State Street Corporation · NYSE:STT
State Street — Goldman Sachs U.S. Financial Services Conference 2019
17 slides from State Street's conference presentation, Dec 11, 2019
Slide 1: Goldman Sachs U.S. Financial Services Conference
Goldman Sachs U.S. Financial Services Conference Ronald P. O’Hanley Chief Executive Officer Wednesday, December 11, 2019
Slide 2: Preface and forward-looking statements
Preface and forward-looking statements This presentation contains forward-looking statements as defined by United States securities laws. These statements are not guarantees of future performance, are inherently uncertain, are based on assumptions that are difficult to predict and have a number of r
Slide 3: 3Q19 & 2019YTD review
3Q19 & 2019YTD review 3Q19YTD Business Metrics Assets Under Custody and Assets Under Charles River Development Administration1 Management1 standalone NIBTA $32.9T ~$3.0T $132M $1.5T new wins $100B net inflows $42M new bookings 3Q19 Financial Performance Stabilized servicing NII navigating challengin
Slide 4: How we drove results in 2019
How we drove results in 2019 Strategic Priorities 2019 Objectives 2019 Results 1 Executive client coverage model complete, with senior Upgrade our client executives to better Reignite servicing relationship managers overseeing top 60 clients partner with our top clients 2 fee growth Current set
Slide 5: Improving financial trends
Improving financial trends Stabilizing servicing fee revenue Disciplined expense management Servicing fees ($M) Underlying expenses ex-CRD & seasonal items ($M)A 1,333 1,286 2,116 1,272 2,091 1,251 1,252 2,077 2,079 2,062 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 Navigating the interest rate
Slide 6: Improving our cost base
Improving our cost base A Underlying expenses ex-CRD ($B) 2019 actions -1.5% 8.57 8.43 Reassessment of the technology cost structure 8.01 • Early actions: Outlined and executed +9% +10% 2.03 • Optimization: Identified 2020 opportunities 2.21 IT 1.85 • Technology transformation: Ongoing Process simpl
Slide 7: Resetting IT costs: Bending the cost curve
Resetting IT costs: Bending the cost curve from an expected +11% to a flat-to-down 2% net reduction Estimated total IT spend A (Non-GAAP, $B) +11% Flat to -2% ~150M ~ -(150-200)M ~ -(30)M ~250M ~2.3 ~2.2-2.3 ~50M ~70M CRD CRD 2.0 10M CRD 2.0 ~2.2 ~2.1-2.2 2018 Incremental Technology 2019E Incrementa
Slide 8: 2020 technology optimization plan
State Street’s 2020 technology optimization plan will result in expected IT gross savings of $150-200M, with net savings flat-to-down 2% 2020 KPIsA • Optimize IT workforce and location strategy to improve Increase workforce operating efficiency and client services offshore ratio by 10-15% • Prioriti
Slide 9: IT innovation and productivity advance our strategic priorities
IT innovation and productivity advance our strategic priorities and support our vision Reignite servicing fee growth Innovate to grow diversified revenue streams Ongoing transformation of our Deploy the leading technology infrastructure front-to-back office platform underpins everything we do Genera
Slide 10: Questions
Goldman Sachs U.S. Financial Services Conference Questions Ronald P. O’Hanley, Chief Executive Officer and Eric W. Aboaf, Chief Financial Officer Answers Wednesday, December 11, 2019
Slide 11: Appendix
Appendix Medium-term financial targets 12 Reconciliation of underlying expenses 13 Endnotes 14 Forward-looking statements 15 Non-GAAP measures 16 Definitions 17 11
Slide 12: Medium-term financial targets
Medium-term financial targetsA Our strategic priorities will deliver growth, drive innovation and enhance shareholder value Revenue growth 4–5% with CRD Pre-tax margin Further improve by an additional 2%pts EPS growth 10–15% ROE 12–15% Capital return Targeting total payout ratio greater than or equa
Slide 13: Reconciliation of underlying expenses
Reconciliation of underlying expenses Quarterly reconciliation7 (Dollars in millions) 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Total expenses, GAAP basis 2,268 2,170 2,091 2,486 2,293 2,154 2,180 Less: Notable expense items: Repositioning charges: Compensation and employee benefits (61) (198) Occupancy (1
Slide 14: Endnotes
Endnotes 1. End of period as of September 30, 2019. New asset servicing mandates, including announced 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 servic
Slide 15: Forward-looking statements
Forward-looking statements This presentation (and the discussion accompanying it) 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 operati
Slide 16: 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 17: Definitions
Definitions AUC/A Assets under custody and/or administration AUM Assets under management Bps Basis points, with one basis point representing one hundredth of one percent CCAR Comprehensive Capital Analysis and Review CET1 Common equity tier 1 ratio CRD Charles River Development Diluted earnings per
State Street — Goldman Sachs U.S. Financial Services Conference 2019 on 6ix