Global Finance News
14 Oct 2026, 15:40
State Street Falls 6.4% Despite Strong Q3 Growth as Fee Revenue Slips Sequentially
State Street (NYSE: STT) shares fell about 6.4% after the company reported third-quarter 2026 EPS of $3.69, up 33% year over year, on total revenue of $4.0 billion, up 13%. Net income increased 27% to $1.09 billion, while pre-tax margin expanded to 34.6%.
Assets under custody and administration reached a record $59.2 trillion, up 15%, while assets under management rose 16% to a record $6.3 trillion. State Street also reported $429 billion of new servicing AUC/A wins and $68 million of new servicing fee revenue wins during the quarter.
Revenue growth was broad-based. Servicing fees rose 10% year over year, management fees increased 20%, FX trading services rose 17%, and securities finance increased 9%. Net interest income climbed 21%, supported by a 16-basis-point improvement in net interest margin.
However, there were some softer sequential trends. Total fee revenue declined 2% from the second quarter, while total revenue fell 1% quarter over quarter. FX trading services also declined sequentially despite remaining higher year over year.
Expenses increased 8% year over year, reflecting higher compensation, technology spending and other strategic investments. Information systems and communications expense rose 15%, while compensation and employee benefits increased 8%.
Capital remained solid, with a CET1 ratio of 11.0%. State Street returned $651 million to shareholders during the quarter, including $400 million of share repurchases and $251 million of dividends.
The 6.4% decline appears to reflect investor concern over the sequential decline in fee revenue and total revenue, together with continued expense growth, despite strong year-over-year earnings growth, record AUC/A and AUM, and improved profitability.
State Street (NYSE: STT) shares fell about 6.4% after the company reported third-quarter 2026 EPS of $3.69, up 33% year over year, on total revenue of $4.0 billion, up 13%. Net income increased 27% to $1.09 billion, while pre-tax margin expanded to 34.6%.
Assets under custody and administration reached a record $59.2 trillion, up 15%, while assets under management rose 16% to a record $6.3 trillion. State Street also reported $429 billion of new servicing AUC/A wins and $68 million of new servicing fee revenue wins during the quarter.
Revenue growth was broad-based. Servicing fees rose 10% year over year, management fees increased 20%, FX trading services rose 17%, and securities finance increased 9%. Net interest income climbed 21%, supported by a 16-basis-point improvement in net interest margin.
However, there were some softer sequential trends. Total fee revenue declined 2% from the second quarter, while total revenue fell 1% quarter over quarter. FX trading services also declined sequentially despite remaining higher year over year.
Expenses increased 8% year over year, reflecting higher compensation, technology spending and other strategic investments. Information systems and communications expense rose 15%, while compensation and employee benefits increased 8%.
Capital remained solid, with a CET1 ratio of 11.0%. State Street returned $651 million to shareholders during the quarter, including $400 million of share repurchases and $251 million of dividends.
The 6.4% decline appears to reflect investor concern over the sequential decline in fee revenue and total revenue, together with continued expense growth, despite strong year-over-year earnings growth, record AUC/A and AUM, and improved profitability.
