State Street(US:STT) The Motley Fool·2025-04-22 10:32Core Insights - State Street reported solid Q1 2025 results with fee revenue growth of 6% year-over-year, outpacing expense growth of 3% [3][4][15] - The company maintained its full-year outlook despite economic uncertainty, citing strong business momentum and a robust pipeline in investment services [3][5][26] - Non-interest-bearing deposits declined by 5%, with a noted impact of $10 million in net interest income per $1 billion shift [3][4][23] Financial Performance - Earnings per share (EPS) reached $2.04, a 21% year-over-year increase excluding notable items [4][10] - Total revenue rose by 5%, supported by a 10% increase in management fees despite $13 billion in net outflows [4][20] - New asset servicing wins totaled $182 billion in assets under custody and administration (AUCA), generating $55 million in new servicing fee revenue [4][11] Revenue Streams - FX trading revenue increased by 9% year-over-year, driven by higher client volumes [4][21] - Securities finance revenue grew by 19% year-over-year, with average assets on loan also up by 19% [4][21] - Software and processing fees rose by 9% year-over-year, with front office software revenue increasing by 10% [4][22] Expense Management - Expense growth was limited to 3% year-over-year, contributing to strong operating leverage [4][15] - The company generated approximately $90 million in savings during the quarter and continues to target $500 million in savings for the year [24] Capital Return and Outlook - State Street returned $320 million to shareholders through repurchases and dividends, expecting to return approximately 80% of earnings in 2025 [5][25] - The company anticipates total client deposits to reach the higher end of the previously guided range of $230 billion to $240 billion [5][25] - Full-year fee revenue growth is expected to be between 3% to 5%, with net interest income projected to be roughly flat [26][57]