In announcing today's financial results, Joseph L. Hooley, State
Street's chairman, president and chief executive officer, said,
“The first-quarter results reflect good performance and our
continued commitment to delivering value-added solutions to our
clients across our asset servicing and asset management businesses.
The strength in the equity markets, combined with higher volumes
and increased volatility in foreign-exchange trading, supported our
fee revenue. We continue to control expenses across the
organization and generate benefits from our transformation program.
As a result, we achieved positive operating leverage as compared to
the year-ago quarter.
"Overall, the environment continues to show signs of gradual
improvement as reflected by investors shifting into equities.
However, given the ongoing fragile state of the global markets, we
continue to remain cautious for 2013.
"We continue to prioritize the return of capital to our
shareholders. During the first quarter of 2013, we completed the
final phase of our $1.8 billion common stock purchase program
announced in March 2012 with the purchase of approximately $360
million of our common stock. In March 2013, State Street's Board of
Directors approved a $2.1 billion common stock purchase program
following the Federal Reserve's 2013 Comprehensive Capital Analysis
and Review (CCAR) process, reflecting our continued strong capital
position. We also increased our common stock dividend by $0.02 to
$0.26 per share during the quarter."
First-Quarter 2013 GAAP Results
- Earnings per common share (EPS)
of $0.98 decreased from $1.00 in the fourth quarter of 2012 and
increased from $0.85 in the first quarter of 2012. EPS included the
effects of $118 million and $105 million in the first quarter of
2013 and first quarter of 2012, respectively, of equity incentive
compensation expense for retirement-eligible employees and payroll
taxes.
- Net income available to common
shareholders of $455 million decreased from $468 million in the
fourth quarter of 2012 and increased from $417 million in the first
quarter of 2012.
- Revenue of $2.44 billion
decreased 1% from the fourth quarter of 2012 and increased 1% from
the first quarter of 2012.
- Net interest revenue of $576
million decreased from $622 million in the fourth quarter of 2012
and decreased from $625 million in the first quarter of 2012.
- Expenses of $1.83 billion
decreased from $1.86 billion in the fourth quarter of 2012 and
decreased from $1.84 billion in the first quarter of 2012.
- Return on average common
shareholders' equity (ROE) of 9.1% decreased from 9.3% in the
fourth quarter of 2012 and increased from 8.8% in the first quarter
of 2012.
First-Quarter 2013 Operating-Basis (Non-GAAP)
Results(1)
- EPS of $0.96 decreased 14% from
$1.11 in the fourth quarter of 2012 and increased 14% from $0.84 in
the first quarter of 2012. EPS included the effects of $118 million
and $105 million in the first quarter of 2013 and first quarter of
2012, respectively, of equity incentive compensation expense for
retirement-eligible employees and payroll taxes.
- Net income available to common
shareholders of $443 million decreased from $521 million in the
fourth quarter of 2012 and increased from $410 million in the first
quarter of 2012.
- Revenue of $2.47 billion
increased from $2.46 billion in the fourth quarter of 2012 and
increased from $2.42 billion in the first quarter of 2012.
- Net interest revenue on a fully
taxable-equivalent basis, and excluding conduit-related discount
accretion of $31 million, was $577 million, a decrease from $600
million in the fourth quarter of 2012 excluding $52 million of
conduit-related discount accretion, and a decrease from $607
million in the first quarter of 2012 excluding $49 million of
conduit-related discount accretion.
- Expenses of $1.81 billion
increased from $1.71 billion in the fourth quarter of 2012 and
increased from $1.80 billion in the first quarter of 2012.
- ROE of 8.9% decreased from 10.3%
in the fourth quarter of 2012 and increased from 8.6% in the first
quarter of 2012.
First-Quarter 2013 Operating-Basis (Non-GAAP)
Highlights(1)
- New Business: Awarded $223
billion in asset servicing mandates and had $5 billion in net new
assets to be managed at SSgA.
