Slide 1: 2Q 2020 Financial Highlights
July 17, 2020 2Q 2020 Financial Highlights (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 second quarter 2020 financial results. That news release contains a more detailed discussion of many of the matters descr
Slide 3: Successfully navigating through the challenging environment
Successfully navigating through the challenging environment Client Product Supporting the Planning ahead for engagement performance financial system our employees • Continued to onboard new • AUC/A of $33.5T; servicing • Supporting clients' liquidity and • Developed a framework to clients and manage
Slide 4: 2Q20 and 1H20 highlights
2Q20 and 1H20 highlights GAAP basis, all comparisons are to corresponding prior year periods unless noted otherwise 2Q20 1H20 • EPS of $1.86, up 31% • EPS of $3.48, up 33% • Total revenue of $2.9B, up 2% • Total revenue of $6.0B, up 3% Financial ‒ Fee revenue of $2.4B, up 5% ‒ Fee revenue of $4.8B,
Slide 5: Summary of 2Q20 results
Summary of 2Q20 results Quarters %∆ (GAAP, $M, except EPS data, or where otherwise noted) 2Q19 1Q20 2Q20 2Q19 1Q20 Revenue: Servicing fees $1,252 $1,287 $1,272 2% (1)% Management fees 441 449 425 (4) (5) Foreign exchange trading services 273 459 344 26 (25) Securities finance 126 92 92 (27) - Softwa
Slide 6: AUC/A and AUM levels, markets and flows performance
AUC/A and AUM levels, markets and flows performance A AUC/A and AUM Market indices5 AUC/A ($T, as of period-end) • 2% increase from 2Q19 primarily (% change) 2Q20 vs 2Q19 1Q20 +2% driven by: – Higher period-end market levels and client EOP 5% 20% +5% S&P 500 flows, partially offset by a previously D
Slide 7: Revenue: Servicing fees
Revenue: Servicing fees Servicing fees ($M) 2Q20 performance Servicing fees of $1,272M up 2% YoY, down (1)% QoQ Total YoY +2% revenue $2,873 $2,903 $3,048 $3,065 $2,937 QoQ -4% • Up 2% YoY primarily driven by higher client activity and net new business, partially offset by moderating pricing headwin
Slide 8: Revenue: Management, Markets, Software and processing fee revenue
Revenue: Management, Markets, Software and processing fee revenue Management, Markets, Software and processing fee 2Q20 performance revenue ($M) Management, Markets, Software and processing fee $3,065 Total $2,873 $2,937 revenue of $1,106M up 10% YoY, down (1)% QoQ revenue • Management fees of $425M
Slide 9: CRD performance and Alpha integration progress
CRD performance and Alpha integration progress Quarterly metrics ($M) Achieving key milestones and business momentum • Strong quarterly performance driven by a significant wealth client +59% implementation and several client renewals8 +45% • Robust Alpha pipeline, with active discussions and continu
Slide 10: Revenue: Net interest income
Revenue: Net interest income NII and NIM ($M)A Balance sheet highlights Total $3,065 $2,937 Average Period-end revenue $2,873 Servicing -9% ($B) 2Q19 1Q20 2Q20 2Q19 1Q20 2Q20 fees -16% Total assets $222 $251 $285 $242 $363 $280 Mgmt. fees, FX, SF, Loans 24 28 27 25 32 27 Software $613 $664 $559 & pr
Slide 11: High quality loan portfolio
High quality loan portfolio Average loans by segment ($B)13 2Q20 loan portfolio highlights $13 $13 High quality loan portfolio; 79% investment grade; majority of $12 credit extended to existing clients 19% 81% 84% 84% • Fund Finance: Primarily includes ‘40 Act Funds, PE Capital Call $6 Finance, and
Slide 12: Expenses
Expenses Expenses 2Q20 YoY: Expenses ex-notable items down (3)% A (Ex-notable items and seasonal expenses, non-GAAP, $M) • Compensation and benefits down (3)% YoY primarily driven by lower -3% salaries and headcount • Information systems and communications up 3% YoY largely -1% reflecting software c
Slide 13: Investment portfolio and capital ratios
Investment portfolio and capital ratios Investment portfolio highlights18 Capital ratios19 ($B, portfolio metrics as of quarter-end) (%, as of period-end) CET1 (Standardized) 11.5% 10.7% 12.3% Headroom 4.3% $123.8 1.0% G-SIB surcharge A 2.5% CCB/SCB20 12% $109.3 8.0% 4.5% Minimum ratio $92.5 ~$27B f
Slide 14: Summary
Summary 2Q20 financial performance • EPS of $1.86, up 31% YoY; ROE of 12.1% – Fee revenue increased 5% YoY largely due to elevated FX volume and volatility, stronger CRD activity and improving servicing fees, partially offset by a decline in securities finance revenue and lower average international
Slide 15: Appendix
Medium-term financial targets 16 Reconciliation of notable items 17 Endnotes 18 Appendix Forward-looking statements 19 Non-GAAP measures 20 Definitions 21 15
Slide 16: Medium-term financial targets
Medium-term financial targets A 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 equ
Slide 17: Reconciliation of notable items
Reconciliation of notable items Quarterly reconciliation (Dollars in millions, unless noted otherwise) 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 Total revenue, GAAP-basis 2,932 2,873 2,903 3,048 3,065 2,937 Less: Other income (44) Total revenue, excluding notable items 2,932 2,873 2,903 3,004 3,065 2,937 Total
Slide 18: Endnotes
Endnotes 1. Recognized Global Markets as the #1 FX provider to asset managers in the 2020 Euromoney (Real Money) FX Survey. 2. New asset servicing mandates, including announced front-to-back investment servicing clients, may be subject to completion of definitive agreements, approval of applicable b
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 AUC/A Assets under custody and/or administration AUM Assets under management Barclays Agg Barclays Agg represents Barclays Global Aggregate Bond Index Bps Basis points, with one basis point representing one hundredth of one percent CCAR Comprehensive Capital Analysis and Review CCB Capit