State Street third-quarter diluted EPS rises 33% to $3.69 on higher fees

State Street Corporation (STT) reported third-quarter 2026 diluted earnings of $3.69 per share on Wednesday, up 33% from a year earlier.

Total revenue rose 13% to $4.0 billion, and net income rose 27%, the company said in a news release attached to a regulatory filing.

Here's how the company did:

• Diluted earnings per share: $3.69 vs. $2.78 a year earlier
• Total revenue: $4,004 million vs. $3,545 million a year earlier
• Net income: $1,090 million vs. $861 million a year earlier
• Total fee revenue: $3,140 million vs. $2,829 million a year earlier

Net interest income rose 21% to $864 million, reflecting a 16 basis point increase in net interest margin from a year earlier. Fee revenue increased 11%, primarily driven by higher Servicing fees, Management fees and foreign exchange trading services revenue.

Chairman and Chief Executive Officer Ron O'Hanley said, “The strength of our third-quarter results demonstrates continued momentum and disciplined execution across our global franchises.”

Servicing fees were $1,492 million, up 10%, driven by organic growth and higher average market levels. Management fees were $797 million, up 20%, and foreign exchange trading services revenue was $427 million, up 17%.

Assets under custody and/or administration reached a record $59.2 trillion at quarter-end, up 15%. Assets under management rose 16% to $6.3 trillion.

Total expenses rose 8% to $2,620 million, mainly from higher revenue-related costs and continued strategic investments. Compensation and employee benefits rose 8% to $1,251 million, and information systems and communications costs rose 15% to $594 million.

The pre-tax margin was 34.6%, up 3.5 points, and return on average tangible common equity was 25.1%, compared with 20.9% a year earlier. The company said there were no notable items in the quarter or in either comparison period.

The company returned $651 million of capital to common shareholders in the quarter, including $400 million of share repurchases and $251 million of declared dividends, or $0.92 per share. The dividend was up from $0.84 per share in the second quarter.

The standardized common equity tier 1 ratio was 11.0% at quarter-end, down from 11.3% a year earlier and up from 10.8% in the second quarter.

The company raised its full-year 2026 outlook. It now expects fee revenue to rise about 13% to 14% from a year earlier, up from about 12% to 13% in its July outlook.

It also now expects net interest income to rise about 15% to 16%, up from about 14% to 15%, and expenses to rise about 8% to 8.5%, up from about 8%, plus or minus. Operating leverage is now guided at more than 500 basis points, against about 500 in July.

The outlook assumes global equity markets flat from current levels, organic growth in Investment Services and Investment Management, and interest rates broadly aligned with current forward rates.

O'Hanley said, “We enter the final quarter of the year with strong momentum, a clear strategy, and confidence in our ability to deliver against our medium-term targets while continuing to create long-term value for shareholders.”

The company also announced an agreement to acquire the Santander CACEIS Latam Securities Services joint venture. Completion is subject to regulatory approvals and customary closing conditions. The filing did not disclose a price.

The company also said it won its first Wealth Services mandate, with a large U.S. registered investment advisor client.

Separately, the board elected Alexander Vollert as an independent director on Oct. 9, 2026. He was also appointed to the Technology and Operations Committee and the Risk Committee.

State Street will redeem all $500 million of its 1.684% fixed-to-floating rate senior notes due 2027 on Nov. 18, 2026, at 100% of principal plus accrued and unpaid interest, using cash on hand.

The company will hold its investor conference call on Wednesday at 11:00 a.m. ET.