- Business Operations and Information
Technology Transformation program(2): The total
incremental pre-tax expense savings in 2013, including the first
quarter, are expected to be approximately $220 million.
- Achieved positive operating
leverage(3) of 145 basis points compared to the fourth
quarter of 2012, excluding the $118 million of expense related to
equity incentive compensation for retirement-eligible employees and
payroll taxes. Compared to the first quarter of 2012, the Company
achieved positive operating leverage of 130 basis points.
- Capital(4):
Estimated pro forma tier 1 common ratio under the June 2012 U.S.
Basel III Notices of Proposed Rulemaking (NPRs) was 10.6% as of
March 31, 2013.
- Common stock purchases and
dividends: Purchased approximately $360 million of our common
stock at an average price of $54.95 per share and declared a
quarterly common stock dividend of $0.26 per share.
- Results of recently completed 2013
CCAR demonstrated our continued strong capital position. After
successfully completing the annual CCAR process in March 2013, the
Board of Directors approved a new common stock purchase program
authorizing the purchase of up to $2.1 billion of our common stock
through March 31, 2014(5).
(1) Operating basis is a non-GAAP presentation. For an
explanation of operating-basis information and related
reconciliations, refer to the addendum included with this news
release.
(2) Estimated pre-tax expense savings relate only to the
Business Operations and Information Technology Transformation
program and are based on projected improvement from total 2010
operating-basis expenses. Actual total expenses of the Company have
increased since 2010, and may increase or decrease in the future,
due to other factors.
(3) Operating leverage is defined as the rate of growth of total
revenue less the rate of growth of total expenses, each as
determined on an operating basis.
(4) Unless otherwise specified, all capital ratios referenced in
this news release refer to State Street Corporation and not State
Street Bank and Trust Company. Refer to the addendum included with
this news release for a further discussion of these ratios and for
reconciliations applicable to the tier 1 common ratio. Also, see
"Capital" below.
(5) Common stock purchases may be made in various types of
transactions, including open-market purchases or transactions off
the market, and may be made under Rule 10b5-1 trading programs. The
timing of common stock purchases and the number of shares purchased
will depend on several factors, including market conditions, State
Street's regulatory capital position, its financial performance and
investment opportunities. The common stock purchase program does
not have specific price targets and may be suspended at any
time.
Non-GAAP Financial Measures
In addition to presenting State Street's financial results in
conformity with U.S. generally accepted accounting principles
(GAAP), management also presents results on a non-GAAP, or
operating basis, in order to highlight comparable financial trends
and other characteristics with respect to State Street's business
operations from period to period. Descriptions of our non-GAAP, or
operating-basis financial measures, together with reconciliations
of operating-basis information to GAAP-basis information, are
provided in the addendum included with this news release.
The table below provides a summary of selected financial
information and key ratios for the indicated periods, presented on
an operating (non-GAAP) basis where noted. Amounts are presented in
millions of dollars, except for per-share amounts or where
otherwise noted.
Financial Highlights(1)
% Increase
% Increase
(Dollars in millions)
Q1 2013 Q4 2012
(Decrease) Q1 2012 (Decrease)
Total revenue(1)
$
2,470
$ 2,463 0.3 % $ 2,421 2.0 % Total expenses(1)
1,812
1,714 5.7 1,799 0.7
Net income available to common
shareholders(1)
443
521 (15.0 ) 410 8.0 Earnings per common share(1)
0.96
1.11 (13.5 ) 0.84 14.3
Return on average common equity(1)
8.9
%
10.3
%
(140) bps
8.6
%
30 bps
Total assets at period-end
$
218,189
$
222,582
(2.0
)%
$
187,956
16.1
%
Quarterly average total assets
208,265
202,051 3.1 188,178 10.7 Net interest margin(1)
1.31
% 1.36 % (5) bps 1.52 % (21) bps
Net unrealized gain (loss) on investment
portfolio, after-tax at period-end
$
817
$ 698 $ (81 )
(1) Presented on an operating basis, a non-GAAP presentation.
