STATE STREET CORP
For the period ended Dec 31, 2024. Filed Feb 13, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 13, 2025
STT$165.56+0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-15.
0000093751-24-000498
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-13.
0000093751-25-000111
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 831 previous paragraphs and 824 current paragraphs.
533 unchanged; 203 reworded; 71 added; 81 removed; 14 previous and 17 current paragraphs rearranged.
Tables are not compared: 49 previous and 49 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (71)
Current report
•EPS of $8.21, increased from $5.58 in 2023, primarily reflecting higher total revenue and lower total expenses, including the net impact of notable items in the current and prior year periods, which in aggregate represented $1.62 of the EPS increase. See “Notable Items” below.
Current report
•Total revenue increased 9% compared to 2023, primarily driven by higher fee revenue and NII and the impact of the loss on sale of investment securities notable item in the prior year period. The prior year notable item represented 3% points of the increase.
Current report
•Total expenses decreased 1% compared to 2023 as higher business investments, as well as revenue and performance-related costs, were more than offset by productivity savings from organizational simplification, process improvements and other initiatives, including from the joint venture consolidations in India and the net impact of notable items. The net impact of notable items in the current and prior year periods decreased expenses by 5% points in 2024 as compared to 2023.
Current report
•Pre-tax margin of 26.1% increased from 19.4% in 2023, primarily reflecting higher total revenue and lower total expenses. Return on equity of 11.1% increased from 8.2% in 2023, primarily reflecting higher total revenue and lower total expenses.
Current report
◦Other expenses of $111 million, including a $99 million increase to the 2023 FDIC special assessment, and a $12 million charge associated with operating model changes.
Current report
◦Loss on sale of investment securities of $81 million related to an investment portfolio repositioning reflected in other income.
Current report
◦Deferred compensation expense acceleration of approximately $79 million, related to prior period incentive compensation awards to align our deferred pay mix with peers.
Current report
◦Gain on sale of an equity investment of $66 million recorded in other fee revenue.
Current report
◦Net repositioning release of $2 million, including a $15 million release reflected in compensation and employee benefits expenses, partially offset by $13 million of occupancy charges related to footprint optimization.
Current report
•Total fee revenue increased 7% compared to 2023, primarily reflecting higher management fees, foreign exchange trading services revenue, other fee revenue and servicing fees.
Current report
•Servicing fee revenue increased 2% compared to 2023, as higher average market levels and net new business, excluding a previously disclosed client transition, were partially offset by pricing headwinds, a previously disclosed client transition and lower client activity and adjustments, including asset mix shift.
Current report
•Management fee revenue increased 13% compared to 2023, primarily due to higher average market levels and net inflows.
Current report
•Foreign exchange trading services revenue increased 11% compared to 2023, primarily due to higher client volumes, partially offset by lower spreads associated with lower average FX volatility.
Current report
•Securities finance revenue increased 3% compared to 2023, mainly due to higher client lending balances, partially offset by lower spreads primarily resulting from muted industry specials activity.
Current report
•Other fee revenue increased $109 million compared to 2023, primarily reflecting a $66 million gain on sale of an equity investment and the absence of the impact of the Argentine peso devaluation in the prior year period.
Current report
•In 2024, we recorded a $75 million provision for credit losses, primarily reflecting an increase in loan loss reserves associated with certain commercial real estate and leveraged loans, compared to $46 million in 2023.
Current report
•Total expenses decreased 1% compared to 2023, as higher business investments, as well as revenue and performance-related costs, were more than offset by productivity savings from organizational simplification, process improvements and other initiatives, including from the joint venture consolidations in India and the net impact of notable items. The net impact of notable items in the current and prior year periods decreased expenses by 5% points in 2024 as compared to 2023.
Current report
•On January 31, 2024, we issued 1.5 million depositary shares, each representing a 1/100th ownership interest in a share of fixed rate reset, non-cumulative perpetual preferred stock, Series I, without par value per share, with a liquidation preference of $100,000 per share (equivalent to $1,000 per depositary share), and an initial dividend rate of 6.700% per annual, in a public offering. The net proceeds from the offering were approximately $1.5 billion.
Current report
•On July 24, 2024, we issued 850,000 depositary shares, each representing a 1/100th ownership interest in a share of fixed rate reset, non-cumulative perpetual preferred stock, Series J, without par value per share, with a liquidation preference of $100,000 per share (equivalent to $1,000 per depositary share), in a public offering. The net proceeds from the offering were approximately $842 million.
Current report
•On September 16, 2024, we redeemed an aggregate $500 million, or all 5,000 outstanding shares, of our non-cumulative perpetual preferred stock, Series H (represented by 500,000 depository shares), for a cash redemption price of $100,000 per share (equivalent to $1,000 per depository share), plus all declared and unpaid dividends.
Current report
•On February 6, 2025, we issued 750,000 depositary shares, each representing a 1/100th ownership interest in a share of fixed rate reset, non-cumulative perpetual preferred stock, Series K, without par value per share, with a liquidation preference of $100,000 per share (equivalent to $1,000 per depositary share), in a public offering. The net proceeds from the offering were approximately $743 million.
Current report
•On March 18, 2024, we issued $1 billion aggregate principal amount of 4.993% fixed rate senior notes due 2027.
Current report
•On August 20, 2024, we issued $1 billion aggregate principal amount of 4.530% fixed-to-floating rate senior notes due 2029.
Current report
•On November 1, 2024, we redeemed $1 billion aggregate principal amount of 2.354% fixed-to-floating rate senior notes due 2025.
Current report
•On November 25, 2024, State Street Bank issued $300 million aggregate principal amount of floating rate senior notes due 2026, $1.15 billion aggregate principal amount of 4.594% fixed rate senior notes due 2026 and $800 million aggregate principal
Current report
amount of 4.782% fixed rate senior notes due 2029.
Current report
•On February 6, 2025, we redeemed $300 million aggregate principal amount of 1.746% fixed-to-floating rate senior notes due 2026.
Current report
Management fees increased 13% in 2024 compared to 2023, primarily due to higher average market levels and net inflows.
Current report
(3) AUM for passive alternative investments has been revised from prior presentations.
Current report
(2) AUM for passive alternative investments has been revised from prior presentations.
