State Street Corporation · NYSE:STT
State Street — Q1 2021 Earnings Presentation
20 slides from State Street's earnings presentation, Apr 16, 2021
Slide 1: 1Q 2021 Financial Highlights
April 16, 2021 1Q 2021 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 2021 financial results. That news release contains a more detailed discussion of many of the matters descri
Slide 3: 1Q21 highlights
1Q21 highlights All comparisons are to corresponding prior year periods unless noted otherwise • EPS of $1.37, down (15)%; $1.47 excluding notable items, down (12)%A • Total revenue of $3.0B – Fee revenue of $2.5B, up 4%; up 2% ex-currency translationA reflecting higher servicing, management and sof
Slide 4: Summary of 1Q21 financial results
Summary of 1Q21 financial results Quarters %∆ 1Q20 %∆ (GAAP, $M, except EPS data, or where otherwise ex-currency noted) 1Q20 4Q20 1Q21 4Q20 1Q20 translation B Revenue: Servicing fees $1,287 $1,307 $1,371 5% 7% 4% Notable Items Management fees 464 493 493 - 6 4 QuartersC Foreign exchange trading serv
Slide 5: AUC/A and AUM levels, markets and flows performance
AUC/A and AUM levels, markets and flows performance A AUC/A and AUM Market indices7 AUC/A ($T, as of period-end) • 26% increase from 1Q20 primarily (% change) 1Q21 vs 4Q20 1Q20 +26% driven by: EOP 6% 54% +4% – Higher period-end market levels, net new S&P 500 Daily Avg 9 27 business growth, and clien
Slide 6: Revenue: Servicing fees
Revenue: Servicing fees Servicing fees ($M) 1Q21 performance Total YoY -4% Servicing fees of $1,371M up 7% YoY and up 5% QoQ; revenue $3,065 $2,937 $2,784 $2,917 $2,950 QoQ +1% A ex-FX, up 4% YoY and QoQ 1Q21 performance included growth in the large Asset Manager client segment +7% A particularly in
Slide 7: Revenue: Management, Markets, Software and processing fee revenue
Revenue: Management, Markets, Software and processing fee revenue Management, Markets, Software & processing fees ($M) 1Q21 performance Total YoY -4% • Management fees of $493M revenue $3,065 $2,937 $2,784 $2,917 $2,950 A QoQ +1% – Up 6% YoY (up 4% ex-FX ) and flat QoQ reflecting higher average equi
Slide 8: CRD and State Street Alpha
CRD and State Street Alpha CRD financial performance CRD 1Q21 highlights (Standalone basis, $M)A • 1Q21 revenue of $104MA +4% – Up 4% YoY primarily due to higher software-enabled -10% revenue $145 – Down (10)% QoQ largely driven by the absence of seasonal on-prem activity $115 • New SaaS clients inc
Slide 9: Revenue: Net interest income
Revenue: Net interest income NII and NIM ($M) 13 Average balance sheet highlights ($B) Total YoY -4% 1Q20 4Q20 1Q21 revenue $3,065 $2,917 $2,950 QoQ +1% Total assets $251 $277 $296 -30% -6% Interest-earning assets 207 238 255 $664 $499 Loans 28 28 28 $467 A Investment portfolio (ex. MMLF) 96 108 107
Slide 10: Expenses
Expenses Expenses 1Q21 performance A (Ex-notable items, non-GAAP, $M) (Ex-notable items, non-GAAP)A +2% Expenses of $2,293M up 2% YoY and 8% QoQ; A Flat ex-FX A ex-FX, flat YoY and up 7% QoQ +8% +7% ex-FX A Compensation and employee benefits of $1,242M15 $2,244 $2,293 – Up 3% YoY (up 1% ex-FX) prima
Slide 11: Capital ratios
Capital ratios 3 Capital ratios Capital highlights (%, as of period-end) CET1 (Standardized) • 1Q21 standardized CET1 ratio decreased (1.5)%pts QoQ primarily driven by an episodic increase in RWA related to FX trading and overdraft 12.3% activity, as well as lower AOCI and an increase in other intan
Slide 12: Summary
Summary All comparisons are to corresponding prior year periods unless noted otherwise 1Q21 financial review • EPS of $1.37, down (15)%; Pre-tax margin of 21.3%, down (4.0)%pts; ROE of 8.4% • EPS ex-notable items of $1.47, down (12)%A – Fee revenue of $2.5B, up 4%; up 2% ex-currency translationA, pr
Slide 13: Appendix
1Q21 line of business performance 14 Reconciliation of notable items 15 Reconciliation of constant currency impacts 16 Appendix Endnotes 17 Forward-looking statements 18 Non-GAAP measures 19 Definitions 20 13
Slide 14: 1Q21 line of business performance
1Q21 line of business performance Investment Servicing Investment Management State Street Total revenueA YoY % ∆ Total revenue YoY % ∆ Total revenueA YoY % ∆ $2,612M $3,065M $2,444M -6.4% $2,950M -3.8% Fee 1,947 $506M +11.7% Fee $453M 2,399 revenue 1,971 +1.2% revenue 2,483 +3.5% NII 663 NII 664 473
Slide 15: Reconciliation of notable items
Reconciliation of notable items Quarterly reconciliation % Change 1Q21 1Q21 vs. vs. (Dollars in millions, unless noted otherwise) 1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 4Q20 Total expenses, GAAP basis $ 2,255 $ 2,082 $ 2,103 $ 2,276 $ 2,332 3.4% 2.5% Less: Notable expense items: Repositioning charges: Compen
Slide 16: Reconciliation of constant currency impacts
Reconciliation of constant currency impacts Currency Translation Excluding Currency Reported % Change Constant Currency Impact Impact 1Q21 1Q21 1Q21 1Q21 1Q21 1Q21 vs. vs. vs. vs. vs. vs. (Dollars in millions, except earnings per share or where otherwise noted) 1Q20 4Q20 1Q21 1Q20 4Q20 1Q20 4Q20 1Q2
Slide 17: 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 18: 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 19: 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 20: Definitions
Definitions AOCI Accumulated other comprehensive income 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 Bps Basis points, with one basis point representin