Financial Data and Key Metrics Changes - Reported earnings per share (EPS) increased to $2.17 compared to $2.15 in the prior year period, marking an 18% year-over-year increase when excluding notable items [7][9] - Total revenue increased by 9% year-over-year, while fee revenue rose by 12%, both excluding notable items [18] - Pre-tax margin expanded to nearly 30%, and return on tangible common equity (ROTCE) was approximately 19%, excluding notable items [19] Business Line Data and Key Metrics Changes - Investment Services secured over $1 trillion in new asset servicing wins, generating $145 million in new servicing fee revenue [9][10] - Asset management business, rebranded as State Street Investment Management, achieved a record AUM exceeding $5 trillion, with quarterly net inflows over $80 billion [10][11] - FX trading revenue increased by 27% year-over-year, driven by record client volumes [24] Market Data and Key Metrics Changes - AUCA reached a record $49 trillion, up 11% year-over-year, supported by higher market levels and client flows [19] - The U.S. low-cost ETF market segment saw continued market share gains, with State Street's ETFs leading in trading volume [11][22] - Securities finance revenues increased by 17% year-over-year, reflecting strong balance growth across agency lending and prime services [25] Company Strategy and Development Direction - The company remains focused on disciplined execution of its strategy, aiming for consistent growth and operational excellence [6][14] - The rebranding of the asset management business reflects a commitment to innovation and deepening client relationships [10] - The next generation of the operating model transformation is a priority, with a focus on operational efficiency and productivity gains supported by AI [14][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged significant financial market volatility due to geopolitical and economic uncertainty but highlighted strong business momentum and financial performance [5][6] - The company expects total fee revenue growth for 2025 to be in the range of 5% to 7%, an improvement from the previous outlook of 3% to 5% [32] - Management remains committed to returning capital to shareholders, with plans to increase the quarterly dividend by 11% [13][31] Other Important Information - Notable items totaled $138 million pretax, primarily due to a repositioning charge associated with the operating model transformation [17] - The company generated over $1 billion in expense savings over the last three years, with expectations to increase that to over $1.5 billion by year-end 2025 [13][29] Q&A Session Summary Question: Inquiry on fees and fee operating leverage - Management indicated that the pace of sales remains strong, with a target of $350 million to $400 million in servicing fees for the year, supported by a record level of fees to be installed [35][36][38] Question: Clarification on new wins and client rescoping - Management does not anticipate further issues related to client rescoping and emphasized the importance of back-office elements in new mandates [39][40][42] Question: Discussion on net interest income (NII) and its outlook - Management confirmed guidance for NII to remain roughly flat year-over-year, acknowledging variability due to factors like deposit mix and interest rates [45][49][54] Question: Thoughts on M&A activity in the industry - Management expressed confidence in organic growth capabilities but remains open to M&A as a complement to strategy, emphasizing a high bar for any potential acquisitions [56][58] Question: Insights on asset management business and net inflows - Management noted consistent organic growth in the institutional channel, driven by innovative products and strong relationships with investment consultants [62][64] Question: Regulatory environment and tier one leverage ratio - Management acknowledged the current constraints of the tier one leverage ratio but indicated a constructive environment for potential regulatory changes in the future [67][68]