Current report
(3) AUM for passive alternative investments has been revised from prior presentations.
Current report
Securities finance revenue, as presented in Table 2: Total Revenue, increased 3% in 2024 compared to 2023, mainly due to higher client lending balances, partially offset by lower spreads primarily resulting from muted industry specials activity.
Current report
Other fee revenue increased $109 million in 2024, compared to 2023, primarily reflecting a $66 million gain on sale of an equity investment and the absence of the impact of the Argentine peso devaluation in the prior year period.
Current report
(2) Reflects the impact of balance sheet netting under enforceable netting agreements of approximately$191.26 billion, $140.36 billion and $71.02 billion for the years ended December 31, 2024, 2023 and 2022, respectively. Excluding the impact of netting, the average interest rates would be approximately 0.46%, 0.22% and 0.26% for the years ended December 31, 2024, 2023 and 2022, respectively.
Current report
(3)Reflects the impact of balance sheet netting under enforceable netting agreements of approximately$6.96 billion, $4.94 billion and $5.39 billion for the years ended December 31, 2024, 2023 and 2022, respectively. Excluding the impact of netting, the average interest rates would be approximately 6.69%, 3.61% and 1.46% for the years ended December 31, 2024, 2023 and 2022, respectively.
Current report
(5) Total deposits averaged $225.61 billion, $205.11 billion and $222.87 billion for the years ended December 31, 2024, 2023 and 2022, respectively.
Current report
(6) Reflects the impact of balance sheet netting under enforceable netting agreements of approximately$6.30 billion, $4.67 billion and $4.59 billion for the years ended December 31, 2024, 2023 and 2022, respectively. Excluding the impact of netting, the average interest rates would be approximately 7.30%,5.43% and 2.20% for the years ended December 31, 2024, 2023 and 2022, respectively.
Current report
Average investment securities were$104.78 billion in 2024 compared to $105.77 billion in 2023. While the overall size of the portfolio was relatively flat in 2024 compared to 2023, it included higher U.S. Treasury securities, offset by lower mortgage-backed and non-U.S. sovereign and supranational securities.
Current report
Average other short-term borrowings increased to $11.43 billion in 2024 from $1.12 billion in 2023, due to increased wholesale funding. The increase is driven by our effort to diversify our funding sources through relatively low-cost channels, to further support business growth.
Current report
In 2024, we recorded a$75 million provision for credit losses, primarily reflecting an increase in loan loss reserves associated with certain commercial real
Showing the first 40 of 71 passages. Open the source sections for the rest.
Removed paragraphs (81)
Previous report
•EPS of $5.58, decreased 22% compared to 2022, primarily reflecting the impact of the following notable items which, in aggregate, decreased EPS by $2.08 in 2023:
Previous report
◦Net repositioning charges of approximately $203 million; and
Previous report
•Total revenue decreased 2% compared to 2022. The effects of the 2023 loss on sale of investment securities notable item and lower fee revenue were partially offset by higher NII.
Previous report
•Total expenses increased 9% compared to 2022, primarily reflecting the impact of 2023 notable items, higher salaries and continued business investments, partially offset by productivity savings.
Previous report
•Return on equity of 8.2% decreased from 11.1% in 2022, primarily due to the impact of the 2023 notable items. Pre-tax margin of 19.4% decreased from 27.4% in 2022, primarily due to the impact of 2023 notable items.
Previous report
•Total fee revenue decreased 1% compared to 2022, reflecting lower servicing fees, management fees, and FX trading services revenue, partially offset by higher other fee revenue and software and processing fees.
Previous report
•Servicing fee revenue decreased 3% compared to 2022, primarily driven by lower client activity and adjustments, normal pricing headwinds, lower average fixed income markets and a previously disclosed client transition, partially offset by higher average equity market levels and net new business.
Previous report
•Management fee revenue decreased 3% compared to 2022, as the previously disclosed shift of certain management fees into NII, client insourcing and the impacts of a strategic ETF product suite repricing initiative were partially offset by higher average equity market levels.
Previous report
•Foreign exchange trading services revenue decreased 8% compared to 2022, primarily reflecting lower direct FX spreads, a decline in market volatility and lower client FX volumes.
Previous report
•Securities finance revenue increased 2% compared to 2022, as higher prime services revenue and higher agency spreads were partially offset by lower agency balances.
Previous report
•Other fee revenue increased $181 million compared to 2022, primarily due to a previously disclosed tax credit investment accounting change and the positive impact of market-related adjustments, partially offset by lower fair value adjustments on equity investments and the impact of the Argentine peso devaluation.
Previous report
•Other income reflects a loss on sale of AFS securities recorded in the third quarter of
Previous report
2023 of approximately $294 million, related to the investment portfolio repositioning, which benefited NII in the fourth quarter of 2023 and which we expect to benefit NII in future periods.
Previous report
•In 2023, we recorded a $46 million provision for credit losses, compared to $20 million in 2022, primarily reflecting an increase in loan loss reserves associated with commercial real estate.
Previous report
•Total expenses increased 9% compared to 2022, primarily reflecting the impact of 2023 notable items, higher salaries and continued business investments, partially offset by productivity savings.
Previous report
◦Repositioning charges of approximately $78 million, consisting of $50 million of compensation and benefits expenses primarily related to streamlining the Investment Services organization, $20 million of occupancy charges related to real estate footprint optimization and $8 million of BBH-related repositioning charges; and
Previous report
◦Acquisition and restructuring costs of approximately $65 million related to the BBH Investor Services acquisition transaction that we are no longer pursuing.
Previous report
◦In January 2024, our Board approved a share repurchase program and superseding all prior programs, authorizing the purchase of up to $5.0 billion of our common stock beginning in the first quarter of 2024. This new program has no set expiration date and is not expected to be executed in full during 2024.
Previous report
•On January 26, 2023, we issued $500 million aggregate principal amount of 4.857% fixed-to-floating rate senior notes due 2026 and $750 million aggregate principal amount of 4.821% fixed-to-floating rate senior notes due 2034.
Previous report
•On May 18, 2023, we issued $1 billion aggregate principal amount of 5.104% fixed-to-floating rate senior notes due 2026 and $1 billion aggregate principal amount of 5.159% fixed-to-floating rate senior notes due 2034.
