On July 16, 2024, State Street Corporation (STT, Financial) released its 8-K filing detailing its financial performance for the second quarter of 2024. State Street is a leading provider of financial services, including investment servicing, investment management, and investment research and trading. The company operates globally in more than 100 geographic markets and employs over 46,000 people worldwide. As of December 31, 2023, State Street had approximately $42 trillion in assets under custody and administration and $4.1 trillion in assets under management.
Key Financial Achievements
State Street Corporation reported a diluted earnings per share (EPS) of $2.15 for Q2 2024, a slight decrease from $2.17 in Q2 2023 but a significant increase from $1.37 in Q1 2024. The company's total revenue for the quarter was $3.191 billion, up 3% year-over-year and 2% quarter-over-quarter. Net interest income grew by 6% year-over-year to $735 million, while fee revenue increased by 2% to $2.456 billion.
Performance and Challenges
State Street's performance in Q2 2024 was marked by record levels of assets under custody and administration (AUC/A) at $44.3 trillion and assets under management (AUM) at $4.4 trillion. The company also reported new investment servicing AUC/A wins of $291 billion. Despite these achievements, the company faced challenges such as a notable episodic revenue headwind within servicing fees.
Ron O'Hanley, Chairman and Chief Executive Officer, stated, "We delivered encouraging financial performance in the second quarter, with continued year-over-year revenue growth and well-controlled expenses resulting in an ROE of nearly 12%."
Income Statement Highlights
| Metric | 2Q24 | 1Q24 | 2Q23 | % QoQ | % YoY |
|---|---|---|---|---|---|
| Total Fee Revenue ($ millions) | 2,456 | 2,422 | 2,419 | 1% | 2% |
| Net Interest Income ($ millions) | 735 | 716 | 691 | 3% | 6% |
| Total Revenue ($ millions) | 3,191 | 3,138 | 3,110 | 2% | 3% |
| Net Income ($ millions) | 711 | 463 | 763 | 54% | -7% |
| Diluted EPS | $2.15 | $1.37 | $2.17 | 57% | -1% |
Balance Sheet and Cash Flow
State Street's balance sheet remains robust, with a standardized common equity tier 1 (CET1) ratio of 11.2% at the end of Q2 2024. The company returned $407 million of capital to shareholders during the quarter, including $200 million in common share repurchases and $207 million in declared common stock dividends. The liquidity coverage ratio (LCR) for State Street Corporation was approximately 106%, and for State Street Bank and Trust, it was approximately 134%.
Analysis and Outlook
State Street Corporation's Q2 2024 performance underscores its resilience and strategic focus on productivity improvements and client experience enhancements. The company's ability to achieve revenue growth and maintain strong financial ratios despite market challenges is noteworthy. However, the slight decline in EPS year-over-year and the episodic revenue headwinds within servicing fees highlight areas that may require ongoing attention.
For more detailed insights and to access the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from State Street Corporation for further details.
