State Street Corporation · NYSE:STT
State Street — Barclays Financial Services Conference 2012
27 slides from State Street's conference presentation, Sep 11, 2012
Slide 1: Path to the Future
Exhibit 99.1 Joseph L. Hooley Chairman of the Board, President and Chief Executive Officer Edward J. Resch Chief Financial Officer Barclays Financial Services Conference September 11, 2012 Path to the Future
Slide 2: Agenda
2 Path to the Future Agenda Introduction Long-Term Goals Resilience Amid Global Headwinds Successfully Navigating Headwinds Summary
Slide 3: Forward-Looking Statements
3 Forward-Looking Statements This presentation contains f orward-looking statements as def ined by United States securities laws, including statements relating to our goals and expectations regarding our business, f inancial condition, results of operations, inv estment portf olio perf ormance and s
Slide 4: Introduction: Topics of Interest to Shareholders
4 Introduction Topics of Interest to Shareholders Return of Capital to Shareholders Impact of Proposed Basel III NPRs on Capital Acquisition Strategy
Slide 5: Long-Term Goals
5 Long-Term Goals
Slide 6: Secular Trends, Financial Goals and Strategy Remain Intact
6 Long-Term Goals Secular Trends, Financial Goals and Strategy Remain Intact 1 Financial information is presented on an operating, or non-GAAP, basis. For a description of GAAP- and operating-basis results, see the Appendix. Leverage the Power of the Core Franchise Drive New Revenue Growth Through I
Slide 7: 7 Resilience Amid Global Headwinds
7 Resilience Amid Global Headwinds
Slide 8: Current Environment
8 Resilience Amid Global Headwinds Current Environment • Eurozone debt challenges, depressed housing markets, reduced industrial production and high unemployment exacerbate global uncertainty • Subdued economic outlook is reflected in historically low interest rates in developed markets • Global hea
Slide 9: Strategy: Current Priorities
9 Strategy Current Priorities Leverage the Power of the Core Franchise • Deepen share in high-growth markets • Continue improvement in client pricing • Drive operating efficiencies through operational transformation and expense management • Execute IT transformation to enable creation of new service
Slide 10: Deepen Share of High-Growth Market Leader in Alternative Asset Servicing
10 Resilience Amid Global Headwinds Leverage the Power of the Core Franchise – Deepen Share of High-Growth Market Leader in Alternative Asset Servicing Alternative Assets Under Administration as of 12/31/111 AUA, $BN 1 ICFA Annual Fund Administration Survey 2012. 2 Completion of State Street’s acqui
Slide 11: Acquisition of Goldman Sachs Administration Services
11 Resilience Amid Global Headwinds Leverage the Power of the Core Franchise – Acquisition1 of Goldman Sachs Administration Services 1 Completion of State Street’s acquisition of GSAS, announced in July 2012, is subject to regulatory approvals and other customary closing conditions. 2 Based on HFMWe
Slide 12: Business Operations and IT Transformation Program on Track
12 Resilience Amid Global Headwinds Leverage the Power of the Core Franchise ‒ Business Operations and IT Transformation Program on Track 1 Compared to 2010 run-rate operating-basis expenses, all else being equal. The full effect of the annual pre-tax, run-rate savings is not expected to be achieved
Slide 13: Drive New Revenue Growth Through Innovation: ETFs
13 1 Based on State Street’s assets serviced compared to total market (see footnote 3). 2 Bloomberg, 6/30/12. 3 Source: McKinsey analysis, the Second Act Begins for ETFs, 2011; chart reflects lower and higher estimates. Resilience Amid Global Headwinds Drive New Revenue Growth Through Innovation: ET
Slide 14: Investment Manager Operations Outsourcing: Global Middle Office
14 Resilience Amid Global Headwinds Drive New Revenue Growth Through Innovation ‒ Investment Manager Operations Outsourcing Global Middle Office Outsourced Assets, $TN 12/31/111 $TN 1 Scrip Issue Global Report (3/2012). 2 Pw C 15th Global CEO Survey, Asset Management Industry Insights, 2012. State S
Slide 15: Optimize Capital
15 Resilience Amid Global Headwinds Optimize Capital • Return capital to shareholders in the form of dividends and share purchases – 2012 CCAR stress test: Highest tier 1 common ratio of the 19 banks tested under stress by the Federal Reserve1 – YTD: Paid two quarterly common share dividends of $0.2
Slide 16: Successfully Navigating Headwinds
16 Successfully Navigating Headwinds
Slide 17: 2012 Operating-Basis Results
17 6 MONTHS ENDED 3 MONTHS ENDED ($ in MN except per share) 6/30/12 6/30/11 Change 6/30/12 3/31/12 Change Revenue $4,829 $4,803 0.5% $2,426 $2,403 1.0% Expenses $3,527 $3,440 2.5% $1,728 $1,799 (4.0)% Earnings per share $1.85 $1.84 0.5% $1.01 $0.84 20.2% Return on equity 9.5% 10.1% (60) bps 10.3% 8.