Previous report
•On November 21, 2023, we issued $1 billion aggregate principal amount of 5.684% fixed-to-floating rate senior notes due 2029 and $500 million aggregate principal amount of 6.123% fixed-to-floating rate senior subordinated notes due 2034.
Previous report
(1) In the first quarter of 2022, we reclassified certain fee revenue in our Consolidated Statement of Operations, primarily moving revenues that are not directly associated with software and processing fees to a new Other fee revenue line item. In addition, we provided a disaggregation of servicing fees into Back office services and Middle office services and of software and processing fees into Front office software and data and Lending related and other fees. Prior periods have been revised to reflect these changes.
Previous report
Management fees decreased 3% in 2023 compared to 2022, as the previously disclosed shift of certain management fees into NII, client insourcing and the impacts of a strategic ETF product suite repricing initiative were partially offset by higher average equity market levels.
Previous report
(1) The implementation of an improved internal data management system for product level data in the first quarter of 2021 resulted in some AUM reclassifications between the categories presented for prior periods to align with the current presentation. There was no impact to the total level of reported AUM.
Previous report
Securities finance revenue, as presented in Table 2: Total Revenue, increased 2% in 2023 compared to 2022, as higher prime services revenue and higher agency spreads were partially offset by lower agency balances.
Previous report
Other fee revenue increased $181 million in 2023, compared to 2022, primarily driven by a previously disclosed tax credit investment accounting change and the positive impact of market-related adjustments, partially offset by lower fair value adjustments on equity investments and the impact of the Argentine peso devaluation. For further information on the tax credit investment accounting change, please refer to Note 1 to the consolidated financial statements in this Form 10-K.
Previous report
Investment securities' net purchase premium amortization, which is included in interest income, was $3 million in 2023, compared to $225 million in 2022 and $556 million in 2021. The decrease in net purchase premium amortization in 2023, as compared to 2022, was primarily driven by a shift in the non-MBS portfolio from a net unamortized purchase premium as of December 31, 2022 to a net unamortized purchase discount as of December 31, 2023, as well as reduced prepayment rates on the MBS portfolio due to higher interest rates.
Previous report
Interest income related to debt securities is recognized in our consolidated statement of income using the effective interest method, or on a basis approximating a level rate of return over the contractual or estimated life of the security. The rate of return considers any non-refundable fees or costs, as well as purchase premiums or discounts, resulting in amortization or accretion, accordingly. The amortization of premiums and accretion of discounts are adjusted for prepayments when they occur, which primarily impact mortgage-backed securities.
Previous report
The following table presents the investment securities net premium amortization (discount accretion) for the periods indicated:
Previous report
(2)Negative values reflect the impact of interest rate environments outside of the U.S. where central bank rates were below zero for several major currencies.
Previous report
(3) Reflects the impact of balance sheet netting under enforceable netting agreements of approximately $140.36 billion, $71.02 billion and $62.15 billion for the years ended December 31, 2023, 2022 and 2021, respectively. Excluding the impact of netting, the average interest rates would be approximately 0.22%, 0.26% and 0.04% for the years ended December 31, 2023, 2022 and 2021, respectively.
Previous report
(4)Reflects the impact of balance sheet netting under enforceable netting agreements of approximately $4.94 billion, $5.39 billion and $5.60 billion for the years ended December 31, 2023, 2022 and 2021, respectively. Excluding the impact of netting, the average interest rates would be approximately 3.61%, 1.46% and 0.06% for the years ended December 31, 2023, 2022 and 2021, respectively.
Previous report
(6) Total deposits averaged $205.11 billion, $222.87 billion and $235.40 billion for the years ended December 31, 2023, 2022 and 2021, respectively.
Previous report
(7) Reflects the impact of balance sheet netting under enforceable netting agreements of approximately $4.67 billion, $4.59 billion and $5.48 billion for the years ended December 31, 2023, 2022 and 2021, respectively. Excluding the impact of netting, the average interest rates would be approximately 5.43%,2.20% and 0.38% for the years ended December 31, 2023, 2022 and 2021, respectively.
Previous report
Average investment securities decreased to $105.77 billion in 2023 from $111.93 billion in 2022. The portfolio declined across major asset classes, which was primarily driven by a smaller balance sheet from lower client deposits amidst a higher level of market rates.
Previous report
Average short-term borrowings decreased to$1.12 billion in 2023 from $1.19 billion in 2022.
Previous report
In 2023, we recorded a $46 million provision for credit losses, compared to $20 million in 2022, primarily reflecting an increase in loan loss reserves associated with commercial real estate.
Previous report
the 2023 notable items, higher salaries and continued business investments, partially offset by productivity savings. Notable items totaling $620 million, including $387 million associated with the FDIC special assessment and $203 million of repositioning charges, contributed to the increase in total expenses in 2023 relative to 2022.
Previous report
Compensation and employee benefits expenses increased 7% in 2023 compared to 2022, primarily due to higher repositioning charges, higher salaries and employee benefits, partially offset by lower contractor spend and seasonal expenses.
Previous report
Occupancy expenses increased 8% in 2023 compared 2022, primarily driven by an episodic 2022 gain on a sale leaseback transaction and expanded international real estate footprint, partially offset by savings from real estate footprint optimization.
Showing the first 40 of 81 passages. Open the source sections for the rest.
Reworded paragraphs (203)
Previous wording
As of December 31, 2023, we had consolidated total assets of $297.26 billion, consolidated total deposits of $220.97 billion, consolidated total shareholders' equity of $23.80 billion and approximately 46,000 employees. Through our two lines of business, Investment Servicing and Investment Management, we operate in more than 100 geographic markets worldwide, including the United States, Canada, Latin America, Europe, the Middle East and Asia.
Current wording
As of December 31, 2024, we had consolidated total assets of $353.24 billion, consolidated total deposits of $261.92 billion, consolidated total shareholders’ equity of $25.33 billion and approximately 53,000 employees. Through our two lines of business, Investment Servicing and Investment Management, we operate in more than 100 geographic markets worldwide, including the United States, Canada, Latin America, Europe, the Middle East and Asia.
