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State Street(STT) - 2025 Q1 - Quarterly Report
STTState Street(STT)2025-05-01 12:06
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Financial Performance - Total revenue for Q1 2025 was 3,284million,a53,284 million, a 5% increase compared to 3,138 million in Q1 2024[39]. - Total fee revenue increased by 6% to 2,570millioninQ12025,drivenbyhighermanagementfeesandservicingfees[49].−Netincomeavailabletocommonshareholdersrose432,570 million in Q1 2025, driven by higher management fees and servicing fees[49]. - Net income available to common shareholders rose 43% to 597 million in Q1 2025, compared to 418millioninQ12024[39].−Earningspershare(EPS)increasedby49418 million in Q1 2024[39]. - Earnings per share (EPS) increased by 49% to 2.04 in Q1 2025, primarily due to higher total revenue and lower total expenses[41]. - Total expenses decreased by 3% to 2,450millioninQ12025,reflectingtheabsenceofaprior−yearnotableitem[39].−Returnonaveragecommonequityimprovedto10.62,450 million in Q1 2025, reflecting the absence of a prior-year notable item[39]. - Return on average common equity improved to 10.6% in Q1 2025, up from 7.7% in Q1 2024[41]. Assets and Management - As of March 31, 2025, State Street Corporation reported total assets of 372.69 billion and total deposits of 272.06billion[12].−Thecompanymanages272.06 billion[12]. - The company manages 46.73 trillion in assets under custody/administration (AUC/A) and 4.67trillioninassetsundermanagement(AUM)asofMarch31,2025[11].−Totalassetsundercustodyand/oradministration(AUC/A)reached4.67 trillion in assets under management (AUM) as of March 31, 2025[11]. - Total assets under custody and/or administration (AUC/A) reached 46.733 trillion as of March 31, 2025, up from 46.557trillionasofDecember31,2024[73].−Assetsundermanagement(AUM)increasedby946.557 trillion as of December 31, 2024[73]. - Assets under management (AUM) increased by 9% to 4.67 trillion as of March 31, 2025[49]. - Total fixed-income AUM increased to 633billionasofMarch31,2025,from633 billion as of March 31, 2025, from 616 billion as of December 31, 2024[82]. Revenue Sources - Servicing fee revenue increased by 4% in Q1 2025 compared to Q1 2024, driven by higher average market levels and client activity, with approximately 47% of total servicing fees generated outside the United States[55]. - Management fee revenue increased by 10% in Q1 2025 compared to Q1 2024, primarily due to higher average market levels and net inflows from prior periods[76]. - Foreign exchange trading services revenue increased by 9% in Q1 2025 compared to Q1 2024, driven by higher client volumes[89]. - Securities finance revenue rose by 19% in Q1 2025 compared to Q1 2024, mainly due to higher client lending balances[93]. - Software and processing fees revenue increased by 9% in Q1 2025 compared to Q1 2024, primarily due to higher front office software and data revenue[96]. Capital and Liquidity - The CET1 capital ratio rose to 11.0% as of March 31, 2025, from 10.9% as of December 31, 2024, while the Tier 1 leverage ratio increased to 5.5% from 5.2%[56]. - The company expects its CET1 capital ratio and Tier 1 leverage ratio to remain within target ranges of 10-11% and 5.25-5.75%, respectively[56]. - The average daily Liquidity Coverage Ratio (LCR) for the Parent Company was 106% for the quarter ended March 31, 2025, compared to 107% for the quarter ended December 31, 2024[194]. - The average High-Quality Liquid Assets (HQLA) for the Parent Company was 148.04billionforthequarterendedMarch31,2025,upfrom148.04 billion for the quarter ended March 31, 2025, up from 142.34 billion for the quarter ended December 31, 2024[195]. - The company maintained an NSFR above the 100% minimum requirement as of March 31, 2025[196]. Employee and Operational Metrics - Consolidated total shareholders' equity stood at 26.69billion,withapproximately53,000employees[12].−Thenumberofemployeesincreasedby1526.69 billion, with approximately 53,000 employees[12]. - The number of employees increased by 15% to 52,711 as of March 31, 2025, compared to 45,871 in the same period of 2024[130]. - Compensation and employee benefits increased by 1% to 1,262 million in Q1 2025, primarily due to higher performance-based incentives[129]. - Information systems and communications expenses rose by 15% to 497millioninQ12025,drivenbyhighertechnologyinvestments[131].RiskandCompetition−Thecompanyfacesintensecompetition,whichcouldnegativelyimpactprofitabilityandleadtosignificantpricingpressure[29].−Thecompanyissubjecttovariousrisks,includingfinancialmarketrisks,operationalrisks,andcomplianceandregulatoryrisks[30][31].−Management′sexpectationsregardingbusinessgrowthandfinancialconditionareinfluencedbygeopoliticalandeconomicfactors[26].CreditQualityandProvisions−Theprovisionforcreditlosseswas497 million in Q1 2025, driven by higher technology investments[131]. Risk and Competition - The company faces intense competition, which could negatively impact profitability and lead to significant pricing pressure[29]. - The company is subject to various risks, including financial market risks, operational risks, and compliance and regulatory risks[30][31]. - Management's expectations regarding business growth and financial condition are influenced by geopolitical and economic factors[26]. Credit Quality and Provisions - The provision for credit losses was 12 million in Q1 2025, down from 27millioninQ12024,indicatingimprovedcreditquality[45].−Provisionforcreditlossesdecreasedby5627 million in Q1 2024, indicating improved credit quality[45]. - Provision for credit losses decreased by 56% to 12 million in Q1 2025 from 27millioninQ12024[141].−Theallowanceforcreditlossesincreasedto27 million in Q1 2024[141]. - The allowance for credit losses increased to 186 million as of March 31, 2025, compared to 146millionasofMarch31,2024,reflectingayear−over−yearincreaseof27.4146 million as of March 31, 2024, reflecting a year-over-year increase of 27.4%[178]. - The charge-offs for the first quarter of 2025 were 9 million, primarily related to leveraged loans[179]. Investment Portfolio - As of March 31, 2025, the total carrying value of available-for-sale securities increased to 67.444billionfrom67.444 billion from 58.895 billion as of December 31, 2024, representing a growth of approximately 14.5%[153]. - The total carrying value of held-to-maturity securities decreased to 45.505billionasofMarch31,2025,downfrom45.505 billion as of March 31, 2025, down from 47.727 billion as of December 31, 2024, reflecting a decline of about 4.6%[153]. - Approximately 97% of the carrying value of the investment securities portfolio was rated "AA" or higher as of both March 31, 2025, and December 31, 2024[156]. - The investment portfolio's asset class composition as of March 31, 2025, included 34% U.S. Agency Mortgage-backed securities and 28% U.S. Treasuries[157].