State Street Corp. Announces Planned Increase to its Quarterly Common Stock Dividend to $0.52 per Share & an Authorization to...
June 27 2019 - 4:33PM
Business Wire
State Street Corporation (NYSE:STT) today announced that the
Federal Reserve did not object to the Company's capital plan,
reviewed as part of the 2019 Comprehensive Capital Analysis and
Review (CCAR) process. The capital plan includes a proposed common
stock dividend increase and a new common stock purchase
program.
“We are pleased with today’s CCAR results. The balance sheet
repositioning work that we undertook last year, coupled with our
strong capital position, has enabled us to deliver on our priority
to significantly increase capital return to our shareholders,” said
President and CEO Ron O’Hanley.
State Street’s capital plan proposes an increase to the
quarterly common stock dividend to $0.52 per share, from $0.47 per
share, beginning in the third quarter of 2019. State Street’s Board
of Directors will consider this increase in common stock dividend
at its regularly scheduled board meeting in September 2019.
Additionally, State Street’s Board has approved a new common stock
purchase program, authorizing the purchase of up to $2.0 billion of
its common stock that was included in the capital plan. The program
will be effective July 1, 2019 and extend through June 30,
2020.
State Street’s third quarter 2019 common stock and other stock
dividends, including the declaration, timing and amount, remain
subject to consideration and approval by State Street’s Board of
Directors at the relevant times. State Street may commence
purchases of its common stock under the new authorization beginning
July 1, 2019. 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 timing of stock purchases,
type of transaction and number of shares purchased will depend on
several factors, including market conditions and State Street’s
capital position, its financial performance, the amount of common
stock issued as part of employee compensation programs and
investment opportunities. 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 a world leading provider of financial services to
institutional investors including investment servicing, investment
management and investment research and trading. With $32.6 trillion
in assets under custody and administration and $2.8 trillion* in
assets under management as of March 31, 2019, State Street operates
globally in more than 100 geographic markets and employs
approximately 40,000 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 $33
billion as of March 31, 2019), 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 within the meaning of United States
securities laws, including statements about our goals and
expectations regarding our business, financial and capital
condition, results of operations, strategies, the financial and
market outlook, dividend and stock purchase programs, 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 “outlook,”
“guidance,” “expect,” “priority,” “propose,” “objective,” “intend,”
“plan,” “forecast,” “believe,” “anticipate,” “estimate,” “seek,”
“may,” “will,” “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 time
subsequent to the time this News Release is first issued.
Important factors that may affect future results and outcomes
include, but are not limited to:
- the financial strength of the counterparties with which we or
our clients do business and to which we have investment, credit or
financial exposures or to which our clients have such exposures as
a result of our acting as agent, including as an asset manager or
securities lending agent;
- increases in the volatility of, or declines in the level of,
our NII, changes in the composition or valuation of the assets
recorded in our consolidated statement of condition (and our
ability to measure the fair value of investment securities) and
changes in the manner in which we fund those assets;
- the volatility of servicing fee, management fee, trading fee
and securities finance revenues due to, among other factors, the
value of equity and fixed-income markets, market interest and
foreign exchange rates, the volume of client transaction activity,
competitive pressures in the investment servicing and asset
management industries, and the timing of revenue recognition with
respect to processing fees and other revenues;
- 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 our balance sheet and
changes or volatility in the sources of such funding, particularly
the deposits of our clients; and demands upon our liquidity,
including the liquidity demands and requirements of our
clients;
- the level and volatility of interest rates, the valuation of
the U.S. dollar relative to other currencies in which we record
revenue or accrue 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 we provide services
to our clients;
- 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 such 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; our 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 our
ability to deploy deposits in a profitable manner consistent with
our liquidity needs, regulatory requirements and risk profile;
- the manner and timing with which the Federal Reserve and other
U.S. and non-U.S. regulators implement or reevaluate the regulatory
framework applicable to our operations (as well as changes to that
framework), including implementation or modification of the
Dodd-Frank Act and related stress testing and resolution planning
requirements, implementation of international standards applicable
to financial institutions, such as those proposed by the Basel
Committee and European legislation (such as UCITS V, the Money
Market Fund Regulation and MiFID II / MiFIR); among other
consequences, these regulatory changes impact the levels of
regulatory capital, long-term debt and liquidity we must maintain,
acceptable levels of credit exposure to third parties, margin
requirements applicable to derivatives, restrictions on banking and
financial activities and the manner in which we structure and
implement our global operations and servicing relationships. In
addition, our regulatory posture and related expenses have been and
will continue to be affected by heightened standards and changes in
regulatory expectations for global systemically important financial
institutions applicable to, among other things, risk management,
liquidity and capital planning, resolution planning and compliance
programs, as well as changes in governmental enforcement approaches
to perceived failures to comply with regulatory or legal
obligations;
- adverse changes in the regulatory ratios that we are, 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 our capital or
liquidity ratios that cause changes in those ratios as they are
measured from period to period;
- requirements to obtain the prior approval or non-objection of
the Federal Reserve or other U.S. and non-U.S. regulators for the
use, allocation or distribution of our capital or other specific
capital actions or corporate activities, including, without
limitation, acquisitions, investments in subsidiaries, dividends
and stock repurchases, without which our growth plans,