Previous wording
•Operating leverage was (10.6)% points, largely due to the impact of the 2023 notable items. Operating leverage represents the difference between the percentage change in total revenue and the percentage change in total expenses, in each case relative to the prior year period.
Current wording
•Operating leverage was 9.4% points, largely reflecting the net impact of notable items in the current and prior year periods, which represented 7.4% points of operating leverage. Operating leverage represents the difference between the percentage change in total revenue and the percentage change in total expenses, in each case relative to the prior year period.
Previous wording
•Fee operating leverage was (10.2)% points, largely due to the impact of the 2023 notable items. Fee operating leverage represents the difference between the percentage change in total fee revenue and the percentage change in total expenses, in each case relative to the prior year period.
Current wording
•Fee operating leverage was 7.7% points, largely reflecting the net impact of notable items in the current and prior year periods, which represented 5.6% points of fee operating leverage. Fee operating leverage represents the difference between the percentage change in total fee revenue and the percentage change in total expenses, in each case relative to the prior year period.
Previous wording
•Returned approximately $4.6 billion to our shareholders in the form of common share repurchases and common stock dividends compared to approximately $2.4 billion in 2022.
Current wording
•Returned approximately $2.2 billion to our shareholders in the form of common share repurchases and common stock dividends compared to approximately $4.6 billion in 2023.
Previous wording
•Completed consolidation of one of our operations joint ventures in India, aimed at lowering operating costs and enhancing client service, and announced plans for consolidation of a second operations joint venture in India. The joint venture consolidation in 2023 increased our headcount by approximately 10% as of December 31, 2023 compared to December 31, 2022. Associated headcount cost was previously reflected in compensation and employee benefits expenses.
Current wording
•Completed the consolidation of our final joint venture in India, further advancing the plan to transform our operating model to unlock efficiency savings and improve client experience. The joint venture consolidation in 2024 increased our headcount by approximately 17% as of December 31, 2024, compared to December 31, 2023. Associated headcount cost was previously reflected in compensation and employee benefits expenses.
Previous wording
◦Revenue-related recovery of $23 million from settlement proceeds associated with the 2018 FX benchmark litigation resolution, which is reflected in foreign exchange trading services revenue;
Current wording
◦Revenue-related recovery of $15 million from settlement proceeds associated with a 2018 FX benchmark litigation resolution, which is reflected in foreign exchange trading services.
Previous wording
◦Loss on the sale of investment securities of approximately $294 million relating to the investment portfolio repositioning.
Current wording
◦Loss on the sale of investment securities of approximately $294 million related to an investment portfolio repositioning.
Previous wording
◦FDIC special assessment of $387 million recorded in other expenses, related to FDIC’s recovery of estimated losses to the Deposit Insurance Fund associated with the closures of Silicon Valley Bank and Signature Bank.
Current wording
◦FDIC special assessment of $387 million recorded in other expenses, related to FDIC’s recovery of estimated losses to the Deposit Insurance Fund associated with the
Previous wording
Closures of Silicon Valley Bank and Signature Bank and Related FDIC Matters
Current wording
closures of Silicon Valley Bank and Signature Bank.
Previous wording
▪Software and processing fees revenue increased 3% compared to 2022, primarily due to higher front office software and data revenue associated with CRD.
Current wording
▪Software and processing fees revenue increased 9% compared to 2023, primarily due to higher front office software and data revenue associated with CRD.
Previous wording
•NII increased 8% compared to 2022, primarily due to the impact of higher interest rates, partially offset by lower average deposit balances and deposit mix shift towards interest-bearing deposits.
Current wording
•NII increased 6% compared to 2023, primarily due to higher investment securities yields and loan growth, partially offset by deposit mix shift towards interest-bearing deposits.
Previous wording
◦Loss on sale of investment securities of $294 million;
Current wording
•Other income included a loss of $79 million compared to a loss of $294 million in 2023, mainly reflecting a loss on sale of investment securities related to the repositioning of the investment portfolio in both periods.
Previous wording
•AUC/A of $41.81 trillion as of December 31, 2023 increased 14% compared to December 31, 2022, primarily due to higher period-end market levels and net new business. In 2023, newly announced asset servicing mandates totaled approximately $904 billion. We onboarded approximately $1.74 trillion of AUC/A during 2023. Servicing assets remaining to be installed in future periods totaled approximately $2.30 trillion as of December 31, 2023.
Current wording
•AUC/A of $46.56 trillion as of December 31, 2024 increased 11% compared to December 31, 2023, primarily due to higher period-end market levels and client flows. In 2024, newly announced asset servicing mandates totaled approximately $2.33 trillion of AUC/A. We onboarded approximately $1.35 trillion of AUC/A during 2024. Servicing assets remaining to be installed in future periods totaled approximately $2.99 trillion as of December 31, 2024.
Previous wording
•AUM of $4.13 trillion as of December 31, 2023 increased 19% compared to December 31, 2022, primarily due to higher period-end market levels.
Current wording
•AUM of $4.72 trillion as of December 31, 2024 increased 15% compared to December 31, 2023, primarily due to higher period-end market levels and net inflows.
Previous wording
•In 2023, we returned approximately $4.6 billion to our shareholders in the form of common share repurchases and common stock dividends compared to approximately $2.4 billion in 2022.
Current wording
•In 2024, we returned approximately $2.2 billion to our shareholders in the form of common share repurchases and common stock dividends compared to approximately $4.6 billion in 2023.
Previous wording
◦We declared aggregate common stock dividends of $2.64 per share, totaling $837 million compared to $2.40 per share, totaling $871 million in 2022.
Current wording
$859 million compared to $2.64 per share, totaling $837 million in 2023.
Previous wording
◦We acquired an aggregate of 49.2 million shares of common stock at an average per share cost of $77.22 and an aggregate cost of approximately $3.8 billion. In 2022, we acquired an aggregate of 19.5 million shares of common stock, at an average per share cost of $76.81 and an aggregate cost of approximately $1.5 billion. These purchases were all conducted under the share repurchase programs approved by our Board of Directors.
Current wording
◦We acquired an aggregate of 15.1 million shares of common stock at an average per share cost of $85.89 and an aggregate cost of approximately $1.3 billion. In 2023, we acquired an aggregate of 49.2 million shares of common stock, at an average per share cost of $77.22 and an aggregate cost of approximately $3.8 billion. These purchases were all conducted under the share repurchase programs approved by our Board of Directors.