Refer to the addendum included with this news release for
explanations of our non-GAAP financial measures and for
reconciliations of our operating-basis financial information. Total
revenue for the first quarter of 2012 presented in the table has
been adjusted, for comparative purposes, from amounts previously
reported to include tax-equivalent adjustments to processing fees
and other revenue related to tax credits generated by
tax-advantaged investments.
Assets Under Custody and Administration
and Assets Under Management
(Dollars in billions)
Q1 2013
Q4 2012
% Increase(Decrease)
Q1 2012
% Increase(Decrease)
Assets under custody and administration(1) (2)
$
25,422 $ 24,371 4.3 % $ 23,208
9.5 % Assets under management(2)
$ 2,176 $ 2,086 4.3
$ 1,980 9.9
Market Indices
S&P 500® daily average
1,514 1,418 6.8 1,349 12.2
MSCI EAFE® daily average
1,668 1,544 8.0 1,516 10.0
S&P 500® average of month-end
1,527 1,418 7.7 1,362 12.1
MSCI EAFE® average of month-end
1,676 1,561 7.4 1,536 9.1
(1) Includes assets under custody of $18.588 trillion, $17.806
trillion and $16.912 trillion, as of period-end Q1 2013, Q4 2012
and Q1 2012, respectively.
(2) As of period-end.
The following table provides the components of operating-basis
(non-GAAP) revenue(1) for the periods noted:
(Dollars in millions)
Q1 2013
Q4 2012
% Increase(Decrease)
Q1 2012
% Increase(Decrease)
Servicing fees
$ 1,175 $ 1,150 2.2 % $ 1,078 9.0 %
Management fees
263 260 1.2 236 11.4 Trading services
revenue: Foreign-exchange trading
146 118 23.7 149 (2.0 )
Brokerage and other fees
135 125
8.0 131 3.1 Total trading
services revenue
281 243 15.6 280 0.4 Securities finance
revenue
78 74 5.4 97 (19.6 ) Processing fees and other
revenue(1) (2)
94 115 (18.3 ) 112 (16.1 )
Net interest revenue, fully
taxable-equivalent basis(1) (3)
577 600 (3.8 ) 607 (4.9 ) Gains (Losses) related to
investment securities, net
2 21
(90.5 ) 11 (81.8 )
Total Operating-Basis
Revenue(1) $ 2,470 $ 2,463
0.3 % $ 2,421 2.0 %
(1) Refer to the addendum included with this news release for
explanations of our non-GAAP financial measures and for
reconciliations of our operating-basis financial information.
(2) Processing fees and other revenue for the first quarter of
2013, fourth quarter of 2012 and first quarter of 2012, presented
in the table, included tax-equivalent adjustments of $34 million,
$36 million and $18 million, respectively, related to tax credits
generated by tax-advantaged investments. GAAP-basis processing fees
and other revenue for these periods was $60 million, $79 million
and $94 million, respectively. The amount previously reported for
the first quarter of 2012 has been adjusted for comparative
purposes.
(3) Net interest revenue for the first quarter of 2013, fourth
quarter of 2012 and first quarter of 2012, presented in the table,
included tax-equivalent adjustments of $32 million, $30 million and
$31 million, respectively, and excluded conduit-related discount
accretion of $31 million, $52 million and $49 million,
respectively. GAAP-basis net interest revenue for these periods was
$576 million, $622 million and $625 million, respectively. The
Company expects to record aggregate pre-tax conduit-related
accretion of approximately $684 million in interest revenue from
April 1, 2013 through the remaining lives of the former conduit
securities. This expectation is based on numerous assumptions,
including holding the securities to maturity, anticipated
pre-payment speeds, credit quality and sales.
Servicing fees increased 2.2% to $1.2 billion in the
first quarter of 2013 from the fourth quarter of 2012, due to
stronger global equity markets and higher transaction volumes.
Compared to the first quarter of 2012, servicing fees increased
9.0%, due to stronger global equity markets, net new business, and
the acquired Goldman Sachs Administration Services business.
