State Street (STT) Q3 2024 earnings summary

Executive summary

• Achieved record diluted EPS of $2.26 in Q3 2024, up 81% year-over-year, with 17% adjusted earnings growth and ROE of 12%.

• Total revenue rose 21% year-over-year to $3.26B, with fee revenue up 11% and NII up 16%, driven by broad-based franchise strength.

• Record AUC/A of $46.8T and AUM of $4.7T at quarter-end, with $100B in net inflows and $466B in new AUC/A wins.

• Returned $674M to shareholders, including $450M in share repurchases and $224M in dividends, achieving a near 100% payout ratio.

• Expanded market share in key products and geographies, launched 20 new ETFs, and announced a partnership with Apollo Global Management.

Financial highlights

• Net income rose 73% year-over-year to $730M; diluted EPS up to $2.26 from $1.25.

• Servicing fees increased 3%, management fees up 10%, and FX trading revenue up 15-19% year-over-year.

• Total expenses rose 6% year-over-year to $2.31B, mainly from higher compensation and business investments.

• Pre-tax margin improved to 28.4%, with ROE at 12% and ROTCE at 19.3%.

• Net interest margin (FTE) was 1.07% in Q3 2024.

Outlook and guidance

• Full-year total fee revenue and NII expected at or above the high end of the 4-5% growth range.

• Expenses for 2024 expected to rise 3.5%, slightly higher due to revenue-related costs.

• Full-year payout ratio anticipated in the 80%-90% range, with Q4 capital return expected to exceed Q3.

• CET1 and Tier 1 leverage ratios expected to remain within or above target ranges, considering planned capital distributions.

• Focus remains on delivering positive operating leverage and ongoing transformation.