Previous wording
•Our standardized CET1 capital ratio decreased to 11.6% as of December 31, 2023, compared to 13.6% as of December 31, 2022, primarily driven by the continuation of common share repurchases and other capital distributions, partially offset by retained earnings and an improvement in AOCI. Our Tier 1 leverage ratio decreased to 5.5% as of December 31, 2023 compared to 6.0% as of December 31, 2022, primarily driven by the continuation of common share repurchases, partially offset by lower consolidated average assets. Given the current global economic environment, and our plans for share repurchases, we currently expect our CET1 capital and Tier 1 leverage ratios to remain within or above our target ranges of 10-11% and 5.25-5.75%, respectively.
Current wording
•Our standardized CET1 capital ratio was 10.9% as of December 31, 2024, compared to 11.6% as of December 31, 2023, primarily driven by increased capital return and higher deployment of RWA for business growth, partially offset by capital generated from earnings. Our Tier 1 leverage ratio decreased to 5.2% as of December 31, 2024, compared to 5.5% as of December 31, 2023, mainly driven by higher average balance sheet levels. Given the current global economic environment, and our plans for capital actions, we expect our CET1 capital ratio and Tier 1 leverage ratio to remain within or above our target ranges of 10-11% and 5.25-5.75%, respectively.
Previous wording
•On August 3, 2023, we issued $1.2 billion aggregate principal amount of 5.272% fixed rate senior notes due 2026 and $300 million aggregate principal amount of floating rate senior notes due 2026.
Current wording
•On October 22, 2024, we issued $1.2 billion aggregate principal amount of 4.330% fixed rate senior notes due 2027, $300 million aggregate principal amount of floating rate senior notes due 2027, and $800 million aggregate principal amount of 4.675% fixed-to-floating rate senior notes due 2032.
Previous wording
•On December 3, 2023, we redeemed $500 million aggregate principal amount of 3.776% fixed-to-floating rate senior notes due 2024.
Current wording
•On January 27, 2025, we redeemed $500 million aggregate principal amount of 4.857% fixed-to-floating rate senior notes due 2026.
Previous wording
Table 2: Total Revenue, provides the breakout of fee revenue for the years ended December 31, 2023, 2022 and 2021. Servicing and management fees collectively made up approximately 72%, 73% and 76% of the total fee revenue in 2023, 2022 and 2021, respectively.
Current wording
Table 2: Total Revenue, provides the breakout of fee revenue for the years ended December 31, 2024, 2023 and 2022. Servicing and management fees collectively made up approximately 70%, 72% and 73% of the total fee revenue in 2024, 2023 and 2022, respectively.
Previous wording
Servicing fees, as presented in Table 2: Total Revenue, decreased 3% in 2023 compared to 2022, primarily due to lower client activity and adjustments, normal pricing headwinds, lower average fixed income markets and a previously disclosed client transition, partially offset by higher average equity market levels and net new business.
Current wording
Servicing fees, as presented in Table 2: Total Revenue, increased 2% in 2024 compared to 2023, as higher average market levels and net new business, excluding a previously disclosed client transition, were partially offset by pricing headwinds, a previously disclosed client transition and lower client activity and adjustments, including asset mix shift.
Previous wording
Servicing fees generated outside the U.S. were approximately 46% of total servicing fees in both 2023 and 2022.
Current wording
Servicing fees generated outside the United States were approximately 47% of total servicing fees in 2024, compared to approximately 46% of total servicing fees in 2023.
Previous wording
Over the five years ended December 31, 2023, we estimate that worldwide equity and fixed income market valuations impacted our servicing fees revenue by approximately 2% on average with a range of (4)% to 8% annually and approximately 1% and (4)% in 2023 and 2022, respectively. The impact of changes in worldwide fixed income markets on our servicing fees, which historically was included within client activity and asset flows, is now reflected within change in market valuations. See Table 3: Daily Averages, Month-End Averages and Year-End Equity Indices for selected indices. While the specific indices presented are indicative of general market trends, the asset types and classes relevant to individual client portfolios can and do differ, and the performance of associated relevant indices and of client portfolios can therefore differ from the performance of the indices presented. In addition, our asset classifications may differ from those industry classifications presented.
Current wording
Over the five years ended December 31, 2024, we estimate that worldwide equity and fixed income market valuations impacted our servicing fees revenue by approximately 2% on average with a range of (4)% to 8% annually and approximately 5% and 1% in 2024 and 2023, respectively. See Table 3: Daily Averages, Month-End Averages and Year-End Equity Indices for selected indices. While the specific indices presented are indicative of general market trends, the asset types and classes relevant to individual client portfolios can and do differ, and the performance of associated relevant indices and of client portfolios can therefore differ from the performance of the indices presented. In addition, our asset classifications may differ from those industry classifications presented.
Previous wording
Assuming that all other factors remain constant, including client activity, asset flows and pricing, we estimate, using relevant information as of December 31, 2023, that a 10% increase or decrease in worldwide equity valuations, on a weighted average basis, over the relevant periods for which our servicing fees are calculated, would result in a corresponding change in our total servicing fee revenues, on average and over multiple quarters, of approximately 3%. We estimate, similarly assuming all other factors remain constant and using relevant information as of December 31, 2023, that changes in worldwide fixed income markets, which on a weighted average basis and over time are typically less volatile than worldwide equity markets, have a smaller corresponding impact on our servicing fee revenues on average and over time. In periods of higher fixed income market volatility such as we have been experiencing since the second quarter of 2022, the impact of fixed income markets on our servicing fee revenues may increase.
Current wording
Assuming that all other factors remain constant, including client activity, asset flows and pricing, we estimate, using relevant information as of December 31, 2024, that a 10% increase or decrease in worldwide equity valuations, on a weighted average basis, over the relevant periods for which our servicing fees are calculated, would result in a corresponding change in our total servicing fee revenues, on average and over multiple quarters, of approximately 3%. We estimate, similarly assuming all other factors remain constant and using relevant information as of December 31, 2024, that changes in worldwide fixed income markets, which on a weighted average basis and over time are typically less volatile than worldwide equity markets, have a smaller corresponding impact on our servicing fee revenues on average and over time.
