State Street Corporation · NYSE:STT
State Street — 2009 Banking and Financial Services Investor Conference Hosted by Bank of America Merrill
22 slides from State Street's conference presentation, Nov 10, 2009
Slide 1: The Foundation for Future Growth
2009 Banking and Financial Services Investor Conference Hosted by Bank of America Merrill Lynch 10 November 2009 Exhibit 99.1 The Foundation for Future Growth
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
The Foundation for Future Growth Capital: Reviewing the Investment Portfolio Costs: Continuous Improvement Focusing on the Foundation Customers: Benefiting From Relationships Agenda
Slide 4: Focusing on the Foundation
Ronald E. Logue Chairman and Chief Executive Officer Focusing on the Foundation
Slide 5: Focusing on the Foundation
The Foundation for Future Growth Strengthened Capital Passed Federal Reserve stress test Raised $2.3B in equity capital Repaid TARP and warrants Executed TCE Improvement Plan Reduced Costs Reduced headcount by 8%* Reduced 2009 performance-based incentive compensation Streamlined operations Deepened
Slide 6: Focusing on the Foundation: Capital
The Foundation for Future Growth Targets State Street Corp Q1 ‘09 Q2 ‘09 Q3 ‘09 Tier 1 Leverage 5%* 10.44% 7.26% 8.02% Tier 1 Capital 6%* 19.13% 14.53% 15.27% Tier 1 Common Ratio 4%** 14.75% 12.57% 13.30% Total Capital 10%* 20.49% 15.87% 16.53% Tangible Common Equity 4.25% - 4.75%*** 5.87% 4.96% 5.5
Slide 7: Focusing on the Foundation: Costs
The Foundation for Future Growth: 3,144 2,246 470 493 425 341 360 798 587 499 0 600 1,200 1,800 2,400 3,000 3,600 4,200 4,800 5,400 9 months 2008 9 months 2009 Other Occupancy Transaction Processing Info Systems Salaries & Benefits -26% $M -15% -29% 22% Expense* Reduction YTD 2009 vs. YTD 2008 5,252
Slide 8: Focus on the Foundation: Customers
The Foundation for Future Growth Business YTD New Wins ¹ ($ billions) Installed thru Q3 ($ billions) To be installed ($ billions) US Asset Servicing $388.7 $332.1 $56.6 Non-US Asset Servicing $237.6 $166.4 $71.2 US Asset Management $60.8 $39.0 $21.8 Non-US Asset Management $58.0 $34.2 $23.9 1 Assets
Slide 9: Capital: Reviewing the Investment Portfolio
Edward J. Resch Chief Financial Officer Capital: Reviewing the Investment Portfolio
Slide 10: Disciplined Investment in Highly Rated Securities
The Foundation for Future Growth Balance Sheet Position Disciplined Investment in Highly Rated Securities *Excludes $22B on deposit with central banks All data as of 9/30/09 unless otherwise noted. Total balance sheet: $141B* of which $98B is in investment portfolio – 80% rated AAA/AA Re-investment
Slide 11: We Remain Comfortable with our Investment Portfolio
The Foundation for Future Growth Unrealized after-tax mark-to-market loss on investment portfolio at 9/30/09 is $2.98B – Unrealized after-tax loss continues to further improve in fourth quarter: $2.39B as of 11/04/09 – As of 11/04/09 compared with 12/31/08, the unrealized after-tax loss has improved
Slide 12: Fourth Quarter 2009 Plan
The Foundation for Future Growth Expect balance sheet to be slightly smaller, compared to Q3 2009, by end of 2009 Continue to manage Investment Portfolio opportunistically and conservatively Started re-investment plan in 2H 2009 Continue to build capital position until regulatory environment becomes
Slide 13: Costs: Continuous Improvement
Joseph L. Hooley President and Chief Operating Officer Costs: Continuous Improvement Customers: Benefiting From Relationships
Slide 14: Structural Expense Reduction
The Foundation for Future Growth 22% year-over-year decline in operating expense during first nine months of 2009* De-layered organization in early 2009 Maximizing efficiency in key processes (LEAN) Centralizing standard processes (COEs) Building capacity in Asia and Eastern Europe – Expanded presen
Slide 15: Trends
Growing complexity in investment vehicles Increased demand for outsourcing The Foundation for Future Growth Trends Customers: Benefiting From Relationships Trends Asset pools growing Industry consolidation Flight to quality Increasing regulatory oversight Globalization
Slide 16: Asset Pools Growing
The Foundation for Future Growth Higher equity markets raising assets under administration and assets under management (3/31/09 to 9/30/09) – AUA up 19% – AUM up 24% Creating opportunities in passive strategies and ETFs – ETF AUM grew by 29% Q3 2009 vs. Q1 2009; 8 new funds launched YTD – Recent pas
Slide 17: Industry Consolidation
The Foundation for Future Growth Investment managers consolidating providers – Leading servicer of asset management industry • 42% market share serving US mutual funds ¹ – Most comprehensive product range in industry including back office, middle office and transfer agency • 53% market share in midd
Slide 18: Increasing Regulatory Oversight
The Foundation for Future Growth • Hedge fund customers seeking more transparency and an independent third-party servicer • 56 new mandates YTD – Private equity servicing AUA of $145 billion as of 9/30/09 – Hedge fund servicing AUA of $276 billion as of 9/30/09 • Growth in demand for Collateral Mana
Slide 19: Globalization
The Foundation for Future Growth • Comprehensive global footprint in 27 countries with common systems infrastructure • Increasing demand for multi-national bundled solutions • Broad-based pipeline across North America, Europe and Asia/Pacific – New customers include QIC, Fonchim, AP Fonden, M&G • Ev
Slide 20: Flight to Quality
The Foundation for Future Growth • Significant product and industry leadership – No. 1 in mutual fund administration ( Global Custodian ) – No. 1 manager of US institutional tax-exempt, DB and endowment assets ( P&I ) • Cross sell strength continues – As of 9/30/09 • State Street’s top 100 customers
Slide 21: Well Positioned for Long-term Growth
The Foundation for Future Growth Strengthened Capital Provides future flexibility – Dividend re-instatement – Share repurchases – Selective acquisitions Reduced Costs Ongoing focus Expect to continue to restrain – Headcount – Discretionary spend Deepened Customer Relationships Adding new customers g
Slide 22: State Street
STATE STREET. Bee) STATE STREET.