State Street Corporation (NYSE:STT) stock fell on Friday after reporting third-quarter results.
The company reported adjusted earnings per share of $2.78, beating the analyst consensus estimate of $2.61.
Quarterly sales reached $3.545 billion, up 9% year-over-year (Y/Y), beating the analyst consensus of $3.459 billion.
Revenue Growth Driven by Fees
Fee revenue rose 8% Y/Y, driven by strength across key segments. Adjusted for notable items, the increase was 12%.
Management fees jumped 16%, servicing fees grew 7%, FX trading services climbed 11% (16% excluding notable items), securities finance rose 19%, and software and processing fees increased 9%.
Other fee revenue declined $46 million, but adjusted for notable items, it rose $20 million.
Net interest income fell 1% Y/Y to $715 million, primarily driven by lower average short-end rates and a deposit mix shift.
Total expenses increased 5% Y/Y, due to higher investments to improve technology and business capabilities, revenue-related costs, and currency translations.
Investment Management AUM as of quarter-end surged 15% Y/Y to $5.4 trillion, on higher quarter-end market levels and net inflows.
Total provision for credit losses was $9 million, mainly due to the evolving macroeconomic environment and higher loan loss reserves.
Capital Position and Shareholder Returns
State Street Corporation ended the third quarter of 2025 with a standardized common equity tier 1 (CET1) ratio of 11.3%, down 30 basis points from a year earlier due to capital returns and higher risk-weighted assets from business growth, but up 60 basis points from the previous quarter, reflecting earnings-driven capital generation and lower RWAs.
During the quarter, the company returned $637 million to shareholders, including $400 million in share buybacks and $237 million, or 84 cents per share, in dividends.
Management Commentary
“We remained focused on innovation and enhancing our client capabilities, as evidenced by the advancement of our Wealth Services strategy through our recently announced partnership with Apex Fintech Solutions. Amid a record quarter of Management fee revenue, our Investment Management business continued to innovate at pace, launching 39 new products as we continue to offer differentiated client solutions across our businesses,” said CEO Ron O’Hanley.
Price Action: STT shares were trading lower by 4.38% to $108.00 at last check Friday.
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