Management fees increased to $263 million in the first
quarter of 2013 from $260 million in the fourth quarter of 2012,
due to stronger global equity markets and net new business
partially offset by lower performance fees. Compared to the first
quarter of 2012, management fees increased 11.4%, primarily due to
stronger equity markets and net new business.
Trading services revenue, which includes foreign-exchange
trading revenue and brokerage and other fees, was $281 million in
the first quarter of 2013, up 15.6% from the fourth quarter of 2012
due to strength in foreign-exchange and electronic trading.
Foreign-exchange revenue increased 23.7% from the fourth
quarter of 2012 due to higher volumes and volatilities.
Foreign-exchange revenue decreased 2.0% from the first quarter of
2012 due to lower volatilities partially offset by higher volumes.
Brokerage and other fees increased 8.0% to $135 million from
the fourth quarter of 2012 due to increased electronic trading.
Securities finance revenue was $78 million in the first
quarter of 2013, an increase of 5.4% from the fourth quarter of
2012 due to slightly higher volumes. Securities finance revenue
decreased 19.6% from the first quarter of 2012 due to lower spreads
and volumes.
Processing fees and other revenue in the first quarter of
2013 decreased 18.3% from the fourth quarter of 2012, primarily due
to a gain of $10 million from the sale of a Lehman Brothers-related
asset recorded in the fourth quarter of 2012. Processing fees and
other revenue in the first quarter of 2013 decreased 16.1% from the
first quarter of 2012, primarily due to a $24 million positive
fair-value adjustment recorded in the first quarter of 2012 related
to our withdrawal from the fixed-income trading initiative.
Fully taxable-equivalent net interest revenue of $577
million in the first quarter of 2013 decreased 3.8% from $600
million in the fourth quarter of 2012 due to lower yields on
earning assets. Fully taxable-equivalent net interest revenue in
the first quarter of 2013 decreased 4.9% from $607 million in the
first quarter of 2012 due to lower yields on earning assets
partially offset by lower liability costs.
Net interest margin, including balances held at the
Federal Reserve and other central banks, declined to 131 basis
points in the first quarter of 2013 from 136 basis points in the
fourth quarter of 2012 and from 152 basis points in the first
quarter of 2012, due to lower yields on earning assets and higher
levels of client deposits.
The following table provides the components of operating-basis
(non-GAAP)(1) expenses for the periods noted:
(Dollars in millions)
Q1 2013
Q4 2012
% Increase(Decrease)
Q1 2012
% Increase(Decrease)
Compensation and employee benefits
$ 1,035 $ 915 13.1
% $ 1,064 (2.7 )% Information systems and communications
237
234 1.3 191 24.1 Transaction processing services
180 179 0.6
181 (0.6 ) Occupancy
116 121 (4.1 ) 119 (2.5 ) Other
244 265 (7.9 ) 244
—
Total Operating-Basis Expenses(1) $
1,812 $ 1,714 5.7 % $ 1,799 0.7
%
(1) Refer to the addendum included with this news release for
explanations of our non-GAAP financial measures and for
reconciliations of our operating-basis financial information.
Compensation and employee benefits expenses increased
13.1% in the first quarter of 2013 from the fourth quarter of 2012,
due to the effect of the $118 million of equity incentive
compensation for retirement-eligible employees and payroll taxes.
Compared to the first quarter of 2012, compensation and employee
benefits decreased 2.7%, partially due to savings associated with
the execution of the Business Operations and Information Technology
Transformation program.
Information systems and communications expenses were $237
million in the first quarter of 2013, up 1.3% from the fourth
quarter of 2012. Compared to the first quarter of 2012, information
systems and communications expenses were up 24.1% due to costs
related to transition activities in connection with the Business
Operations and Information Technology Transformation program.
Other expenses decreased 7.9% to $244 million in the
first quarter of 2013 from $265 million in the fourth quarter of
2012 due to lower professional fees partially offset by a $14
million one-time Lehman-related client recovery recorded in the
fourth quarter of 2012.
