We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Rise in NII, Fee Income Likely to Aid State Street's Q2 Earnings
Read MoreHide Full Article
Key Takeaways
State Street is projected to post 11.2% EPS growth and 5.4% revenue growth in 2Q25.
Higher FX trading, servicing and management fees are expected to lift STT's fee revenues.
NII may benefit from loan growth and high rates despite a slight y/y decline.
State Street (STT - Free Report) is slated to report second-quarter 2025 results on July 15, before the opening bell. The company’s revenues and earnings are expected to have increased year over year.
In the last reported quarter, STT’s earnings outpaced the Zacks Consensus Estimate. Growth in fee revenues and lower provisions primarily aided the results. The company witnessed improvements in total assets under custody and administration, and assets under management balances. However, higher adjusted expenses and lower net interest income (NII) were spoilsports.
State Street has an impressive earnings surprise history. The company’s earnings outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering a surprise of 6.5%, on average.
The Zacks Consensus Estimate for State Street’s second-quarter earnings of $2.39 per share has been revised marginally lower over the past seven days. The figure suggests an 11.2% rise from the year-ago quarter’s actual.
The consensus estimate for sales of $3.36 billion suggests 5.4% year-over-year growth.
STT’s Other Key Estimates for Q2
NII: Because of the uncertainty surrounding the impacts of Trump’s tariff policy on the economy, the Federal Reserve kept interest rates unchanged at 4.25-4.5% in the second quarter of 2025. Per the Fed’s latest data, the lending scenario was decent in April and May, which is expected to have resulted in an increase in overall loan balances in the quarter. Thus, amid gradually stabilizing funding costs, relatively higher rates and loan growth are expected to have positively impacted STT’s NII in the quarter.
The Zacks Consensus Estimate for average interest-earning assets is pegged at $291.4 billion, which implies an 11.3% rise from the prior-year quarter’s actual. Our estimate for the metric is pegged at $291.7 billion.
The Zacks Consensus Estimate for NII (on a fully taxable-equivalent or FTE basis) of $734 million indicates a marginal year-over-year decline. We project NII on an FTE basis of $736.1 million.
Fee Revenues: Because of global trade tensions and tariff-related uncertainty, there was an increase in foreign exchange (FX) trading volumes and volatility in the second quarter. This is expected to have boosted State Street’s FX trading services income. The consensus estimate for FX trading services income is pegged at $382 million, suggesting a 13.7% year-over-year rise. We expect the metric to be $364.2 million.
The consensus estimate for management fees of $559 million implies a 9.4% year-over-year rise. The Zacks Consensus Estimate for servicing fees of $1.29 billion indicates a 3.7% rise from the prior-year quarter. Our estimates for management fees and servicing fees are $553.4 million and $1.29 billion, respectively.
The consensus estimate for software and processing fees suggests a 7.9% rise to $231 million. Our estimate for the same is $230.3 million. The Zacks Consensus Estimate for securities finance revenues of $121 million suggests a 12% rise from the year-ago quarter. Our estimate for the same is $116 million.
Overall, the Zacks Consensus Estimate for total fee revenues of $2.63 billion indicates a 6.9% year-over-year rise. We project the metric to be $2.62 billion.
Expenses: Higher information systems and communication expenses, and the company’s strategic buyouts and investments in franchises are expected to have resulted in an overall rise in total expenses in the second quarter.
Despite the company taking measures to improve operating efficiency (which will result in cost savings in 2025), its continued incremental investments in business growth, infrastructure and technology are expected to have resulted in higher costs in the to-be-reported quarter.
We anticipate total adjusted non-interest expenses to rise 3.8% year over year in the second quarter to $2.36 billion.
Key Development for State Street in Q2
In May, STT’s asset management arm, State Street Global Advisors (“SSGA”), entered an alliance with India-based smallcase to expand global market access for Indian investors and enhance SSGA's presence in the country’s fintech sector.
Smallcase is a fintech platform that offers curated portfolios of stocks and ETFs, enabling retail investors to invest in diversified themes.
The partnership is expected to provide SSGA with a distribution opportunity for its SPDR ETFs by featuring them on smallcase’s platform technology. This will enhance SSGA's global investment accessibility for investors in India through technology-driven solutions.
Here’s What the Zacks Model Reveals for STT
Per our model, the likelihood of State Street beating the Zacks Consensus Estimate this time around is high. This is because the company has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for State Street is +0.28%.
Here are a couple of other bank stocks that you may want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat this time:
The Earnings ESP for Northern Trust Corporation (NTRS - Free Report) is +2.44% and it carries a Zacks Rank #2 at present. The company is slated to report second-quarter 2025 results on July 23.
Over the past seven days, the Zacks Consensus Estimate for Northern Trust’s quarterly earnings has been revised upward to $2.07.
