State Street Corporation · NYSE:STT
State Street — 2010 Banking and Financial Services Investor Conference hosted by Bank of America Merrill
29 slides from State Street's conference presentation, Nov 16, 2010
Slide 1: Well Positioned for the Future
Joseph L. Hooley Chief Executive Officer 2010 Banking and Financial Services Investor Conference Hosted by Bank of America Merrill Lynch 16 November 2010 Exhibit 99.1 Well Positioned for the Future
Slide 2: Reminder
Reminder This presentation contains forward-looking statements as defined by United States securities laws, including statements about our goals and expectations regarding our business, financial condition, results of operations and strategies, the financial and market outlook, governmental and regu
Slide 3: Agenda
Well Positioned for the Future Core Business Strength Global Opportunities Current Environment Strategic Direction Agenda
Slide 4: STATE STREET.
STATE STREET.
Slide 5: STATE STREET.
STATE STREET.
Slide 6: Core Business Strength
MARKET POSITION No. 1 in U.S. Mutual Fund Accounting No. 1 in Investment Manager Operations Outsourcing No. 1 in Alternative Asset Servicing No. 1 in Securities Finance Leading Transition Manager Electronic Trading Innovator No. 2 in worldwide institutional assets 4 No. 2 passive manager of domestic
Slide 7: Core Business Strength: Trends Driving Growth
Well Positioned for the Future TRENDS DRIVING GROWTH Growth in savings/retirement Globalization Industry consolidation Growth in electronic trading Demand for solution-based asset management Increasing product complexity Expense pressure affecting investment managers Regulatory reform and changes in
Slide 8: Core Business Strength – Market Recognition
Well Positioned for the Future Pensions & Investments 2010 Money Managers Survey International Custody and Fund Administration 2010 Americas Service Provider Awards 2010 Global Pensions Awards 2010 Global Pensions Awards exchangetradedfunds.com 2010 Global ETF Awards Global Investor 2010 Global Cust
Slide 9: Core Business Strength – Client Wins
Well Positioned for the Future BUSINESS YTD NEW WINS * ($ billions) INSTALLED THRU Q3 ($ billions) TO BE INSTALLED ($ billions) US Asset Servicing $760.7 $118.3 $642.4 Non-US Asset Servicing $306.4 $167.8 $138.6 US Asset Management $86.9 $66.4 $20.5 Non-US Asset Management $98.6 $90.8 $7.8 * Assets
Slide 10: STATE STREET.
STATE STREET.
Slide 11: Global Opportunities: European Market
1% 4% 3% 2% 4% 31% 6% 27% Well Positioned for the Future UK European Market Forecast to Grow 5.9% over next 3 years 5 1 Total assets include seven key European markets: UK, Netherlands, Germany, Ireland/Luxembourg offshore assets, Italy, Switzerland and France 2 ICI, 9/09 3 For Germany, France, UK,
Slide 12: STATE STREET.
STATE STREET. _¢g STATE STREET. . SSS
Slide 13: Global Opportunities: Asia-Pacific Market
21% 2% 1% Well Positioned for the Future 68% 2% 1% 3% 3% 41% 1% 3% 8% 1 Total assets include seven key markets: Japan, Australia, Hong Kong, South Korea, Taiwan, China and Singapore 2 Collectives as of September 2009 3 Government related: Japan includes Japan Post; Taiwan includes Chunghwa Post, for
Slide 14: STATE STREET.
