State Street Corporation · NYSE:STT
State Street — Q1 2022 Earnings Presentation
21 slides from State Street's earnings presentation, Apr 14, 2022
Slide 1: 1Q 2022 Financial Highlights
April 14, 2022 1Q 2022 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 first quarter 2022 financial results. That news release contains a more detailed discussion of many of the matters descri
Slide 3: 1Q22 highlights
1Q22 highlights All comparisons are to corresponding prior year periods unless noted otherwise • Global inflationary environment driven by supply chain disruptions, broad-based pent-up demand, and pandemic related fiscal policies Macro • Heightened equity market volatility reflecting inflation, inte
Slide 4: Summary of 1Q22 financial results
Summary of 1Q22 financial results Quarters %∆ 1Q21 %∆ (GAAP, $M, except EPS data, or where otherwise noted) ex-currency 1Q21 4Q21 1Q22 4Q21 1Q21 translation A Revenue: Back office servicing fees $1,266 $1,272 $1,268 (0)% 0% 2% Middle office services 103 105 100 (5) (3) (2) Servicing fees 1,369 1,377
Slide 5: AUC/A and AUM levels, markets and flows performance
AUC/A and AUM levels, markets and flows performance A AUC/A and AUM Market indices3 AUC/A ($T, as of period-end) 1 (% change) 1Q22 vs 4Q21 1Q21 +4% • 4% increase from 1Q21 largely driven EOP (5)% 14% -4% by: S&P 500 Daily Avg (3) 15 – Higher equity market levels, client flows, $40.3 $43.7 $41.7 and
Slide 6: Revenue: Servicing fees
Revenue: Servicing fees Servicing fees ($M) 1Q22 performance Total YoY +4% Servicing fees of $1,368M flat YoY and down (1)% QoQ; $2,950 $3,034 $2,990 $3,053 $3,081 QoQ +1% revenue up 2% YoY and flat QoQ ex-FXA • Flat YoY as higher client activity and flows, average equity market levels, Flat +2% ex-
Slide 7: Revenue: Management fees
Revenue: Management fees Management fees ($M) 1Q22 performance Total YoY +4% Management fees of $520M up 5% YoY; down (2)% QoQ $2,950 $3,034 $2,990 $3,053 $3,081 QoQ +1% revenue • Up 5% YoY primarily reflecting higher average equity market levels and ETF net inflows +5% • Down (2)% QoQ largely due t
Slide 8: Revenue: Markets, Software and processing, and Other fee revenue
Revenue: Markets, Software and processing, and Other fee revenue Markets, Software & processing, and Other fees ($M) 1Q22 performance • FX trading services of $359M Total YoY +4% $2,950 $3,034 $2,990 $3,053 $3,081 QoQ +1% – Up 4% YoY primarily reflecting higher FX volatility, partially offset revenu
Slide 9: Enterprise solutions enabled by State Street Alpha
SM Enterprise solutions enabled by State Street Alpha Future growth driven by Front office, Middle Front office software and data ($M) A office, and Alpha Total ($M) 1Q21 4Q21 1Q22 YoY +4% revenue $2,950 $3,034 $2,990 $3,053 $3,081 QoQ +1% Front office metrics +44% 6 New bookings $4 $11 $5 +11% $148
Slide 10: Revenue: Net interest income
Revenue: Net interest income NII and NIM ($M) 10 Average balance sheet highlights ($B) A Total YoY +4% 1Q21 4Q21 1Q22 $2,950 $3,034 $2,990 $3,053 $3,081 QoQ +1% revenue +9% Total assets $296 $303 $295 +5% Interest-earning assets 255 265 258 $509 $487 $484 $467 $467 Loans 28 34 34 Investment portfoli
Slide 11: Expenses
Expenses Expenses 1Q22 performance A (Ex-notable items, non-GAAP, $M) (Ex-notable items, non-GAAP)A +1% Expenses of $2,318M up 1% YoY and up 7% QoQ; A +2% ex-FX up 2% YoY and 8% QoQ ex-FXA +7% • Compensation and employee benefits of $1,232M 13 $2,293 $2,318 – Down (1)% YoY primarily driven by lower
Slide 12: Capital ratios
Capital ratios 2 Capital ratios Capital highlights (%, as of period-end) CET1 (Standardized) • 1Q22 quarter end standardized CET1 ratio of 11.9% decreased (2.4)%pts QoQ primarily reflecting lower AOCI due to the significant increase in rates 14.3% 13.5% across the curve, the implementation of SA-CCR
Slide 13: Summary
Summary All comparisons are to corresponding prior year periods unless noted otherwise 1Q22 financial review • EPS of $1.57, up 15%; pre-tax margin of 24.5%, up 3%pts; ROE of 9.5%; generated positive total and fee operating leverage of 5%pts and 4%pts, respectively • EPS ex-notable items of $1.59, u
Slide 14: Appendix
1Q22 line of business performance 15 Reconciliation of notable items 16 Reconciliation of constant currency impacts 17 Appendix Endnotes 18 Forward-looking statements 19 Non-GAAP measures 20 Definitions 21 14
Slide 15: 1Q22 line of business performance
1Q22 line of business performance Investment Servicing Investment Management State StreetB Total revenueA YoY % ∆ Total revenue YoY % ∆ Total revenue ex-notable itemsA, C YoY % ∆ $2,558M +5% $3,081M +4% $2,444M $2,950M +4% $506M $523M +3% Fee 1,971 2,050 Fee 2,573 +4% 2,483 revenue revenue NII 473 5
Slide 16: Reconciliation of notable items
Reconciliation of notable items Quarterly reconciliation % Change 1Q22 1Q22 vs. vs. (Dollars in millions, unless noted otherwise) 1Q21 2Q21 3Q21 4Q21 1Q22 1Q21 4Q21 Total revenue, GAAP-basis 2,950 3,034 2,990 3,053 3,081 4.4% 0.9% Less: Other income (53) (58) Total revenue, excluding notable items 2
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 1Q22 1Q22 1Q22 1Q22 1Q22 1Q22 vs. vs. vs. vs. vs. vs. (Dollars in millions) 1Q21 4Q21 1Q22 1Q21 4Q21 1Q21 4Q21 1Q21 4Q2
Slide 18: Endnotes
Endnotes 1. 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 servicing mandates and servicing assets remain
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 ARR Annual recurring revenue AUC/A Assets under custody and/or administration AUM Assets under management Barclays Global Agg Barclays Global Agg represents Barclays Global Aggregate Bond Index BBH Brown Brothers Harriman Bps Basis points, with one basis point representing one hundredth