distributions to shareholders, share repurchase programs or other
capital or corporate initiatives may be restricted;
- changes in law or regulation, or the enforcement of 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, without limitation, 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;
- economic or financial market disruptions in the U.S. or
internationally, including those which may result from recessions
or political instability; for example, the U.K.'s exit from the
European Union or actual or potential changes in trade policy, such
as tariffs or bilateral and multilateral trade agreements;
- our ability to create cost efficiencies through changes in our
operational processes and to further digitize our processes and
interfaces with our clients, any failure of which, in whole or in
part, may among other things, reduce our competitive position,
diminish the cost-effectiveness of our systems and processes or
provide an insufficient return on our associated investment;
- our ability to promote a strong culture of risk management,
operating controls, compliance oversight, ethical behavior and
governance that meets our expectations and those of our clients and
our regulators, and the financial, regulatory, reputational and
other consequences of our failure to meet such expectations;
- the impact on our compliance and controls enhancement programs
associated with the appointment of a monitor under the deferred
prosecution agreement with the DOJ and compliance consultant
appointed under a settlement with the SEC, including the potential
for such monitor and compliance consultant to require changes to
our programs or to identify other issues that require substantial
expenditures, changes in our operations, payments to clients or
reporting to U.S. authorities;
- the results of our review of our billing practices, including
additional findings or amounts we may be required to reimburse
clients, as well as potential consequences of such review,
including damage to our client relationships or our reputation and
adverse actions or penalties imposed by governmental
authorities;
- our ability to expand our use of technology to enhance the
efficiency, accuracy and reliability of our operations and our
dependencies on information technology; to replace and consolidate
systems, particularly those relying upon older technology, and to
adequately incorporate resiliency and business continuity into our
systems management; to implement robust management processes into
our technology development and maintenance programs; and to control
risks related to use of technology, including cyber-crime and
inadvertent data disclosures;
- our ability to address threats to our information technology
infrastructure and systems (including those of our third-party
service providers), the effectiveness of our and our third party
service providers' efforts to manage the resiliency of the systems
on which we rely, controls regarding the access to, and integrity
of, our and our clients' data, and complexities and costs of
protecting the security of such systems and data;
- the results of, and costs associated with, governmental or
regulatory inquiries and investigations, litigation and similar
claims, disputes, or civil or criminal proceedings;
- changes or potential changes in the amount of compensation we
receive from clients for our services, and the mix of services
provided by us that clients choose;
- the large institutional clients on which we focus are often
able to exert considerable market influence and have diverse
investment activities, and this, combined with strong competitive
market forces, subjects us to significant pressure to reduce the
fees we charge, to potentially significant changes in our AUC/A or
our AUM in the event of the acquisition or loss of a client, in
whole or in part, and to potentially significant changes in our
revenue in the event a client re-balances or changes its investment
approach, re-directs assets to lower- or higher-fee asset classes
or changes the mix of products or services that it receives from
us;
- the potential for losses arising from our investments in
sponsored investment funds;
- the possibility that our clients will incur substantial losses
in investment pools for which we act as agent, the possibility of
significant reductions in the liquidity or valuation of assets
underlying those pools and the potential that clients will seek to
hold us liable for such losses; and the possibility that our
clients or regulators will assert claims that our fees, with
respect to such investment products, are not appropriate;
- our ability to anticipate and manage the level and timing of
redemptions and withdrawals from our collateral pools and other
collective investment products;
- the credit agency ratings of our debt and depositary
obligations and investor and client perceptions of our financial
strength;
- adverse publicity, whether specific to us or regarding other
industry participants or industry-wide factors, or other
reputational harm;
- our ability to control operational risks, data security breach
risks and outsourcing risks, 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 or potential changes to the competitive environment,
due to, among other things, regulatory and technological changes,
the effects of industry consolidation and perceptions of us, as a
suitable service provider or counterparty;
- our ability to complete acquisitions, joint ventures and
divestitures, including, without limitation, our ability to obtain
regulatory approvals, the ability to arrange financing as required
and the ability to satisfy closing conditions;
- the risks that our acquired businesses, including, without
limitation, our acquisition of Charles River Development, and joint
ventures will not achieve their anticipated financial, operational
and product innovation 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 negative synergies or liabilities 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 integrate Charles River Development's front
office software solutions with our middle and back office
capabilities to develop a front-to-middle-to-back office platform
that is competitive, generates revenues in line with our
expectations and meets our clients' requirements;
- our ability to recognize evolving 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 grow revenue, manage expenses, attract and
retain highly skilled people and raise the capital necessary to
achieve our business goals and comply with regulatory requirements
and expectations;
- changes in accounting standards and practices; and
- the impact of the U.S. tax legislation enacted in 2017, 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 2018 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 should not be relied on
as representing our expectations or beliefs as of any time
subsequent to the time this News Release is first issued, and we do
not undertake efforts to revise those forward-looking statements to
reflect events after that time.
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Ilene Fiszel Bieler +1 617-664-3477 Marc Hazelton +1
617-513-9439
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