State Street Corporation · NYSE:STT
State Street — Q3 2023 Earnings Presentation
21 slides from State Street's earnings presentation, Oct 18, 2023
Slide 1: 3Q 2023 Financial Highlights
= STATE —= STREET 3Q 2023 Financial Highlights NYSE: STT
Slide 2: Presentation notice and forward-looking statements
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 third quarter 2023 financial results. That news release contains a more detailed discussion of many of the matters des
Slide 3: Financial Performance and Business Highlights
All comparisons are to corresponding prior year period unless otherwise noted • EPS of $1.25, down (31)%; $1.93 ex-notable items, up 6%A • Total revenue of $2.7B, down (9)%; $3.0B, up 1%, ex-notable items.A Fee revenue up 3% reflecting higher Servicing fees, Financial Management fees and Other fee r
Slide 4: Financial results and notable items
Financial results Notable items Quarters %∆ 3Q22 %∆ QuartersA (GAAP; $M, except EPS data, or where ($M, except EPS data) ex-currency otherwise noted) 3Q22 2Q23 3Q23 2Q23 3Q22 3Q22 2Q23 3Q23 translation A Revenue: Investment portfolio repositioningB - - ($294) Back office servicing fees $1,126 $1,164
Slide 5: AUC/A, AUM, market indices and industry flows
6 Market indices 1 AUC/A ($T, as of period-end) 3Q23 vs +12% (% change) 2Q23 3Q22 +1% • Up 12% YoY largely driven by higher EOP (4)% 20% S&P 500 quarter-end market levels and net new Daily Avg 6 12 $39.6 $40.0 business EOP (5) 22 $35.7 MSCI EAFE Daily Avg (0) 14 EOP (4) 9 MSCI EM • Up 1% QoQ primari
Slide 6: Servicing fees and 3Q23 performance
Servicing fees ($M) 3Q23 performance Total $2,959 $3,155 $3,101 $3,110 YoY -9% $2,691 QoQ -13% Servicing fees of $1,234M up 1% YoY and down (2)% QoQ revenue • Up 1% YoY primarily from higher average equity markets, net new business and the impact of currency translation, partially offset by +1% lowe
Slide 7: Management fees and 3Q23 performance
Management fees ($M) 3Q23 performance Total $2,959 $3,155 $3,101 $3,110 YoY -9% $2,691 QoQ -13% Management fees of $479M up 1% YoY and 4% QoQ revenue • Up 1% YoY primarily due to higher average equity market levels, partially offset by a previously described shift of certain management A fees into N
Slide 8: Markets, Software & processing, and Other fees
Markets, Software & processing, and Other fees (Ex-notable items, non-GAAP, $M)A 3Q23 performance Total YoY -9% • FX trading services of $313M $2,959 $3,155 $3,101 $3,110 $2,691 QoQ -13% revenue – Down (2)% YoY mainly due to lower Direct FX spreads and muted market volatility, partially offset by hi
Slide 9: Front office software and data
Front office software and data ($M) A Future growth driven by Front, Middle and Alpha Total YoY -9% ($M) 3Q22 2Q23 3Q23 $2,959 $3,155 $3,101 $3,110 $2,691 QoQ -13% revenue Front office metrics +2% -20% New bookings12 $14 $4 $10 $159 $162 ARR3 267 281 299 $127 47 $130 Uninstalled revenue backlog13 90
Slide 10: NII and NIM, average balance sheet highlights
NII and NIM ($M)15 Average balance sheet highlights ($B)A Total YoY -9% 3Q22 4Q22 1Q23 2Q23 3Q23 $2,959 $3,155 $3,101 $3,110 $2,691 QoQ -13% revenue Total assets $275 $284 $277 $275 $268 -5% CashB 72 87 81 73 66 -10% Investment portfolio 109 106 107 108 105 $791 $766 $660 $691 $624 HTM % (EOP) 61% 6
Slide 11: Expenses 3Q23 performance
Expenses 3Q23 performance A (Ex-notable items, non-GAAP, $M) (Ex-notable items, non-GAAP, $M)A +4% Expenses of $2,180M up 4% YoY and down (1)% QoQ • Compensation and employee benefits of $1,082M -1% – Up 4% YoY mainly due to higher salaries, headcount and the impact of $2,212 $2,180 currency transla
Slide 12: Capital and liquidity highlights
Ratios (%, as of period-end) 5 Capital and liquidity highlights CET1 (Standardized) • 3Q23 standardized CET1 ratio at quarter-end of 11.0% decreased (0.8)%pts QoQ primarily driven by the continuation of common share 13.2% 13.6% 12.1% 11.8% repurchases and higher RWA 11.0% 10-11% STT Target Range • 3
Slide 13: Appendix
—_ STATE = STREET.
Slide 14: Appendix contents
3Q23 line of business performance 15 Reconciliation of notable items 16 Reconciliation of constant currency impacts 17 Endnotes 18 Forward-looking statements 19 Non-GAAP measures 20 Definitions 21 14
Slide 15: 3Q23 line of business performance
Investment Servicing Investment Management State StreetA Total revenue YoY % ∆ Total revenueB YoY % ∆ Total revenue ex-notable items C YoY % ∆ $2,476M $2,459M -1% $2,959M $2,985M +1% Fee $526M +9% Fee 1,813 1,839 1,839 +1% $483M 2,299 2,361 +3% revenue revenue NII 663 620 -6% NII 660 624 -5% 3Q22 3Q
Slide 16: Reconciliation of notable items
Quarterly reconciliation % Change Year-to-Date % Change 3Q23 3Q23 YTD 2023 vs. vs. vs. (Dollars in millions, unless noted otherwise) 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 3Q22 2Q23 2022 2023 YTD 2022 Total revenue, GAAP-basis $ 3,081 $ 2,953 $ 2,959 $ 3,155 $ 3,101 $ 3,110 $ 2,691 (9.1)% (13.5)% $ 8,99
Slide 17: Reconciliation of constant currency FX impacts
Currency Excluding Currency % Change Constant Reconciliation of Constant Currency FX Impacts Reported Translation Impact Impact Currency 3Q23 3Q23 3Q23 3Q23 3Q23 3Q23 vs. vs. vs. vs. vs. vs. (Dollars in millions) 3Q22 2Q23 3Q23 3Q22 2Q23 3Q22 2Q23 3Q22 2Q23 Non-GAAP basis Total revenue, excluding no
Slide 18: Endnotes
1. New asset servicing mandates, including announced Alpha front-to-back investment servicing clients, may be subject to completion of definitive agreements, approval of applicable boards and shareholders and customary regulatory approvals. New asset servicing mandates and servicing assets remaining
Slide 19: Forward-looking statements
This presentation (and the conference call referenced herein) 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
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 APAC Asia-Pacific 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