Slide 18: 2012 Expense Management Highlights
18 Successfully Navigating Headwinds 2012 Expense Management Highlights • Business Operations and Information Technology Transformation program on track – Successful use of global locations to improve operating efficiency, enhance service and reduce cost • Headcount controlled and actively monitored
Slide 19: Balance Sheet Management Strategy
19 Successfully Navigating Headwinds Balance Sheet Management Strategy ‒ Driven by Deposits from Investment Servicing Clients Strategy Guidelines Invest in High Quality Assets • Invest through the cycle • Solid credit profile: ~90% AAA/AA rated • Diversify by asset class and geography • Construct to
Slide 20: Net Interest Margin Outlook
20 2009 – 2012 • Approximately $16BN per year of total assets (ex-US Treasuries) in the investment portfolio have matured / paid down ‒ At an average of 60% floating / 40% fixed split, an average of ~$6BN of fixed-rate securities mature / pay down per year ‒ The percentage of fixed-rate assets in th
Slide 21: Basel III Estimated Impact of SSFA Under the NPRs
21 Successfully Navigating Headwinds Basel III Estimated Impact of Simplified Supervisory Formula Approach (SSFA) Under the NPRs: Highlights1 • Proposed Basel III capital rules, expected to be fully implemented on 1/1/15, are not final and remain subject to interpretation; industry comment due by Oc
Slide 22: Basel I Tier 1 Common Ratio and Projected Basel III Ratio
22 17.9% 12.7% 11.0% 11.8% 1.7% 0% 4% 8% 12% 16% 20% Basel I T1C Ratio Basel III T1C Ratio (pre NPR) Implied NPR SSFA Impact Revised Post NPR T1C Ratio Post Run-off, Reinvestment & Impact of Planned GSAS Acquisition T1C Ratio 2 3 3 As of 6/30/12 As of 1/1/15 4 Successfully Navigating Headwinds Basel
Slide 23: Basel III Tier 1 Common Ratio, Including Estimated Impact of NPRs
23 1 Under Basel III rules effective 1/1/15, assuming the 6/30/12 balance sheet. State Street information based on State Street’s current understanding of proposed Basel III requirements and the SSFA, the rules for w hich are not f inal. Financial industry data from published company reports. See th
Slide 24: Key Takeaways
24 Successfully Navigating Headwinds Key Takeaways • Achieving solid performance amid headwinds • Managing expenses against weaker environment • Executing on Business Operations and Information Technology Transformation program • Continuing to invest through the cycle • High-quality investment portf
Slide 25: Summary
25 Summary
Slide 26: Path to the Future
26 Path to the Future Globalization Retirement Savings Regulation and Complexity Long-Term Annual Operating-Basis1 Goals: Revenue Growth 8% ‒ 12% EPS 10% ‒ 15% ROE 12% ‒ 15% 1 Financial information is presented on an operating, or non-GAAP, basis. For a description of GAAP- and operating-basis resul
Slide 27: State Street
STATE STREET
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