State Street Q3 Revenue Rises 13% as Custody Assets Top $59 Trillion

State Street Corporation (STT ) reported third-quarter 2026 financial results on October 14, 2026, with total revenue of $4,004 million, up 12.9% from $3,545 million in the same period of 2025, and diluted earnings per share of $3.69, up 32.7% from $2.78. The company said assets under custody and/or administration reached a record $59.2 trillion and assets under management reached a record $6.3 trillion as of September 30, 2026, in its earnings announcement, and it scheduled a public conference call for 11:00 a.m. Eastern time the same day.

Net income was $1,090 million, up 26.6% from a year earlier, and net income available to common shareholders was $1,030 million, up 28.4%, according to the detailed financial tables in State Street’s earnings release addendum. Pre-tax margin was 34.6%, compared with 31.1% in the third quarter of 2025, return on average common equity was 16.4%, and return on average tangible common equity, a non-GAAP measure, was 25.1%. The effective tax rate was 21.5%. State Street said there were no notable items in the third quarter of 2026, the second quarter of 2026 or the third quarter of 2025.

Total fee revenue was $3,140 million, up 11.0%, and net interest income was $864 million, up 20.8%. Servicing fees accounted for 37% of total revenue, net interest income 22%, management fees 20%, foreign exchange trading 11% and securities finance 4%, according to the company’s earnings fact sheet, with other fee revenue of $98 million representing roughly 2%.

Servicing and Investment Management

Servicing fees were $1,492 million, up 9.9% year over year and 1.6% sequentially, a quarterly record the company attributed primarily to organic growth and higher average market levels. Assets under custody and/or administration ended the quarter at $59,173 billion, up 14.5% from a year earlier and 2.3% from the second quarter. State Street reported $429 billion of new servicing asset wins in the quarter and $68 million of new servicing fee revenue wins, with $332 million of servicing fee revenue and $2,976 billion of assets remaining to be installed at quarter-end. The company also announced an agreement to acquire the Santander CACEIS Latam Securities Services joint venture, a transaction subject to regulatory approvals and customary closing conditions, and said it won its first Wealth Services mandate with a large U.S. registered investment advisor client.

Management fees were $797 million, up 20.0% from a year earlier, which the company attributed to higher average market levels and quarterly long-term net inflows of $69 billion, partially offset by cash net outflows of $62 billion. Total net inflows were $7 billion. Index ETF net inflows were $68 billion, driven, the company said, by SPY, its U.S. low-cost ETF suite, U.S. fixed income, gold and EMEA products. Assets under management of $6,306 billion were up 15.8% year over year; the total includes approximately $172 billion of SPDR product assets for which State Street Global Advisors Funds Distributors acts solely as marketing agent.

The company launched 38 new products and solutions in the quarter, including the Endowment Strategy Index ETF (UCBG) in partnership with University of California Investments, a 90/10 ETF backed by what State Street described as a record $2.5 billion seed investment, and the State Street Blackstone Senior Loan and High Income AUD-hedged Active ETFs.

Foreign exchange trading services revenue was $427 million, up 17.3% from a year earlier on what the company called record FX client volumes, up 31%, but down 13.6% from the second quarter, a decline it attributed largely to a lower mix of emerging markets revenue. Securities finance revenue was $151 million, up 9.4%, with average securities on loan up 14.9% to $464,538 million. Software services revenue was $175 million, up 4.8%; software annual recurring revenue was $442 million, up about 8%, with $14 million of new bookings. Other fee revenue fell 29.5% to $98 million, primarily due to market-related adjustments, according to the company’s earnings presentation.

Net interest income of $864 million reflected a net interest margin of 1.12% on a fully taxable-equivalent basis, up 16 basis points from a year earlier, which State Street attributed to an improved funding mix, investment portfolio repricing and a reduced impact from terminated hedges. Total expenses were $2,620 million, up 7.6%, driven mainly by higher revenue-related costs and continued strategic investments, the company said. Compensation and employee benefits expense was $1,251 million, up 7.7%, and information systems and communications expense was $594 million, up 14.9%.

Capital Return and Full-Year Outlook

State Street’s common equity tier 1 ratio under the standardized approach, its binding capital measure, was an estimated 11.0% at quarter-end, up 0.2 percentage points from the second quarter, an increase the company attributed to capital generated from earnings and lower risk-weighted assets, partially offset by continued capital return and a reduction in accumulated other comprehensive income. The tier 1 leverage ratio was 5.5%, the supplementary leverage ratio was 6.4% and the liquidity coverage ratio was 106%. Total assets were $403,341 million and total deposits were $311,651 million as of September 30, 2026.

Capital returned to common shareholders in the quarter totaled $651 million, consisting of $251 million of declared common dividends and $400 million of share repurchases, a total payout ratio of 63% of net income available to common shareholders. Dividends declared were $0.92 per common share, compared with $0.84 in each of the prior four quarters. Year-to-date capital return was $1.9 billion, split between $715 million of dividends and $1,200 million of repurchases, a 69% payout ratio.

State Street raised its full-year 2026 outlook in the presentation. The company now expects fee revenue growth of approximately 13% to 14%, up from its July outlook of approximately 12% to 13%, and net interest income growth of approximately 15% to 16%, up from approximately 14% to 15%. It expects expense growth of approximately 8% to 8.5% and operating leverage of more than 500 basis points. The outlook assumes global equity markets remain flat from current levels and that interest rates stay broadly aligned with current forward rates, and it excludes items outside the normal course of business.

The presentation also restated medium-term targets set at the company’s second-quarter 2026 announcement: a 35% pre-tax margin and a return on tangible common equity in the mid-20s percent range over a three-to-five-year horizon, including approximately $1 billion of annual run-rate benefits from its Transformation program expected by 2029, split between roughly $750 million of productivity savings and $250 million of revenue.

For the first nine months of 2026, total revenue was $11,848 million, up 15.3% from the same period of 2025, with diluted earnings per share of $9.82, or $10.17 excluding notable items.