State Street Corporation · NYSE:STT
State Street — Credit Suisse Financial Services Forum 2019
20 slides from State Street's conference presentation, Feb 12, 2019
Slide 1: Credit Suisse Financial Services Forum
Credit Suisse Financial Services Forum Andrew Erickson Executive Vice President, Head of Global Services Tuesday, February 12, 2019
Slide 2: Preface and forward-looking statements
Preface and forward-looking statements This presentation (and the conference call accompanying it) 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 d
Slide 3: Uniquely positioned in a secularly attractive business
Uniquely positioned in a secularly attractive business 2018 Total Revenue Mix3 • Strong investment capabilities, • 2nd largest global custody bank managing ~$2.5T globally2 2 with ~$32T AUC/A NII 22% • 3rd largest ETF provider 2 Management globally with AUM of ~ • Trusted with more than 10% of fees
Slide 4: Investment Servicing summary results
Investment Servicing summary results ($M, except where otherwise '12-'17 YoY FY2012 FY2017 FY2018C noted) CAGR (%)6 % ∆ Fee RevenueB Servicing fees $4,414 $5,365 4% $5,429 1% • Historical CAGR of 4% servicing fee growth Foreign exchange compares to 1% YoY growth in 20186 938 999 1% 1,071 7% trading
Slide 5: Servicing fee revenue drivers
Servicing fee revenue drivers Revenue drivers7 Products including custody, accounting, fund administration, middle-office Market Flows & Net new Client FY2012 – levels activity business pricing ~+4% FY2017 + ++= CAGR6 ~2% ~2% ~2% ~(2)% Market Flows & Net new Client FY2017 – levels activity business
Slide 6: Key execution priorities to expand servicing business
Key execution priorities to expand servicing business 1 2 3 Increase focus Deploy the leading New client on Global Giant front-to-back coverage client segment platform program 4 5 6 Capitalize on Strengthen growth markets Foster a higher pricing and performing and discipline distinct product leaner
Slide 7: Increase focus on Global Giant client segment and wallet share gains
Increase focus on Global Giant client segment and wallet share gains Global Giants are growing faster State Street has significant than other segments penetration and market share AUM CAGR 2012-20176 • Fast-growing asset and revenue Client pools ~100% Global Giant Penetration ~ Asset • Strong market
Slide 8: New approach to doing business: Enhanced client executive program and pricing governance
New approach to doing business: Enhanced client executive program and pricing governance Client executives will lead cross-functional teams …and improving service quality and innovation to drive focused on maximizing servicing opportunities… profitable growth Coverage aligns with global giants, tran
Slide 9: Navigating servicing fee headwinds
Navigating servicing fee headwinds Case study: Servicing client contribution post-fee renegotiationA General renegotiation themes For illustrative purposes only • Opportunity for client executives to ~7% revisit State Street’s client relationship Revenue 80 (~$M): 75 • Extend original term 10 15 • A
Slide 10: Capitalize on strong presence in high-growth markets
Capitalize on strong presence in high-growth markets Market leaders in the fastest growing product Targeting high-growth geographies segments9 (~$T, % CAGR6) Investment Servicing – U.S. Market size Servicing fee geographic mix ($M)A International +20% 4.8 Global ETF STT ranked $5,365 $5,429 AUM 1.9
Slide 11: Foster a higher performing and leaner organization
Foster a higher performing and leaner organization Expense management Expense savings program Consolidated STT, $M 2019 State Street expense savings program expected to generate productivity savings of ~$350M through resource discipline (~$160M) and process re-engineering & automation Targeting ~1%
Slide 12: Well positioned to reignite servicing fee growth
Well positioned to reignite servicing fee growth Focused on expanding the investment servicing franchise through six key execution priorities: Increase focus Deploy the leading New client on Global Giant front-to-back coverage program client segment platform Capitalize on growth markets Foster a hig
Slide 13: Questions and Answers
Credit Suisse Financial Services Forum Questions and Andrew Erickson, Executive Vice President, Head of Global Services Eric W. Aboaf, Chief Financial Officer Answers Tuesday, February 12, 2019
Slide 14: Appendix
Appendix Investment services client segment revenue 15 opportunities Endnotes 16 – 17 Forward-looking statements 18 Non-GAAP measures 19 Definitions 20 14
Slide 15: Investment services client segment revenue opportunities
Investment services client segment revenue opportunities Top four sub-segments represent approximately 2/3rds of industry asset poolsA For illustrative purposes only High Global Giants 14 1 Global Asset Managers 2 Large, Sophisticated Asset Owners Emerging Institutions 3 Global Insurance firms 13 La
Slide 16: Endnotes
Endnotes Several of the below notes indicate that source data is drawn from one or more sources, including State Street, or that analyses, calculations, compilations or similar exercises are applied to data presented by one or more sources, including by State Street. These data and analyses, calcula
Slide 17: Endnotes
Endnotes Several of the below notes indicate that source data is drawn from one or more sources, including State Street, or that analyses, calculations, compilations or similar exercises are applied to data presented by one or more sources, including by State Street. These data and analyses, calcula
Slide 18: 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 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 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 CRD Charles River Development Diluted earnings per share (EPS) Net income available
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