Income Taxes
The effective tax rate on first-quarter 2013 GAAP
earnings was 23.8%, up from 19.9% in the fourth quarter of 2012,
primarily due to the net tax impact of Italian tax audits reflected
in the fourth quarter of 2012. The effective tax rate on
operating-basis earnings for the first quarter of 2013 was 23.6%,
in line with 23.5% in the fourth quarter of 2012, and down from
26.6% in the first quarter of 2012, due primarily to an increase in
renewable energy investments in 2013.
Capital
Capital
ratios(1):
March 31,2013
December 31,2012
bps Increase(Decrease)
March 31,2012
bps Increase(Decrease)
Total capital ratio
19.2 % 20.6 % (140) bps 20.7 %
(150) bps Tier 1 capital ratio
18.0 19.1 (110) bps 19.1
(110) bps Tier 1 leverage ratio
6.9 7.1 (20) bps 7.8 (90)
bps Tier 1 common ratio
16.1 17.1 (100) bps 17.2 (110) bps
Estimated pro forma tier 1 common ratio
under Basel III NPRs, including impact of SSFA(2)
10.6
10.8
(20) bps
N/A
N/A
TCE ratio
7.1 7.2 (10) bps 7.5 (40) bps
(1) Unless otherwise specified, all capital ratios referenced in
the table above and elsewhere in this news release refer to State
Street Corporation and not State Street Bank and Trust Company.
Refer to the addendum included with this news release for a further
description of these ratios, and for reconciliations applicable to
the tier 1 common and tangible common equity, or TCE, ratios
presented in this table. All ratios are presented as of
period-end.
(2) The estimated pro-forma Basel III capital ratios reflect the
impact estimated by State Street of the NPRs issued by federal
banking regulators in June 2012 regarding capital, primarily the
application of the Simplified Supervisory Formula Approach (SSFA)
to the investment portfolio. The NPRs are not final and are subject
to change. Estimated Basel III capital ratio as of March 31, 2013
reflects calculations and determinations with respect to our
capital and related matters as of March 31, 2013, based on State
Street and external data, quantitative formulae, statistical
models, historical correlations and assumptions (collectively,
“advanced systems”) in effect and used by our advanced systems for
those purposes as of April 19, 2013. Significant components of
these advanced systems involve the exercise of judgment by us and
our regulators, and our advanced systems may not accurately
represent or calculate the scenarios, circumstances, outputs or
other results for which they are designed or intended. Due to the
influence of changes in our advanced systems, whether resulting
from changes in data inputs, regulation or regulatory supervision
or interpretation, State Street-specific or market activities or
experiences or other updates or factors, we expect that our
advanced systems and our capital ratios calculated under the Basel
III standards will change and may be volatile over time, and that
those latter changes or volatility could be material as calculated
and measured from period to period. Refer to the addendum included
with this news release for information concerning the specified
capital ratios and for reconciliations of our estimated pro-forma
Basel III tier 1 common ratios to the tier 1 common ratio
calculated using currently applicable regulatory requirements under
Basel I rules.
N/A Not applicable.
The estimated pro forma Basel III tier 1 common ratio as
of March 31, 2013 was 10.6% which includes the estimated impact of
the Basel III NPRs on the risk-weightings of the investment
portfolio. This estimate would be 11.4% as of March 31, 2013, if
adjusted on a pro forma basis to give effect as of that date to all
of the projected run-off and reinvestment of our investment
portfolio assets affected by the SSFA through January 1, 2015.
Refer to note (2) in the table above for further information.
Common Stock Dividend and Share Purchase Program
The Company purchased approximately 6.5 million shares of its
common stock at a total cost of approximately $360 million and an
average price of $54.95 per share in the first quarter of 2013 and
also declared a quarterly common stock dividend of $0.26 per share.
