State Street Corporation Announces Results of CCAR 2018
June 28 2018 - 5:03PM
Business Wire
State Street Corporation (NYSE:STT) today announced that the
Federal Reserve did not object to the Company's capital plan as
part of the 2018 Comprehensive Capital Analysis and Review (CCAR)
process. The capital plan includes an increase in the common stock
dividend and a new common stock purchase program. In connection
with its non-objection, the Federal Reserve is requiring State
Street to enhance the management and analysis of counterparty
exposures under stress. The Company is not expected to resubmit its
capital plan after completing these enhancements.
Given this year’s severe stress scenario, State Street took a
conservative approach in developing its capital plan submission.
The capital plan includes an increase to the quarterly common stock
dividend to $0.47 per share, from $0.42 per share, beginning in the
third quarter of 2018. State Street’s Board of Directors will
consider this increase in common stock dividend at its regularly
scheduled meeting in July 2018. Additionally, State Street’s Board
has approved a new common stock purchase program authorizing the
purchase of up to $1.2 billion of its common stock. This program
was included in the capital plan submitted in April and will be
effective during the period of July 1, 2018 through June 30,
2019.
State Street’s third quarter 2018 common stock and other stock
dividends, including the declaration, timing and amount thereof,
remain subject to consideration and approval by State Street’s
Board of Directors at the relevant times. The timing of any
repurchases, type of transaction and number of shares purchased
under the newly authorized common stock purchase program will
depend upon various factors, including alternative investment
opportunities, such as merger and acquisition activity, internal
capital generation, market conditions, State Street’s capital
position, the amount of common stock issued as part of employee
compensation programs and other factors. Stock purchases may be
made using various types of transactions, including open-market
purchases, accelerated share repurchases or other transactions off
the market, and may be made under Rule 10b5-1 trading programs. The
common stock purchase program does not have specific price targets
and may be suspended at any time.
About State Street Corporation
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 $33.3 trillion in assets
under custody and administration and $2.7 trillion* in assets under
management as of March 31, 2018, State Street operates in more than
100 geographic markets and employs over 37,000 worldwide. For more
information, visit State Street’s website at
www.statestreet.com.
* Assets under management include the assets of the SPDR® Gold
ETF and the SPDR® Long Dollar Gold Trust ETF (approximately $36
billion as of March 31, 2018), for which State Street Global
Advisors Funds Distributors, LLC (SSGA FD) serves as marketing
agent; SSGA FD and State Street Global Advisors are affiliated.
Forward-Looking Statements
This news release contains forward-looking statements as defined
by United States securities laws, including statements relating to
the content of, and State Street’s goals and expectations
regarding, its capital plan, involving common stock dividends and
purchases, and expectations for returning capital to shareholders.
Forward-looking statements are often, but not always, identified by
such forward-looking terminology as “plan,” “propose,” “will,”
“priority,” “intend,” “expect,” “may,” “objective,” “forecast,”
“outlook,” “believe,” “anticipate,” “estimate,” “seek,” “trend,”
“target,” “strategy” 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 the date of
this news release.
Factors that could cause changes in the expectations or
assumptions on which forward-looking statements are based cannot be
foreseen with certainty and include, but are not limited to:
- requirements to obtain the prior
approval or non-objection of the Federal Reserve or other U.S. and
non-U.S. regulators, including, without limitation, compliance with
Federal Reserve expectations (conveyed to State Street in
connection with CCAR 2018 or thereafter) regarding enhancements to
the management and analysis of counterparty exposures under stress,
for the use, allocation or distribution of the Company’s capital or
other specific capital actions or corporate activities, including,
without limitation, acquisitions, investments in subsidiaries,
dividends and stock purchases, without which State Street’s growth
plans, distributions to shareholders, share repurchase programs or
other capital or corporate initiatives may be restricted;
- changes in State Street’s leverage or
other regulatory capital ratios resulting from increases in client
deposits, interest rates or other factors;
- increases in the volatility of, or
declines in the level of, State Street’s net interest income,
changes in the composition or valuation of the assets recorded in
the Company’s consolidated statement of condition (and State
Street’s ability to measure the fair value of investment
securities) and changes in the manner in which it funds those
assets;
- the liquidity of the U.S. and
international securities markets, particularly the markets for
fixed-income securities and inter-bank credits; the liquidity of
the assets on State Street’s balance sheet and changes or
volatility in the sources of such funding, particularly the
deposits of State Street’s clients; and demands upon our liquidity,
including the liquidity demands and requirements of State Street’s
clients;
- the level and volatility of interest
rates, the valuation of the U.S. dollar relative to other
currencies in which State Street records revenue or accrues
expenses and the performance and volatility of securities, credit,
currency and other markets in the U.S. and internationally; and the
impact of monetary and fiscal policy in the U.S. and
internationally on prevailing rates of interest and currency
exchange rates in the markets in which State Street provides
services to its clients;
- the credit quality, credit-agency
ratings and fair values of the securities in State Street’s
investment securities portfolio, a deterioration or downgrade of
which could lead to other-than-temporary impairment of such
securities and the recognition of an impairment loss in the
Company’s consolidated statement of income;
- State Street’s ability to attract
deposits and other low-cost, short-term funding; State Street’s
ability to manage the level and pricing of such deposits and the
relative portion of our deposits that are determined to be
operational under regulatory guidelines; and the Company’s ability
to deploy deposits in a profitable manner consistent with our
liquidity needs, regulatory requirements and risk profile;
- adverse changes in the regulatory
ratios that State Street is, or will be, required to meet, whether
arising under the Dodd-Frank Act or implementation of international
standards applicable to financial institutions, such as those
proposed by the Basel Committee, 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 the calculation of State Street’s capital or
liquidity ratios that cause changes in those ratios as they are
measured from period to period;
- the results of, and costs associated
with, governmental or regulatory inquiries and investigations,
litigation and similar claims, disputes, or civil or criminal
proceedings;
- the credit agency ratings of State
Street’s debt and depositary obligations and investor and client
perceptions of the Company’s financial strength; and
- adverse publicity, whether specific to
State Street or regarding other industry participants or
industry-wide factors, or other reputational harm.
Other important factors that could cause actual results to
differ materially from those indicated by any forward-looking
statements are set forth in State Street’s 2017 Annual Report on
Form 10-K and the Company’s subsequent SEC filings. Investors are
encouraged 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 should not be relied on as representing the Company’s
expectations or beliefs as of any time subsequent to the time this
news release is first issued, and State Street does not undertake
efforts to revise those forward-looking statements to reflect
events after that time.
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version on businesswire.com: https://www.businesswire.com/news/home/20180628006382/en/
State Street CorporationIlene Fiszel Bieler, +1
617-664-3477orMarc Hazelton, +1 617-513-9439
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