State Street Tops Q3 Estimates on Fee Growth as Shares Drop

Shares fell after the report due to rising costs, slightly lower net interest income, plus a year-over-year dip in CET1.

Overview

Adjusted EPS came in at $2.78 on revenue of $3.545 billion, beating consensus and rising 9% year over year.
Fee revenue increased 8% year over year, with management fees up 16%, servicing fees up 7%, FX trading up 11%, securities finance up 19%, and software and processing up 9%.
Investment Management AUM reached $5.4 trillion, up about 15% year over year, while assets under custody and administration rose to $51.66 trillion.
Net interest income slipped 1% to $715 million as deposit mix and lower short-end rates weighed on results, while expenses rose 5% on technology investments, revenue-related costs, and currency effects.
The company returned $637 million to shareholders via $400 million in buybacks and $237 million in dividends, ending the quarter with a CET1 ratio of 11.3%, down 30 bps from a year earlier but up 60 bps sequentially.