In March 2013, the Board of Directors approved a new common stock
purchase program authorizing the purchase of up to $2.1 billion of
our common stock through March 31, 2014, reinforcing the Company's
priority to return capital to its shareholders. This new common
stock purchase program authorization follows the 2013 CCAR process
under which the Federal Reserve reviewed State Street's 2013
capital plan and did not object to the Company's requested capital
actions. The 2013 authorization represents an increase from the
$1.8 billion 2012 common stock purchase program previously
authorized and executed from April 2012 through February 2013.
Preferred Stock Dividends
In the first quarter of 2013, the Company declared a quarterly
cash dividend on its non-cumulative perpetual preferred stock,
Series C (represented by depositary shares, each representing a
1/4000th interest in a share of Series C preferred stock) of
$1,312.50 per Series C share (resulting in a distribution of
$0.3281 per depositary share), payable on March 15, 2013 to the
holders of record of the Series C preferred stock at the close of
business on February 28, 2013.
Additional Information
All earnings per share amounts represent fully diluted earnings
per common share. Return on average common shareholders' equity is
determined by dividing annualized net income available to common
equity by average common shareholders' equity for the period.
Operating-basis return on average common equity utilizes annualized
operating-basis net income available to common equity in the
calculation.
Investor Conference Call
State Street will webcast an investor conference call today,
Friday, April 19, 2013, at 9:30 a.m. EDT, available at
www.statestreet.com/stockholder. The conference call will also be
available via telephone, at +1 888/391-4233 in the U.S. or at +1
706/679-5594 outside of the U.S. The Conference ID is #28538936.
Recorded replays of the conference call will be available on the
web site, and by telephone at +1 855/859-2056 inside the U.S. or at
+1 404/537-3406 outside the U.S. beginning approximately two hours
after the call's completion. The Conference ID is #28538936. The
telephone replay will be available for approximately two weeks
following the conference call. This news release, presentation
materials referred to on the conference call (including those
concerning our investment portfolio), and additional financial
information are available on State Street's website, at
www.statestreet.com/stockholder under “Investor Relations--Investor
News & Events" and under the title “Events and
Presentations.”
State Street Corporation (NYSE: STT) is the world's leading
provider of financial services to institutional investors including
investment servicing, investment management and investment research
and trading. With $25.42 trillion in assets under custody and
administration and $2.18 trillion in assets under management as of
March 31, 2013, State Street operates globally in more than 100
geographic markets and employs 29,460 worldwide. For more
information, visit State Street's website at www.statestreet.com or
call +1 877/639-7788 [NEWS STT] toll-free in the United States and
Canada, or +1 678/999-4577 outside those countries.
Forward-Looking
Statements
This news release contains forward-looking statements as defined
by United States securities laws, including statements relating to
our goals and expectations regarding our business, financial and
capital condition (including without limitation, our capital ratios
under Basel III), results of operations, investment portfolio
performance and strategies, the financial and market outlook,
governmental and regulatory initiatives and developments, and the
business environment. Forward-looking statements are often, but not
always, identified by such forward-looking terminology as "plan,"
"expect," "look," "believe," "anticipate," "estimate," "seek,"
"may," "will," "trend," "target,” and "goal," or similar statements
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 April 19,
2013.
Important factors that may affect future results and outcomes
include, but are not limited to:
- the financial strength and continuing
viability of the counterparties with which we or our clients do
business and to which we have investment, credit or financial
exposure, including, for example, the direct and indirect effects
on counterparties of the current sovereign-debt risks in Europe and
other regions;
- financial market disruptions or
economic recession, whether in the U.S., Europe, Asia or other
regions;
- increases in the volatility of, or
declines in the level of, our net interest revenue, changes in the
composition of the assets recorded in our consolidated statement of
condition (and our ability to measure the fair value of investment
securities) and the possibility that we may change the manner in
which we fund those assets;
- the liquidity of the U.S. and
international securities markets, particularly the markets for
fixed-income securities and inter-bank credits, and the liquidity
requirements of our clients;
- 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;
- 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;
- our ability to attract deposits and
other low-cost, short-term funding, and our ability to deploy
deposits in a profitable manner consistent with our liquidity
requirements and risk profile;
- the manner and timing with which the
Federal Reserve and other U.S. and foreign regulators implement the
Dodd-Frank Act, the Basel II and Basel III capital and liquidity
standards, and European legislation with respect to the levels of
regulatory capital we must maintain, our credit exposure to third
parties, margin requirements applicable to derivatives, banking and
financial activities and other regulatory initiatives in the U.S.