Prosperity Bancshares, Inc. (PB - Free Report) is also scheduled to announce second-quarter 2025 results on July 23. The company has a Zacks Rank #3 at present and an Earnings ESP of +1.33%. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Quarterly earnings estimates for Prosperity Bancshares have been unchanged at $1.40 over the past week.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Rise in NII, Fee Income Likely to Aid State Street's Q2 Earnings
Key Takeaways
State Street (STT - Free Report) is slated to report second-quarter 2025 results on July 15, before the opening bell. The company’s revenues and earnings are expected to have increased year over year.
In the last reported quarter, STT’s earnings outpaced the Zacks Consensus Estimate. Growth in fee revenues and lower provisions primarily aided the results. The company witnessed improvements in total assets under custody and administration, and assets under management balances. However, higher adjusted expenses and lower net interest income (NII) were spoilsports.
State Street has an impressive earnings surprise history. The company’s earnings outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering a surprise of 6.5%, on average.
State Street Corporation Price and EPS Surprise
State Street Corporation price-eps-surprise | State Street Corporation Quote
The Zacks Consensus Estimate for State Street’s second-quarter earnings of $2.39 per share has been revised marginally lower over the past seven days. The figure suggests an 11.2% rise from the year-ago quarter’s actual.
The consensus estimate for sales of $3.36 billion suggests 5.4% year-over-year growth.
STT’s Other Key Estimates for Q2
NII: Because of the uncertainty surrounding the impacts of Trump’s tariff policy on the economy, the Federal Reserve kept interest rates unchanged at 4.25-4.5% in the second quarter of 2025. Per the Fed’s latest data, the lending scenario was decent in April and May, which is expected to have resulted in an increase in overall loan balances in the quarter. Thus, amid gradually stabilizing funding costs, relatively higher rates and loan growth are expected to have positively impacted STT’s NII in the quarter.
The Zacks Consensus Estimate for average interest-earning assets is pegged at $291.4 billion, which implies an 11.3% rise from the prior-year quarter’s actual. Our estimate for the metric is pegged at $291.7 billion.
The Zacks Consensus Estimate for NII (on a fully taxable-equivalent or FTE basis) of $734 million indicates a marginal year-over-year decline. We project NII on an FTE basis of $736.1 million.
Fee Revenues: Because of global trade tensions and tariff-related uncertainty, there was an increase in foreign exchange (FX) trading volumes and volatility in the second quarter. This is expected to have boosted State Street’s FX trading services income. The consensus estimate for FX trading services income is pegged at $382 million, suggesting a 13.7% year-over-year rise. We expect the metric to be $364.2 million.
The consensus estimate for management fees of $559 million implies a 9.4% year-over-year rise. The Zacks Consensus Estimate for servicing fees of $1.29 billion indicates a 3.7% rise from the prior-year quarter. Our estimates for management fees and servicing fees are $553.4 million and $1.29 billion, respectively.
The consensus estimate for software and processing fees suggests a 7.9% rise to $231 million. Our estimate for the same is $230.3 million.
The Zacks Consensus Estimate for securities finance revenues of $121 million suggests a 12% rise from the year-ago quarter. Our estimate for the same is $116 million.
Overall, the Zacks Consensus Estimate for total fee revenues of $2.63 billion indicates a 6.9% year-over-year rise. We project the metric to be $2.62 billion.
Expenses: Higher information systems and communication expenses, and the company’s strategic buyouts and investments in franchises are expected to have resulted in an overall rise in total expenses in the second quarter.
Despite the company taking measures to improve operating efficiency (which will result in cost savings in 2025), its continued incremental investments in business growth, infrastructure and technology are expected to have resulted in higher costs in the to-be-reported quarter.
We anticipate total adjusted non-interest expenses to rise 3.8% year over year in the second quarter to $2.36 billion.
Key Development for State Street in Q2
In May, STT’s asset management arm, State Street Global Advisors (“SSGA”), entered an alliance with India-based smallcase to expand global market access for Indian investors and enhance SSGA's presence in the country’s fintech sector.
Smallcase is a fintech platform that offers curated portfolios of stocks and ETFs, enabling retail investors to invest in diversified themes.
The partnership is expected to provide SSGA with a distribution opportunity for its SPDR ETFs by featuring them on smallcase’s platform technology. This will enhance SSGA's global investment accessibility for investors in India through technology-driven solutions.
Here’s What the Zacks Model Reveals for STT
Per our model, the likelihood of State Street beating the Zacks Consensus Estimate this time around is high. This is because the company has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for State Street is +0.28%.
Zacks Rank: The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Banks Worth a Look
Here are a couple of other bank stocks that you may want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat this time:
The Earnings ESP for Northern Trust Corporation (NTRS - Free Report) is +2.44% and it carries a Zacks Rank #2 at present. The company is slated to report second-quarter 2025 results on July 23.
Over the past seven days, the Zacks Consensus Estimate for Northern Trust’s quarterly earnings has been revised upward to $2.07.
Prosperity Bancshares, Inc. (PB - Free Report) is also scheduled to announce second-quarter 2025 results on July 23. The company has a Zacks Rank #3 at present and an Earnings ESP of +1.33%. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Quarterly earnings estimates for Prosperity Bancshares have been unchanged at $1.40 over the past week.