Previous wording
Our clients may change the asset classes in which their assets are invested, based on their market outlook, risk acceptance tolerance or other considerations. Over the five years ended December 31, 2023, we estimate that client activity and asset flows, together, impacted our servicing fees revenue by approximately (1)% on average with a range of (3)% to 1% annually and approximately (3)% and 0% in 2023 and 2022, respectively. As noted under “Changes in Market Valuations” in this section, this analysis now excludes, but in prior reporting previously included, the impact of changes in worldwide fixed income markets on our servicing fees. See Table 5: Industry Asset Flows for selected asset flow information. While the asset flows presented are indicative of general market trends, the asset types and classes relevant to individual client portfolios can and do differ, and our flows may differ from those market trends. In addition, our asset classifications may differ from those industry classifications presented.
Current wording
Our clients may change the asset classes in which their assets are invested, based on their market outlook, risk acceptance tolerance or other considerations. Over the five years ended December 31, 2024, we estimate that client activity and asset flows, together, impacted our servicing fees revenue by approximately (1)% on average with a range of (3)% to 1% annually and approximately 0% and (3)% in 2024 and 2023, respectively. See Table 5: Industry Asset Flows for selected asset flow information. While the asset flows presented are indicative of general market trends, the asset types and classes relevant to individual client portfolios can and do differ, and our flows may differ from those market trends. In addition, our asset classifications may differ from those industry classifications presented.
Previous wording
Over the five years ended December 31, 2023, net new business, which includes business both won and lost, has affected our servicing fee revenues by approximately 0% on average with a range of 0% to 1% annually and approximately 1% in both 2023 and 2022.
Current wording
Over the five years ended December 31, 2024, net new business, which includes business both won and lost, has affected our servicing fee revenues by approximately 0% on average with a range of 0% to 1% annually and approximately 0% and 1% in 2024 and 2023, respectively.
Previous wording
Gross investment servicing mandates were $904 billion of AUC/A in 2023 and $1.80 trillion of AUC/A per year on average over the five years ended December 31, 2023, ranging from approximately $0.79 trillion to $3.52 trillion of AUC/A annually in any given year.
Current wording
Gross investment servicing mandates were $2.33 trillion of AUC/A in 2024 and $1.90 trillion of AUC/A per year on average over the five years ended December 31, 2024, ranging from approximately $0.79 trillion to $3.52 trillion of AUC/A annually in any given year.
Previous wording
Revenues associated with new mandates are not reflected in our servicing fee revenue until the assets have been installed. Our installation timeline, in general, can range from 6 to 36 months, with the average installation timeline being approximately 9 to 12 months over the past 2 years. We expect that our more complex installations, including new State Street Alpha mandates, will generally be on the longer end of the 6 to 36 month range. With respect to the current asset mandates of approximately $2.30 trillion of AUC/A that are yet to be installed as of December 31, 2023, we expect the conversion will occur over the coming 24 months, with approximately 70-80% expected to be installed in 2024, with the remaining expected to be installed throughout 2025 and 2026. The expected timing of these installations is subject to change due to a variety of factors, including adjusted implementation schedules agreed with clients, scope adjustments, and product and functionality changes.
Current wording
Revenues associated with new mandates are not reflected in our servicing fee revenue until the assets have been installed. Our installation timeline, in general, can range from 6 to 36 months, with the average installation timeline being approximately 9 to 12 months over the past 2 full fiscal years. We expect that our more complex installations, including new State Street Alpha mandates, will generally be on the longer end of the 6 to 36 months range. With respect to the current asset mandates of approximately $2.99 trillion of AUC/A that are yet to be installed as of December 31, 2024, we expect the conversion will mostly occur over the coming 24 months, with approximately 60% expected to be installed in 2025 and approximately 30% in 2026, with the balance expected to be installed largely in 2027. The expected timing of these installations is subject to change due to a variety of factors, including adjusted implementation schedules agreed with clients, scope adjustments, and product and functionality changes.
Previous wording
The industry in which we operate has historically faced pricing pressure, and our servicing fee revenues are also affected by such pressures today. Consequently, no assumption should be drawn as to future revenue run rate from announced servicing AUC/A wins, as the amount of revenue associated with AUC/A, once installed, can vary materially. On average, over the five years ended December 31, 2023, we estimate that pricing pressure with respect to existing clients has impacted our servicing fees by approximately (3)% annually, with the impact ranging from (2)% to (4)% in any given year and approximately (2)% in both 2023 and 2022. Pricing concessions can be a part of a contract renegotiation with a client including terms that may benefit us, such as extending the term of our relationship with the client, expanding the scope of services that we provide or reducing our dependency on manual processes through the standardization of the services we provide. The timing of the impact of additional revenue generated by anticipated additional services and the amount of revenue generated, may differ from expectations due to the impact of pricing concessions on existing services due to the necessary time required to onboard those new services or process changes, the nature of those services and client investment practices and other factors. These same market pressures also impact the fees we negotiate when we win business from new clients.
Current wording
The industry in which we operate has historically faced pricing pressure, and our servicing fee revenues are also affected by such pressures today. Consequently, no assumption should be drawn as to future revenue run rate from announced servicing AUC/A wins, as the amount of revenue associated with AUC/A, once installed, can vary materially. On average, over the five years ended December 31, 2024, we estimate that pricing pressure with respect to existing clients has impacted our servicing fees by approximately (2)% annually, with the impact ranging from (2)% to (3)% in any given year and approximately (3)% and (2)% in 2024 and 2023, respectively. Pricing concessions can be a part of a contract renegotiation with a client including terms that may benefit us, such as extending the term of our relationship with the client, expanding the scope of services that we provide or reducing our dependency on manual processes through the standardization of the services we provide. In 2024, the impact was primarily driven by several multi-year renewals of large strategic clients. The timing of the impact of additional revenue generated by anticipated additional services and the amount of revenue generated may differ from expectations due to the impact of pricing concessions on existing services due to the necessary time required to onboard those new services or process changes, the nature of those services and client investment practices and other factors. These same market pressures also impact the fees we negotiate when we win business from new clients.
