State Street Corporation

State Street said third-quarter 2026 EPS was $3.69, up 33% year over year. Total revenue was $4 billion, up 13% year over year; fee revenue rose 11% and NII rose 21%. Expenses increased 8% to $2.6 billion. Pretax margin expanded 350 basis points to 35% and ROTCE rose to 25%. On the business side, servicing fees were about $1.5 billion, up 10%; management fees were $797 million, up 20%; FX trading services revenue was $427 million, up 17%; securities finance revenue was $151 million, up 9%; software services were $175 million, up 5%; AUC/A ended at a record $59.2 trillion; AUM ended at a record $6.3 trillion; and net inflows were $7 billion. For full-year 2026, management now expects fee revenue growth of 13% to 14%, NII growth of 15% to 16%, expense growth of roughly 8% to 8.5%, positive operating leverage of over 500 basis points, an effective tax rate of about 22%, and a total payout ratio approaching 80%.

Ron O’Hanley framed the quarter as evidence that State Street’s 'One State Street' model is working, with the firm serving clients through asset servicing, investment management, and markets in a volatile macro environment. He emphasized record results, strategic momentum in alternatives, digital assets, and wealth, and said the company is building a simpler, faster, more scalable platform through transformation and AI. His tone was confident and constructive, with repeated references to durable growth and long-term value creation.

John Woods highlighted broad-based financial strength: revenue up 13%, EPS up 33%, NII up 21%, and expenses up 8% to $2.6 billion. He pointed to 16 basis points of NIM expansion to 112 basis points, CET1 at 11%, Tier 1 leverage at 5.5%, and $651 million returned to shareholders in the quarter. He also said the updated full-year outlook reflects stronger performance, with fee revenue growth now expected at 13% to 14%, NII growth at 15% to 16%, and buybacks ramping into the fourth quarter toward a payout ratio approaching 80%.

Analysts focused on the fourth-quarter implications of the NII guide, and Woods said NII should grow sequentially again in Q4, likely landing toward the upper end of the new range. Questions also centered on servicing sales, where management said year-to-date sales are running above $200 million but should accelerate in Q4, with the company expecting the fourth straight year above $300 million. Analysts asked about capital and balance-sheet capacity for wealth/RIA custody, and management said the strategy is to use capital to support attractive organic growth while still ramping buybacks; they also stressed that the wealth move is about meeting a structural market shift rather than simply adding balance-sheet risk.