State Street Q4 Earnings Beat on Y/Y Growth in NII, Fee Revenues

State Street’s STT fourth-quarter 2025 adjusted earnings of $2.97 per share surpassed the Zacks Consensus Estimate of $2.82. The bottom line increased 14.2% from the prior-year quarter.

Results have been aided by growth in net interest income (NII) and fee revenues, along with lower provisions. Also, the company witnessed improvements in the total assets under custody and administration (AUC/A) and assets under management (AUM) balances. However, higher expenses acted as a spoilsport.

Results excluded certain non-recurring items. After considering those, net income available to common shareholders (GAAP basis) was $688 million, down 5.5% from the year-ago quarter.

For 2025, adjusted earnings per share of $10.30 surpassed the Zacks Consensus Estimate of $10.17. The bottom line increased 18.8% from the previous year. Net income available to common shareholders (GAAP basis) was $2.72 billion, up 9.4% year over year.

STT’s Revenues Improve, Expenses Rise

Total quarterly revenues were a record $3.67 billion, which increased 7.5% year over year. The top line surpassed the Zacks Consensus Estimate of $3.59 billion.

Full-year revenues of $13.94 billion increased 7.3% year over year. The top line surpassed the Zacks Consensus Estimate of $13.88 billion.
Quarterly NII was $802 million, up 7.1% year over year. The rise was driven by an increase in average interest-earning assets.

The net interest margin (NIM) expanded 33 basis points year over year to 1.10%.

Total fee revenues increased 7.5% year over year to $2.86 billion. The rise was driven by an increase in almost all the components, except for lending-related and other fees, front office software and data fees, and other fee revenues.

Non-interest expenses were $2.74 billion, up 12.3% from the prior-year quarter. The rise was due to an increase in all cost components.

Provision for credit losses was $8 million, down 33.3% from the prior-year quarter.

The Common Equity Tier 1 ratio was 11.7% as of Dec. 31, 2025, compared with 10.9% in the corresponding period of 2024. The return on average common equity was 11.3% compared with 12.7% in the year-ago quarter.

Asset Balances Increase for State Street

As of Dec. 31, 2025, the total AUC/A was a record $53.80 trillion, up 15.6% year over year. The rise was driven by higher quarter-end equity market levels and client flows.

AUM was $5.67 trillion, up 20.1% year over year, led by higher quarter-end market levels and net inflows.

STT’s Share Repurchase Update

In the reported quarter, State Street repurchased shares worth $400 million.

Our Take on STT

State Street’s strategic buyouts (it acquired PriceStats and entered an agreement with Albilad Capital to support the latter’s securities services offerings in Saudi Arabia in November, while it acquired global custody and related businesses outside of Japan from Mizuho Financial Group in October), rising AUM balance and solid business servicing wins are expected to keep supporting its financials.

However, persistently rising expenses and concentrated fee-based revenues are concerning.

State Street Corporation Price, Consensus and EPS Surprise

 

State Street Corporation price-consensus-eps-surprise-chart | State Street Corporation Quote

State Street currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Banks

Solid trading performance and higher NII drove JPMorgan’s JPM fourth-quarter 2025 adjusted earnings of $5.23 per share. The bottom line handily surpassed the Zacks Consensus Estimate of $5.01.

JPM’s markets revenues exceeded management's expectations and grew 17% year over year. Further, the company recorded an increase in NII, driven by higher yields and an 11% year-over-year jump in total loans. However, weak investment banking (IB) performance and higher operating expenses and provisions weighed on the results.

Bank of America’s BAC fourth-quarter 2025 earnings of 98 cents per share surpassed the Zacks Consensus Estimate of 95 cents. The bottom line grew 18% year over year.

Bank of America recorded an improvement in trading numbers for the 15th straight quarter. The IB performance was subdued this time. Higher NII drove the company’s total revenues. While provisions declined in the quarter on a year-over-year basis, non-interest expenses increased, which hurt the results to some extent.

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This article originally published on Zacks Investment Research (zacks.com).

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