State Street Completes Acquisition of Intesa Sanpaolo’s Securities Services Business

State Street Corporation (NYSE: STT), one of the world’s leading providers of financial services to institutional investors, announced today that it has completed its acquisition of Intesa Sanpaolo’s Securities Services business (ISPSS) for €1.28 billion in cash, financed through available capital. State Street has acquired Intesa Sanpaolo’s custody, fund administration, depository bank and correspondent bank (banca corrispondente) businesses with approximately €369 billion assets under custody as of March 31, 2010. State Street has also acquired approximately €9 billion in cash deposits and will support the acquired ISPSS balance sheet with approximately €450 million of additional capital subject to closing adjustment mechanism. As announced in December 2009, the acquisition is expected to be modestly accretive to State Street’s earnings in 2010 (excluding merger and integration costs).

“This acquisition marks a significant step forward in positioning State Street for continued expansion in high-growth markets and providing comprehensive servicing solutions for our global clients,” said Jay Hooley, president and chief executive officer of State Street. “Given our successful history in meeting or exceeding our goals for acquired companies, we are confident that the addition of ISPSS to State Street will provide our clients, shareholders and employees with ongoing opportunities for growth. We are also delighted to welcome Intesa Sanpaolo’s investment management affiliates, including Eurizon Capital, to our European client roster.”

ISPSS adds approximately €369 billion in assets under custody; 529 employees in Milan, Turin and Luxembourg; enhances State Street’s position to be the largest service provider in Italy and strengthens its presence in Luxembourg. The acquisition also includes a long-term investment servicing agreement with Intesa Sanpaolo to service its investment management affiliates including Eurizon Capital, the largest fund manager in Italy, with approximately €139 billion in assets under management as of March 31, 2010.

State Street Corporation (NYSE: STT) is one of the world's leading providers of financial services to institutional investors, including investment servicing, investment management, and investment research and trading. With $19 trillion in assets under custody and administration and $1.9 trillion in assets under management at March 31, 2010, State Street operates in 25 countries and more than 100 geographic markets worldwide. For more information, visit State Street at www.statestreet.com.

This news release contains forward-looking statements within the meaning of United States securities laws, including statements about our goals and expectations regarding our business, financial condition, results of operations and strategies, the financial and market outlook, governmental and regulatory initiatives and developments, the business environment and other matters that do not relate strictly to historical facts and are based on assumptions by management. Forward-looking statements are often identified by such forward-looking terminology as "plan," "expect," "look," "believe," "anticipate," "estimate," "seek," "may," "will," "trend," "target,” “scenario,” and "goal," or similar terms or variations of such terms. These statements are not guarantees of future performance, are inherently uncertain, are based on current assumptions that are difficult to predict and involve a number of risks and uncertainties. Therefore, actual outcomes and results may differ materially from what is expressed in those statements, and those statements should not be relied upon as representing our expectations or beliefs as of any date subsequent to the date of this news release.

Important factors that may affect future results and outcomes include, but are not limited to:

financial market disruptions and the economic recession, whether in the U.S. or internationally, and monetary and other governmental actions, including regulation, taxes and fees, designed to address or otherwise be responsive to such disruptions and recession, including actions taken in the U.S. and internationally to address the financial and economic disruptions that began in 2007;
increases in the volatility of, or declines in the levels of, our net interest revenue or other revenue influenced by market factors, changes in the composition of the assets on our consolidated balance sheet and the possibility that we may be required to change the manner in which we fund those assets;
the financial strength and continuing viability of the counterparties with which we or our customers do business and to which we have investment, credit or financial exposure;
the liquidity of the U.S. and international securities markets, particularly the markets for fixed-income securities, and the liquidity requirements of our customers;
the credit quality, credit agency ratings, and fair values of the securities in our investment securities portfolio, a deterioration or downgrade of which could lead to other-than-temporary impairment of the respective securities and the recognition of an impairment loss in our consolidated statement of income;
the maintenance of credit agency ratings for our debt and depository obligations as well as the level of credibility of credit agency ratings;
the ability to complete our announced and pending acquisitions, as well as future acquisitions, divestitures and joint ventures, including the ability to obtain regulatory approvals, the ability to arrange financing as required, and the ability to satisfy other closing conditions;
the risks that acquired businesses will not be integrated successfully, or that the integration will take longer than anticipated, that expected synergies will not be achieved or unexpected disynergies will be experienced, that customer and deposit retention goals will not be met, that other regulatory or operational challenges will be experienced and that disruptions from the transaction will harm relationships with customers, employees or regulators;
the possibility of our customers incurring substantial losses in investment pools where we act as agent, and the possibility of general reductions in the valuation of customer assets under our management;
our ability to attract deposits and other low-cost, short-term funding;
potential changes to the competitive environment, including changes due to the effects of consolidation and perceptions of State Street as a suitable service provider or counterparty;
the level and volatility of interest rates and the performance and volatility of securities, credit, currency and other markets in the U.S. and internationally;
our ability to measure the fair value of the investment securities on our consolidated balance sheet;
the results of litigation, government investigations and similar disputes or proceedings;
the enactment of new legislation and changes in governmental regulation and enforcement that affect us or our customers, and which may increase our costs and expose us to risk related to compliance;
current proposals for legislative and regulatory changes that may impose special taxes or assessments on us, change the activities in which we are permitted to engage or change the standard of liability for certain services that we provide;
adverse publicity or other reputational harm;
the performance and demand for the products and services we offer, including the level and timing of withdrawals from our collective investment products;
our ability to grow revenue, attract and/or retain and compensate highly skilled people, control expenses and attract the capital necessary to achieve our business goals and comply with regulatory requirements;
our ability to control operating risks, information technology systems risks and outsourcing risks, and our ability to protect our intellectual property rights, the possibility of errors in the quantitative models we use to manage our business and the possibility that our controls will fail or be circumvented;
changes in accounting standards and practices; and
changes in tax legislation and in the interpretation of existing tax laws by U.S. and non-U.S. tax authorities that impact the amount of taxes due.

Other important factors that could cause actual results to differ materially from those indicated by any forward-looking statements are set forth in our 2009 Annual Report on Form 10-K and our subsequent SEC filings. We encourage investors to read these filings, particularly the sections on Risk Factors, for additional information with respect to any forward-looking statements and prior to making any investment decision. The forward-looking statements contained in this news release speak only as of the date hereof, May 17, 2010, and we do not undertake efforts to revise those forward-looking statements to reflect events after that date.

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