and internationally, including regulatory developments that result
in changes to our structure or operating model, increased costs or
other changes to how we provide services;
- adverse changes in the regulatory
capital ratios that we are required to meet, whether arising under
the Dodd-Frank Act, the Basel II or Basel III capital and liquidity
standards or due to changes in regulatory positions, practices or
regulations in jurisdictions in which we engage in banking
activities, including changes in internal or external data,
formulae, models, assumptions or other advanced systems used in
calculating our capital ratios that cause changes in those ratios
as they are measured from period to period;
- increasing requirements to obtain the
prior approval of the Federal Reserve or our other regulators for
the use, allocation or distribution of our capital or other
specific capital actions or programs, including acquisitions,
dividends and equity purchases, without which our growth plans,
distributions to shareholders, equity purchase programs or other
capital initiatives may be restricted;
- changes in law or regulation that may
adversely affect our business activities or those of our clients or
our counterparties, and the products or services that we sell,
including additional or increased taxes or assessments thereon,
capital adequacy requirements, margin requirements and changes that
expose us to risks related to the adequacy of our controls or
compliance programs;
- our ability to promote a strong culture
of risk management, operating controls, compliance oversight and
governance that meet our expectations or those of our clients and
our regulators;
- the credit agency ratings of our debt
and depository obligations and investor and client perceptions of
our financial strength;
- delays or difficulties in the execution
of our previously announced Business Operations and Information
Technology Transformation program, which could lead to changes in
our estimates of the charges, expenses or savings associated with
the planned program and may cause volatility of our earnings;
- the results of, and costs associated
with, government investigations, litigation, and similar claims,
disputes, or proceedings;
- the possibility that our clients will
incur substantial losses in investment pools for which we act as
agent, and the possibility of significant reductions in the
valuation of assets underlying those pools;
- adverse publicity or other reputational
harm;
- dependencies on information technology,
complexities and costs of protecting the security of our systems
and difficulties with protecting our intellectual property
rights;
- our ability to grow revenue, control
expenses, attract and retain highly skilled people and raise the
capital necessary to achieve our business goals and comply with
regulatory requirements;
- potential changes to the competitive
environment, including changes due to regulatory and technological
changes, the effects of industry consolidation, and perceptions of
State Street as a suitable service provider or counterparty;
- potential changes in how and in what
amounts clients compensate us for our services, and the mix of
services provided by us that clients choose;
- the ability to complete acquisitions,
joint ventures and divestitures, including the ability to obtain
regulatory approvals, the ability to arrange financing as required
and the ability to satisfy closing conditions;
- the risks that acquired businesses and
joint ventures will not achieve their anticipated financial and
operational benefits or 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 client 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 our
relationships with our clients, our employees or regulators;
- our ability to recognize emerging needs
of our clients and to develop products that are responsive to such
trends and profitable to us, the performance of and demand for the
products and services we offer, and the potential for new products
and services to impose additional costs on us and expose us to
increased operational risk;
- our ability to anticipate and manage
the level and timing of redemptions and withdrawals from our
collateral pools and other collective investment products;
- our ability to control operating risks,
data security breach 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 prove insufficient, 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 affect 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 2012 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, April 19, 2013, and we do not undertake efforts to revise
those forward-looking statements to reflect events after that
date.
Photos/Multimedia Gallery Available:
http://www.businesswire.com/multimedia/home/20130419005322/en/
State Street (NYSE:STT)
Historical Stock Chart
From Jun 2024 to Jul 2024
State Street (NYSE:STT)
Historical Stock Chart
From Jul 2023 to Jul 2024