Dynamix Corporation III raises $201.25 million in IPO
Investing.com -- State Street Corporation (NYSE:STT) reported third-quarter earnings that exceeded analyst expectations on Thursday, as the financial services company delivered broad-based fee revenue growth across its business segments. The stock fell around 2.7% following the announcement.
The Boston-based custody bank and asset manager posted adjusted earnings per share of $2.78, surpassing the analyst consensus of $2.63 by 15 cents. Total revenue climbed to $3.55 billion, up 9% YoY and above the $3.46 billion analyst estimate. This marked State Street’s seventh consecutive quarter of positive operating leverage.
Fee revenue increased 8% YoY to $2.83 billion, driven by strength across multiple business lines. Management fees rose 16% to $612 million, while servicing fees grew 7.2% to $1.36 billion, primarily due to higher market levels and new business. Foreign exchange trading services increased 11.2% to $416 million, and securities finance jumped 19% to $138 million.
"Our third-quarter financial results reflect strong performance, driven by disciplined execution against our strategic priorities," said Ron O’Hanley, Chairman and CEO. "We delivered 9% year-over-year total revenue growth, supported by broad-based fee revenue increases across the franchise."
Assets under custody and/or administration (AUC/A) reached a record $51.7 trillion, up 10% from the year-ago period, while assets under management (AUM) grew 15% to a record $5.4 trillion. Both increases were primarily attributed to higher market levels and net inflows.
Net interest income decreased slightly by 1.1% to $715 million compared to the same quarter last year, primarily due to lower average short-term rates and deposit mix shifts, partially offset by securities portfolio repricing and continued loan growth.
State Street returned $637 million to shareholders during the quarter through $400 million in share repurchases and $237 million in dividends. The company recently increased its quarterly dividend by 11% to $0.84 per share.