- State Street Corporation STT reported Q1 revenues of $3.10 billion, up 1% Y/Y, missing the consensus estimate of $3.12 billion.
- Fee revenues declined 9% Y/Y to $2.34 billion due to the impact of lower average market levels on servicing (-11% Y/Y) and management (-12% Y/Y) fees, along with a decline in FX trading services (-5% Y/Y) and Front office software and data revenue.
- Net interest income rose 50% Y/Y to $766 million, led by increased short-term market rates from global central bank hikes, higher long-term interest rates, and balance sheet positioning.
- Total expenses were $2.37 billion, up 2% YoY, on continued business investments and raised salaries.
- STT witnessed a new business win of $112 billion in Q1. Of this, half were higher fee rate Alternatives mandates, with expected significant installations in Q2 2023.
- The net interest margin (NIM) rose 51 basis points Y/Y to 1.31%.
- STT provided $1 billion of liquidity to a U.S. financial institution, which resulted in a provision of $29 million ($0.06 impact on Q1 result).
- The provision for credit losses was $44 million (including $15 million from credit portfolio rating changes) in Q1 2023 compared to $10 million in Q4 2022.
- Net income stood at $549 million, down from $604 million in the year-ago quarter.
- EPS of $1.52 missed the consensus estimate of $1.64.
- AUM were $3.6 trillion, down 10%, reflecting lower market levels and net outflows.
- The common equity Tier 1 ratio was 12.1% at the end of Q1 2023 compared with 11.9% in the prior year.
- Price Action: STT shares are trading lower by 12.80% at $69.80 on the last check Monday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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