Previous wording
Historically, and based on an indicative sample of revenue, we estimate that approximately 60%, on average, of our servicing fee revenues have been variable due to changes in asset valuations including changes in daily average valuations of AUC/A; another approximately 15%, on average, of our servicing fees are impacted by the volume of activity in the funds we serve; and the remaining approximately 25% of our servicing fees tend not to be variable in nature nor impacted by market fluctuations or values.
Current wording
Historically, and based on an indicative sample of revenue, we estimate that approximately 60%, on average, of our servicing fee revenues have been variable due to changes in asset valuations including changes in daily average valuations of AUC/A; another approximately 20%, on average, of our servicing fees are impacted by the volume of activity in the funds we serve; and the remaining approximately 20% of our servicing fees tend not to be variable in nature nor impacted by market fluctuations or values.
Previous wording
Based on the impact of the above, client activity and asset flows, net new business and pricing, noted drivers of our servicing fee revenue will vary depending on the mix of products and services we provide to our clients. The full impact of changes in market valuations and the volume of activity in the funds may not be fully reflected in our servicing fee revenues in the periods in which the changes occur, particularly in periods of higher volatility.
Current wording
In addition to the effects described above (i.e., client activity and asset flows, net new business and pricing) our servicing fee revenue in any period will vary depending on the mix of products and services we provide to our clients. The full impact of changes in market valuations and the volume of activity in the funds may not be fully reflected in our servicing fee revenues in the periods in which the changes occur, particularly in periods of higher volatility.
Previous wording
Asset servicing mandates newly announced in 2023 totaled approximately $904 billion of AUC/A. Servicing assets remaining to be installed in future periods totaled approximately $2.30 trillion as of December 31, 2023, which will be reflected in AUC/A in future periods after installation and will generate servicing fee revenue in subsequent periods. The full revenue impact of such mandates will be realized as the assets are installed and additional services are added over that period.
Current wording
Asset servicing mandates newly announced in 2024 totaled approximately $2.33 trillion of AUC/A. Servicing assets remaining to be installed in future periods totaled approximately $2.99 trillion as of December 31, 2024, which will be reflected in AUC/A in future periods after installation and will generate servicing fee revenue in subsequent periods. The full revenue impact of such mandates will be realized as the assets are installed and additional services are added over that period.
Previous wording
New asset servicing mandates may be subject to completion of definitive agreements, approval of applicable boards and shareholders and customary regulatory approvals. New asset servicing mandates and servicing assets remaining to be installed in future periods exclude certain new business which has been contracted, but for which the client has not yet provided permission to publicly disclose and the expected installation date extends beyond one quarter. These excluded assets, which from time to time may be significant, will be included in new asset servicing mandates and reflected in servicing assets remaining to be installed in the period in which the client provides its permission. Servicing mandates and servicing assets remaining to be installed in future periods are presented on a gross basis based on factors present on or about the time we determine the business to be won by us and are not updated based on subsequent developments, including changes in assets, market valuations, scope and, potentially, termination. Such assets therefore do not include the impact of clients who have notified us during the period of their intent to terminate or reduce their relationship with us, which may from time to time be significant.
Current wording
New asset servicing mandates, including Alpha servicing mandates, may be subject to completion of definitive agreements, consents or assignments, approval of applicable boards, shareholders and customary regulatory approvals or other conditions, the failure to complete any of which will prevent the relevant mandate from being installed and serviced. New asset servicing mandates and servicing assets remaining to be installed in future periods exclude certain new business which has been contracted, but for which the client has not yet provided permission to publicly disclose or anonymously reference. These excluded assets, which from time to time may be significant, will be included in new asset servicing mandates and reflected in servicing assets remaining to be installed in the period in which the client provides its permission. Servicing mandates and servicing assets remaining to be installed in future periods may include assets associated with acquisitions or structured transactions and are presented on a gross basis based on factors present on or about the time we determine the business to be won by us and are not updated based on subsequent developments, including changes in assets, market valuations, scope and, potentially, termination. Such assets therefore do not include the impact of clients who have notified us during the period of their intent to terminate or reduce their relationship with us, which from time to time may be significant.
Previous wording
As previously disclosed, in early 2021, due to a decision to diversify providers, one of our large asset servicing clients is moving a significant portion of its ETF assets currently with State Street to one or more other providers. Prior to the commencement of the transition of assets, which began in 2022, we estimated that the financial impact of this transition represented approximately 1.9% of our 2021 total fee revenue. We began to see the impact of the transition on our fee revenue and income growth trends primarily towards the end of 2023, with the remainder expected to be realized through 2025 as the transition continues. On a quarterly run rate basis, we estimate that the fourth quarter of 2023 reflects approximately half of the revenue impact of the exiting business. On a full year basis, we estimate that 2023 reflects approximately a fourth of the revenue impact of the exiting business. We expect to continue as a significant service provider for this client after this transition and for the client to continue to be meaningful to our business.
Current wording
As previously disclosed, in early 2021, due to a decision to diversify providers, one of our large asset servicing clients is moving a significant portion of its ETF assets currently with State Street to one or more other providers. Prior to the commencement of the transition of assets, which began in 2022, we estimated that the financial impact of this transition represented approximately 1.9% of our 2021 total fee revenue. We began to see the impact of the transition on our fee revenue and income growth trends primarily towards the end of 2023, with the remainder expected to be realized through 2025 as the transition continues. On a full year run rate basis, we estimate that 2024 reflected approximately two-thirds of the revenue impact of the exiting business. We expect to continue as a significant service provider for this client after this transition and for the client to continue to be meaningful to our business.
Previous wording
Management fees generated outside the U.S. were approximately 26% of total management fees in both 2023 and 2022.
Current wording
Management fees generated outside the United States were approximately 25% of total management fees in 2024, compared to approximately 26% of total management fees in 2023.
Previous wording
Foreign exchange trading services revenue, as presented in Table 2: Total Revenue, decreased 8% in 2023 compared to 2022, primarily reflecting lower direct FX spreads, a decline in market volatility and lower client FX volumes. Foreign exchange trading services revenue comprises revenue generated by FX trading and revenue generated by brokerage and other trading services, which made up 63% and 37%, respectively, of foreign exchange trading services revenue in 2023, and 68% and 32%, respectively in 2022.
