents
2Q24 line of business performance 14 Reconciliation of notable items 15 Reconciliation of constant currency impacts 16 Endnotes & other information 17 Forward-looking statements 19 Non-GAAP measures 20 Definitions 21 13
Slide 14: 2Q24 line of business performance
Investment Servicing Investment Management State StreetA Total revenue YoY % ∆ Total revenueB YoY % ∆ Total revenue YoY % ∆ $2,607M $2,624M +1% $3,110M $3,191M +3% Fee $567M +13% Fee 1,920 1,894 1,894 -1% 2,456 +2% revenue $503M revenue 2,419 NII 687 730 +6% 735 +6% NII 691 2Q23 2Q24 2Q23 2Q24 2Q23
Slide 15: Reconciliation of notable items
Quarterly reconciliation % Change Year-to-Date % Change 2Q24 2Q24 YTD 2024 vs. vs. vs. (Dollars in millions, unless noted otherwise) 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 2Q23 1Q24 2023 2024 YTD 2023 Total fee revenue, GAAP-basis $ 2,335 $ 2,419 $ 2,361 $ 2,365 $ 2,422 $ 2,456 1.5% 1.4% $ 4,754 $ 4,878 2.6%
Slide 16: Reconciliation of constant currency FX impacts
Currency Translation Excluding Currency % Change Constant Reconciliation of Constant Currency FX Impacts Reported Impact Impact Currency 2Q24 2Q24 2Q24 2Q24 2Q24 2Q24 vs. vs. vs. vs. vs. vs. (Dollars in millions) 2Q23 1Q24 2Q24 2Q23 1Q24 2Q23 1Q24 2Q23 1Q24 Non-GAAP basis Total revenue, excluding no
Slide 17: Endnotes and other information
This presentation (and the conference call accompanying it) includes certain highlights of, and also material supplemental to, State Street Corporation’s news release announcing its second quarter 2024 financial results. That news release contains a more detailed discussion of many of the matters de
Slide 18: Endnotes (continued)
8. Data presented for indicative purposes. Morningstar data includes long-term mutual funds, ETFs and Money Market funds. Mutual fund data represents estimates of net new cash flow, which is new sales minus redemptions combined with net exchanges, while ETF data represents net issuance, which is gro
Slide 19: Forward-looking statements
This Presentation contains forward-looking statements within the meaning of United States securities laws, including statements about our goals and expectations regarding our strategy, growth and sales prospects, capital management, business, financial and capital condition, results of operations, t
Slide 20: Non-GAAP measures
In addition to presenting State Street's financial results in conformity with U.S. generally accepted accounting principles, or GAAP, management also presents certain financial information on a basis that excludes or adjusts one or more items from GAAP. This latter basis is a non-GAAP presentation.
Slide 21: Definitions
ACWI All Country World Index AOCI Accumulated other comprehensive income ARR Annual recurring revenue AUC/A Assets under custody and/or administration AUM Assets under management Bloomberg Global Aggregate Bloomberg Global Aggregate represents Bloomberg Global Aggregate Bond Index CCAR Comprehensive