STATE STREET. — STATE STREET. => =o
Slide 15: Goal to Double Non-US Revenue over 5 Years
Well Positioned for the Future 23% 77% 41% 59% 1999 Pro forma 2009 1 Excludes impact of discount accretion ($621 million); reported 2009 non-US revenue for State Street was $2.878 billion (36%); pro forma 2009 is adjusted for estimated impact of Intesa and Mourant 2 Assumes F/X rates stay constant G
Slide 16: Global Opportunities – Consolidation: Top 20 Companies by AuC/AuA
Well Positioned for the Future Source: Company reports, Global Custody.net, Institutional Investor Global Custodian Survey 1 Data for BNY, State Street, RBC Dexia, & Brown Brothers reflect AUA as of 9/30/2010; as of 6/30/10 for HSBC SS, BNP Paribas, CACEIS, Societe Generale; all others reflect AUC d
Slide 17: Excellent Track Record in Executing Accretive Acquisitions
Established State Street’s leadership position in Europe Added hedge fund servicing capability Expanded electronic high-speed trading capability Accelerated State Street’s leadership in private equity servicing Expanded share of mutual fund and hedge fund servicing markets Excellent Track Record in
Slide 18: Both Acquisitions Progressing as Expected
State Street is now: - Leading asset servicer in Italy - No. 2 asset servicer of offshore funds in Luxembourg and Ireland 1 Goal to retain 90% of revenue of ~€293M Expect to remove ~€60M in costs over 5 years Additional cross sell opportunities State Street is now 2 : - No.1 in alternative asset ser
Slide 19: Expands SSgA's Investment Management Capabilities
A €26 billion 1 Dublin-based manager of active equity strategies, as well as cash, fixed income, property and asset allocation - SSgA currently sub-advises about 30% of these assets Complements and enhances SSgA’s core competencies and supports solutions business Transaction details: - Cost: ~€57 mi
Slide 20: STATE STREET.
STATE STREET.
Slide 21: Current Environment – Regulatory Reform
Well Positioned for the Future Evolving Regulatory Reform LANDSCAPE Extensive rule-making process will determine final outcome Not expected to have significant impact on our business model Expect to be deemed a systemically important financial institution G-20 expected to endorse Basel III proposal
Slide 22: Strong Capital Generation and Strategic Deployment
Well Positioned for the Future “WELL CAPITALIZED” 1 STATE STREET CORP. 9/30/10 12/31/09 Tier 1 Leverage 5% 2 8.3% 8.5% Tier 1 Capital 6% 15.8% 17.7% Tier 1 Common Ratio 13.9% 15.6% Total Capital 10% 17.1% 19.1% Tangible Common Equity 4.25% – 4.75% 3 6.9% 6.6% TCE / RWA 4 13.3% 12.8% 1 Except as note
Slide 23: Current Environment – Market-Driven Revenue
Client deposit volumes remain strong Expect administered rates worldwide to remain flat Expect 2010 NIM to be slightly higher than 165 bps, excluding discount accretion Continuing pressure from reduced demand and de-risking by asset owners Volume decline and spread pressures persist Low level of cro
Slide 24: Focused on Operating Model Innovation to Fuel New Capabilities
Well Positioned for the Future Focused on Operating Model Innovation to Fuel New Capabilities and Create Efficiencies Focusing on structural expense improvements Implementing process improvement (LEAN) Utilizing operations in Poland, China and India Applying technology to decrease unit costs Optimiz
Slide 25: Current Environment – Drivers of 2010 Outlook
Well Positioned for the Future Strength in servicing fee revenue Successful integration of acquisitions Modest improvement in management fee revenue NIM expected to be slightly above 165 bps (excluding discount accretion) Continued expense controls Expect Operating-Basis EPS to be Slightly Above 200
Slide 26: STATE STREET.
STATE STREET.
Slide 27: Strategic Direction
Well Positioned for the Future Doubling non-US revenues over the next five years Accelerating market share globally through organic growth and acquisition Driving industry innovation for clients by maintaining technology investment at 20% – 25% of operating expenses Strengthening industry-leading op
Slide 28: Strategic Direction – Summary
Well Positioned for the Future Competitive Position Client Relationships Capital Strength Cost Controls Caliber of Talent Strategic Direction – Summary
Slide 29: State Street
STATE STREET. ma) STATE STREET.