State Street Corporation · NYSE:STT
State Street — Q1 2023 Earnings Presentation
21 slides from State Street's earnings presentation, Apr 17, 2023
Slide 1: 1Q 2023 Financial Highlights
1Q 2023 Financial Highlights April 17, 2023 NYSE: STT
Slide 2: Preface and forward-looking statements
Preface and forward-looking statements This presentation includes certain highlights of, and also material supplemental to, State Street Corporation’s news release announcing its first quarter 2023 financial results. That news release contains a more detailed discussion of many of the matters descri
Slide 3: 1Q23 highlights
1Q23 highlights All comparisons are to corresponding prior year period unless noted otherwise • EPS of $1.52, down (3)% YoY • Total revenue of $3.1B, up 1% YoY, with NII up 50% primarily reflecting higher global interest rates and fee revenue down (9)% Financial mainly due to lower average market le
Slide 4: Summary of 1Q23 financial results
Summary of 1Q23 financial results Financial results Notable items Quarters %∆ 1Q22 %∆ (GAAP; $M, except EPS data, or where ex-currency QuartersA otherwise noted) ($M, except EPS data) 1Q22 4Q22 1Q23 4Q22 1Q22 translation A 1Q22 4Q22 1Q23 Revenue: Acquisition and restructuring ($9) ($31) - Back offic
Slide 5: AUC/A and AUM levels, markets and flows performance
AUC/A and AUM levels, markets and flows performance 1 4 AUC/A ($T, as of period-end) Market indices 1Q23 vs -10% (% change) 4Q22 1Q22 +2% EOP 7% (9)% • Down (10)% YoY largely driven by lower S&P 500 Daily Avg 4 (10) quarter-end market levels $41.7 EOP 8 (4) $36.7 $37.6 MSCI EAFE Daily Avg 11 (7) EOP
Slide 6: Revenue: Servicing fees
Revenue: Servicing fees Servicing fees ($M) 1Q23 performance Total $3,081 $2,953 $2,959 $3,155 $3,101 YoY +1% Servicing fees of $1,217M down (11)% YoY and up 1% QoQ; revenue QoQ (2)% down (10)% YoY ex-FX • Down (11)% YoY primarily driven by lower average equity and bond market -11% levels, client ac
Slide 7: Revenue: Management fees
Revenue: Management fees Management fees ($M) 1Q23 performance Total $3,081 $2,953 $2,959 $3,155 $3,101 YoY +1% Management fees of $457M down (12)% YoY and flat QoQ; revenue QoQ (2)% down (11)% YoY ex-FX • Down (12)% YoY primarily due to lower average market levels and a -12% previously reported cli
Slide 8: Revenue: Markets, Software and processing, and Other fee revenue
Revenue: Markets, Software and processing, and Other fee revenue Markets, Software & processing, and Other fees 1Q23 performance A (Ex-notable items, non-GAAP, $M) (Ex-notable items, non-GAAP, $M)A Total Revenue $3,081 $2,953 $2,959 $3,155 $3,101 YoY +1% • FX trading services of $342M6 QoQ (2)% (GAA
Slide 9: Revenue: Enterprise solutions enabled by State Street Alpha
Revenue: Enterprise solutions enabled by State Street Alpha Front office software and data ($M) A Future growth driven by Front, Middle and Alpha Total YoY +1% ($M) 1Q22 4Q22 1Q23 revenue $3,081 $2,953 $2,959 $3,155 $3,101 QoQ (2)% Front office metrics -21% -31% New bookings8 $5 $21 $2 $159 ARR2 235
Slide 10: Revenue: Net interest income
Revenue: Net interest income NII and NIM ($M)11 Average balance sheet highlights ($B)A Total YoY +1% 1Q22 2Q22 3Q22 4Q22 1Q23 $3,081 $2,953 $2,959 $3,155 $3,101 QoQ (2)% revenue Total assets $295 $291 $275 $284 $277 +50% CashB 81 80 72 87 81 -3% Investment portfolio 119 114 109 106 107 $791 $766 $66
Slide 11: Expenses
Expenses Expenses 1Q23 performance A (Ex-notable items, non-GAAP, $M) (Ex-notable items, non-GAAP, $M)A +2% A Expenses of $2,369M up 2% YoY and 10% QoQ; +4% ex-FX up 4% YoY ex-FXA +10% • Compensation and employee benefits of $1,292M14 $2,318 $2,369 – Up 5% YoY mainly due to higher salaries and headc
Slide 12: Capital and liquidity ratios
Capital and liquidity ratios Ratios (%, as of period-end) 3 Capital and liquidity highlights CET1 (Standardized) • 1Q23 standardized CET1 ratio at quarter-end of 12.1% decreased 12.9% 13.2% 13.6% (1.5)%pts QoQ primarily driven by the continuation of our common share 11.9% 12.1% repurchase program an
Slide 13: Summary
Summary All comparisons are to corresponding prior year periods unless noted otherwise 1Q23 financial review • EPS of $1.52, down (3)%; ROE of 9.3% – Fee revenue down (9)% mainly driven by lower market levels – NII up 50% primarily due to higher global interest rates – Expenses up 2% primarily refle
Slide 14: Appendix
Appendix 1Q23 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: 1Q23 line of business performance
1Q23 line of business performance Investment Servicing Investment Management State StreetC Total revenueA YoY % ∆ Total revenueB YoY % ∆ Total revenue ex-notable itemsA,D YoY % ∆ $2,558M $2,596M +1% $3,081M $3,101M +1% Fee 1,834 -11% $523M $505M -3% 2,335 -9% 2,050 1,834 Fee 2,573 revenue revenue NI
Slide 16: Reconciliation of notable items
Reconciliation of notable items Quarterly reconciliation % Change 1Q23 1Q23 vs. vs. (Dollars in millions, unless noted otherwise) 1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 4Q22 Total revenue, GAAP-basis $ 3,081 $ 2,953 $ 2,959 $ 3,155 $ 3,101 0.6% (1.7)% Less: Fee revenue (23) Total revenue, excluding notable i
Slide 17: Reconciliation of constant currency impacts
Reconciliation of constant currency impacts Currency Translation Excluding Currency % Change Constant Reconciliation of Constant Currency FX Impacts Reported Impact Impact Currency 1Q23 1Q23 1Q23 1Q23 1Q23 1Q23 vs. vs. vs. vs. vs. vs. (Dollars in millions) 1Q22 4Q22 1Q23 1Q22 4Q22 1Q22 4Q22 1Q22 4Q2
Slide 18: Endnotes
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
Slide 19: Forward-looking statements
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 business, financial and capital condition, results of
Slide 20: Non-GAAP measures
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-G
Slide 21: Definitions
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