State Street(STT)2024-10-31 12:01Financial Performance - Total revenue for Q3 2024 was $3,259 million, an increase of 21% compared to $2,691 million in Q3 2023[14]. - Net income for Q3 2024 reached $730 million, up 73% from $422 million in Q3 2023[14]. - Earnings per share (EPS) for Q3 2024 was $2.26, reflecting an 81% increase from $1.25 in Q3 2023[16]. - Total expenses increased by 6% in Q3 2024, amounting to $2,308 million compared to $2,180 million in Q3 2023[14]. - The pre-tax margin improved to 28.4% in Q3 2024, up from 19.0% in the same period of 2023[16]. - Return on average common equity was 12.0% in Q3 2024, significantly higher than 7.3% in Q3 2023[16]. - Total fee revenue for Q3 2024 was $2,616 million, an 11% increase from $2,361 million in Q3 2023[14]. - Net interest income (NII) rose by 16% to $723 million in Q3 2024, compared to $624 million in Q3 2023[14]. - The provision for credit losses was $26 million in Q3 2024, compared to no provision in Q3 2023[14]. - Cash dividends declared per common share increased by 10% to $0.76 in Q3 2024, up from $0.69 in Q3 2023[14]. Assets and Deposits - As of September 30, 2024, State Street Corporation reported total assets of $338.48 billion, total deposits of $247.43 billion, and total shareholders' equity of $25.83 billion[5]. - The company manages $46.76 trillion in assets under custody/administration (AUC/A) and $4.73 trillion in assets under management (AUM) as of the same date[5]. - AUC/A reached $46.76 trillion as of September 30, 2024, a 17% increase compared to September 30, 2023, driven by higher market levels and client flows[18]. - AUM totaled $4.7 trillion as of September 30, 2024, reflecting a 29% increase year-over-year due to higher market levels and net inflows[18]. - Total assets reached $338,481 million as of September 30, 2024, up from $297,258 million at the end of 2023, indicating a growth of 13.9%[132]. - Total deposits increased to $247,429 million, compared to $220,970 million in December 2023, marking a rise of 11.9%[132]. Business Segments - State Street's operations are divided into two main lines of business: Investment Servicing and Investment Management, which provide a broad range of financial products and services to institutional investors[5]. - Total revenue for the Investment Servicing line of business in Q3 2024 was $2,662 million, an 8% increase from $2,459 million in Q3 2023[56]. - Investment Management total revenue increased by 13% in Q3 2024 to $1,715 million from $1,534 million in Q3 2023[61]. - Management fees in Q3 2024 were $527 million, a 10% increase from $479 million in Q3 2023[58]. Competition and Market Conditions - State Street faces intense competition and significant pricing pressure, which could negatively impact profitability and financial results[9]. - The company’s financial performance is influenced by external factors such as geopolitical conditions, market volatility, and actions taken by central banks[11]. - The company emphasizes the importance of attracting and retaining skilled workforce members to support its business operations amid intense competition for talent[9]. Risk Management - The company’s risk management framework may not effectively identify or mitigate risks, potentially leading to financial losses[13]. - The company faces significant global operational risks due to disruptions in key economies, which could adversely impact its financial condition and results of operations[12]. - The company conducts annual stress tests under the Dodd-Frank Act to assess its capital and financial condition, with results available on its investor relations website[6]. - The company may incur losses due to unforeseen events such as natural disasters, pandemics, and geopolitical conflicts[13]. Capital and Funding - The company may need to raise additional capital or debt in the future, which may not be available or may be available only on unfavorable terms[13]. - The standardized CET1 capital ratio was 11.6% as of September 30, 2024, unchanged from December 31, 2023[18]. - The company declared common stock dividends of $0.76 per share in the third quarter of 2024, representing a 10% increase from $0.69 per share in the same period of 2023[18]. - The company returned a total of $674 million to shareholders in the form of common share repurchases and dividends in the third quarter of 2024[18]. Regulatory Environment - The evolving regulatory environment may influence the volume of securities lending activity and related revenue and profitability in future periods[37]. - The company is subject to a "capital floor" under the Dodd-Frank Act, ensuring that risk-based capital ratios are the lower of those calculated under advanced or standardized approaches[104]. - The company maintains a G-SIB designation, requiring an additional capital surcharge above minimum capital ratios set forth in Basel III[103]. Investment Securities - As of September 30, 2024, the total carrying value of available-for-sale securities was $56.85 billion, an increase from $44.53 billion as of December 31, 2023, representing a growth of approximately 27%[65]. - The total carrying value of held-to-maturity securities decreased to $49.48 billion as of September 30, 2024, down from $57.12 billion as of December 31, 2023, reflecting a decline of about 13%[65]. - Approximately 97% of the carrying value of the investment securities portfolio was rated "AA" or higher as of September 30, 2024, compared to 96% as of December 31, 2023[66]. Loans and Credit Losses - Total loans increased to $41.96 billion as of September 30, 2024, up from $36.63 billion as of December 31, 2023[75]. - The allowance for credit losses increased to $171 million as of September 30, 2024, compared to $134 million as of December 31, 2023, primarily due to provisions related to commercial real estate and leveraged loans[77]. - The provision for credit losses for the nine months ended September 30, 2024, was $69 million, compared to $35 million for the same period in 2023[77]. Shareholder Actions - The company repurchased $450 million of common stock in Q3 2024 and a total of $750 million during the nine months ended September 30, 2024, under its new $5.0 billion share repurchase program[122]. - The dividends declared on common stock for Q3 2024 were $0.76 per share, totaling $224 million, compared to $0.69 per share and $213 million in Q3 2023[124]. - For the nine months ended September 30, 2024, the total dividends declared on common stock were $2.14 per share, totaling $639 million, compared to $1.95 per share and $628 million in the same period of 2023[124].