PresentationAlexander BlosteinGoldman Sachs Group, Inc., Research Division Great. Good morning. Thank you for joining us. For our next session, I'd like to welcome John Woods, State Street's recently appointed CFO. State Street is one of the largest global asset servicing and asset management firms with around $52 trillion in assets under custody and administration and $5.5 trillion in assets under management. Over the course of 2025, State Street saw a nice boost in servicing fee growth with positive sales ...

Summary of State Street's Conference Call Company Overview - **Company**: State Street - **Industry**: Asset servicing and asset management - **Assets**: Approximately $52 trillion in assets under custody and administration, and $5.5 trillion in assets under management [1][1] Key Points and Arguments 2026 Strategic Priorities - **Financial Delivery**: Emphasis on meeting financial commitments and expectations [3][3] - **Balance Sheet Optimization**: Focus on improving efficiency and growing Net Interest Income (NII) over time [4][4] - **Expense Management**: Continued efforts to manage expenses and enhance productivity [5][5] - **Partnerships**: Collaborating with business leaders to drive strategic initiatives [5][5] Fee Revenue and Sales Momentum - **Investment Servicing Growth**: Anticipated fee growth of $350-$400 million, with a strong sales momentum [7][7] - **Backlog Quality**: Improvement in the backlog, particularly in back office and private markets, which are expected to drive future growth [11][11] Private Markets - **Growth Area**: Significant focus on private markets, with expectations of double-digit growth in fees for 2026 [13][13][14][14] - **Competitive Advantage**: State Street's global platform and capabilities provide a competitive edge in the fragmented private market space [13][13] Wealth Servicing - **Strategic Partnerships**: Recent partnerships with UC Investments and Apex Fintech Solutions to enhance wealth servicing capabilities [15][15][18][18] - **Market Opportunity**: Positioned to capture growth from the demographic shift and wealth transfer from Baby Boomers [16][16] Digital Assets - **Digital Asset Platform**: Launching a digital asset platform imminently, with plans to introduce tokenized products, starting with a tokenized money market fund [20][20][21][21] - **Future Opportunities**: Exploring the potential for custody of stablecoins and tokenization of traditional assets [22][22][24][24] Investment Management - **Growth Contributors**: Focus on ETFs, geographic expansion, and partnerships with alternative asset managers [28][28][30][30] - **Private Market Initiatives**: Launching new products in collaboration with Apollo and Bridgewater, and focusing on the secondary market with Coller [32][32][34][34] Financial Performance and Outlook - **Q4 Expectations**: Anticipated fee revenue to be at the upper end of the 8.5%-9% range, with NII expected to be flat to slightly up [36][36][38][38] - **Expense Management**: Projected expenses to approach 5%, with notable items around $275 million for the quarter [39][39][41][41] - **Capital Returns**: Expecting around 80% capital return in 2025, with a focus on dividends, organic growth, and strategic investments [57][57][59][59] Balance Sheet and NII Strategy - **Balance Sheet Optimization**: Focus on deploying capital into strong customer relationships and improving risk-adjusted returns [46][46][48][48] - **Funding Mix**: Evaluating the mix of deposits and wholesale funding to enhance NII [51][51][53][53] Conclusion - **Long-term Growth Outlook**: State Street is well-positioned for growth in various segments, including private markets, wealth servicing, and digital assets, with a strong focus on operational efficiency and strategic partnerships [63][63]