State Street Corporation (NYSE:STT) reported stronger-than-expected second-quarter results, with earnings and revenue both surpassing Wall Street forecasts as the company benefited from record levels of client assets and broad-based fee growth.
The financial services group posted earnings of $3.65 per share, ahead of the analyst consensus of $3.32. Revenue climbed to $4.05 billion, exceeding expectations of $3.86 billion and increasing 17% from the same period a year earlier.
Shares gained more than 2% in premarket trading following the earnings release.
Record assets support revenue growth
State Street delivered record levels of assets under custody and administration (AUC/A) as well as assets under management (AUM), helping lift both fee income and net interest income during the quarter.
Total fee revenue rose 17% year over year to $3.19 billion, led by servicing fees of $1.47 billion, up 13%, while management fees increased 29% to $772 million.
Foreign exchange trading services generated revenue of $494 million, up 26%, and securities finance revenue advanced 19% to $150 million.
Net interest income also strengthened, rising 18% to $860 million as net interest margin expanded by 17 basis points to 1.13%.
“Our strong start to 2026 continued in the second quarter, powered by the strength of our global franchises,” said Ron O’Hanley, Chairman and Chief Executive Officer.
“We achieved record total revenues, along with record AUC/A and AUM in the quarter, further underscoring our continued momentum.”
Profitability continues to improve
Operating expenses increased 5% year over year to $2.66 billion, reflecting higher costs associated with revenue growth and continued strategic investment across the business.
Despite the higher expense base, State Street generated positive operating leverage of 1,226 basis points, while its pre-tax margin improved to 34.3%.
Return on equity reached 16.7% during the quarter.
Shareholder returns remain strong
Assets under custody and administration ended the quarter at a record $57.9 trillion, representing an 18% increase from a year earlier.
Assets under management also reached a new high of $6.3 trillion, up 23% year over year.
State Street returned $631 million to shareholders during the quarter through a combination of $400 million in share repurchases and $231 million in dividend payments.
State Street Corporation stock price