Current wording
Foreign exchange trading services revenue, as presented in Table 2: Total Revenue, increased 11% in 2024 compared to 2023, primarily due to higher client volumes, partially offset by lower spreads associated with lower average FX volatility. Foreign exchange trading services revenue comprises revenue generated by FX trading and revenue generated by brokerage and other trading services, which made up 63% and 37%, respectively, of foreign exchange trading services revenue in both 2024 and 2023.
Previous wording
FX” service, or to one of our electronic trading platforms. Street FX, in which we continue to act as a principal market-maker, enables our clients to define their FX execution strategy and automate the FX trade execution process, both for funds under custody with us as well as those under custody at another bank.
Current wording
Our clients that utilize indirect FX trading can, in addition to executing their FX transactions through dealers not affiliated with us, transition from indirect FX trading to either direct sales and trading execution, including our “Street FX” service. Street FX, in which we continue to act as a principal market-maker, enables our clients to define their FX execution strategy and automate the FX trade execution process, both for funds under custody with us as well as those under custody at another bank.
Previous wording
•Electronic FX services: Our clients may choose to execute FX transactions through one of our electronic trading platforms. These transactions generate revenue through a “click” fee.
Current wording
•Electronic FX services: Our clients may choose to execute FX transactions through one of our electronic trading platforms (i.e., FX Connect, Currenex). These transactions generate revenue through a “click” fee.
Previous wording
Software and processing fees revenue, presented in Table 2: Total Revenue, increased 3% in 2023 compared to 2022, primarily due to higher front office software and data revenue associated with CRD.
Current wording
Software and processing fees revenue, as presented in Table 2: Total Revenue, increased 9% in 2024 compared to 2023, primarily due to higher front office software and data revenue associated with CRD.
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◦We declared aggregate common stock dividends of $2.90 per share, totaling
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•On March 15, 2024, we redeemed an aggregate $1.0 billion, or all 7,500 outstanding shares, of our non-cumulative perpetual preferred stock, Series D, for a cash redemption price of $100,000 per share (equivalent to $25 per depository share), and all 2,500 of the outstanding shares of our noncumulative perpetual preferred stock, Series F (represented by 250,000 depository shares), for a cash redemption price of $100,000 per share (equivalent to $1,000 per depositary share), plus all declared and unpaid dividends.
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since this would require an assessment of future claims that may be made against us that have not yet occurred. We did not record any liabilities under these arrangements as of both December 31, 2024 and 2023.
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financial institutions, applying our internal credit analysis process to each potential investment and diversifying our exposure by counterparty and industry segment. However, these loans have significant exposure to credit losses relative to higher-rated loans in our portfolio.
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factors such as credit migration within our loan portfolio, as well as changes in management’s economic outlook.
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Our approach to risk management involves all levels of management, from the Board and its committees, including its E&A Committee, the RC, the
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the organization. TORC is co-chaired by the Chief Operating Officer and the CRO.
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Ongoing active monitoring and management of our credit risk is an integral part of our credit risk management framework. We maintain management information systems to identify, measure, monitor and
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•Deliver regular and formal reporting to stakeholders, including exam results,
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management reporting to ALCO, MRAC and the Board’s RC.
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31, 2024 and December 31, 2023, approximately 70% of our average total deposit balances were denominated in U.S. dollars, 15% in EUR, 10% in GBP and 5%in all other currencies.
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units, separate from those business units’ discrete activities.
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Our covered positions consist primarily of the trading portfolios held by our Global Markets business. They also arise from certain positions held by our Global Treasury group. These trading positions include products such as foreign exchange spot,
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depending on the severity of the loss event, its characterization among the seven Basel-defined UOM, and the stability of the distributional approach for a particular UOM, and without direct correlation to the effects of the loss event, or the timing of such effects, on our results of operations.
Current report — wording carried from elsewhere
On January 31, 2024, we issued 1.5 million depositary shares, each representing a 1/100th ownership interest in a share of fixed rate reset, non-cumulative perpetual preferred stock, Series I, without par value per share, with a liquidation preference of $100,000 per share (equivalent to $1,000 per depositary share), in a public offering. The aggregate proceeds, net of underwriting discounts, commissions and other issuance costs, were approximately $1.5 billion.
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totaling $325.61 billion and $293.86 billion as collateral for indemnified securities on loan as of December 31, 2024 and 2023, respectively.
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We categorize the financial assets and liabilities that we carry at fair value in our consolidated statement of condition on a recurring basis based on U.S. GAAP’s prescribed three-level valuation
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◦FDIC special assessment of $387 million;
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◦Other net expenses of approximately $30 million.
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Our clients that utilize indirect FX trading can, in addition to executing their FX transactions through dealers not affiliated with us, transition from indirect FX trading to either direct sales and trading execution, including our “Street
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that are more specific to our business activities. Our risk management framework focuses on material risks, which include the following:
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and assign an updated internal risk rating in a timely manner.
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Global Treasury is responsible for our management of liquidity. This includes the day-to-day management of our global liquidity position, the
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On December 3, 2023, we redeemed $500 million aggregate principal amount of 3.776% fixed-to-floating rate senior notes due 2024.
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•Providing risk oversight, challenge and monitoring for the Enterprise Continuity Services function and Third Party
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We utilize an internal VaR model to calculate our regulatory market risk capital requirements. We use a
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correlation levels to differ from assumptions implicit in the VaR calculations; and
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We experienced no back-testing exceptions in 2023 and three back-testing exceptions in 2022. At a
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(3) The dividend rate for the floating rate period of the Series D preferred stock that begins on March 15, 2024 and all subsequent floating rate periods will transition to a new, fixed rate in accordance with the LIBOR Act and the contractual terms of the Series D preferred stock.
Previous report — wording carried elsewhere
Changes in the fair value of these financial assets and liabilities are recorded either as components of our consolidated statement of income or as components of other comprehensive income within shareholders' equity in our consolidated statement of condition. In addition to those financial assets and liabilities that we carry at fair value in our
Previous report — wording carried elsewhere
Goodwill represents the excess of the cost of an acquisition over the fair value of the net tangible and