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State Street Q3 Earnings Beat on Y/Y Growth in Fee Revenues
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Key Takeaways
State Street posted Q3 EPS of $2.78, topping estimates and rising 23% from the prior year.
Total revenues grew 8.8% y/y to $3.55B, driven by higher fee income and lower credit provisions.
AUC/A hit $51.66T and AUM rose 15.1%, while higher expenses and weaker NII weighed on results.
State Street’s (STT - Free Report) third-quarter 2025 earnings of $2.78 per share surpassed the Zacks Consensus Estimate of $2.62. The bottom line increased 23% from the prior-year quarter.
Results have been aided by growth in fee revenues and 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 and lower net interest income (NII) acted as spoilsports.
Net income available to common shareholders was $802 million, up 17.6% from the year-ago quarter. Our projection for the metric was $698.1 million.
STT’s Revenues Improve, Expenses Rise
Total revenues of $3.55 billion increased 8.8% year over year. The top line surpassed the Zacks Consensus Estimate of $3.47 billion.
NII was $715 million, down 1.1% year over year. The fall was due to lower average short-end rates and deposit mix shift, partially offset by securities portfolio repricing and continued loan growth. Our estimate for the metric was $738.2 million.
The net interest margin (NIM) contracted 11 basis points year over year to 0.96%. We expected NIM to be 0.99%.
Total fee revenues increased 8.1% year over year to $2.83 billion. The rise was driven by an increase in almost all the components, except for lending-related and other fees. We estimated the metric to be $2.70 billion.
Non-interest expenses were $2.43 billion, up 5.5% from the prior-year quarter. The rise was mainly due to an increase in all components, except for the amortization of other intangible assets. Our estimate for non-interest expenses was $2.43 billion.
Provision for credit losses was $9 million, down 65.4% from the prior-year quarter. We had projected the metric to be $20.4 million.
The Common Equity Tier 1 ratio was 11.3% as of Sept. 30, 2025, compared with 11.6% in the corresponding period of 2024. The return on average common equity was 13.4% compared with 12% in the year-ago quarter.
Asset Balances Increase for State Street
As of Sept. 30, 2025, the total AUC/A was a record $51.66 trillion, up 10.5% year over year. The rise was driven by higher quarter-end equity market levels and client flows. We had projected the metric to be $52.04 trillion.
AUM was $5.45 trillion, up 15.1% year over year, led by higher quarter-end market levels and net inflows. Our estimate for the metric was $5.55 trillion.
STT’s Share Repurchase Update
In the reported quarter, State Street repurchased shares worth $400 million.
Our Take on STT
Relatively higher interest rates, strategic buyouts, rising AUM and solid business servicing wins are expected to keep supporting STT’s financials. However, persistently rising expenses and concentrated fee-based revenues are concerning.
State Street Corporation Price, Consensus and EPS Surprise
Impressive trading and investment banking (IB) performance drove JPMorgan’s (JPM - Free Report) third-quarter 2025 earnings of $5.07 per share. The bottom line handily surpassed the Zacks Consensus Estimate of $4.83.
JPM’s markets revenues exceeded management's expectations of growth in the high-teens percentage rate. The metric grew 25% year over year to $8.9 billion. Specifically, fixed-income markets’ revenues jumped 21% to $5.6 billion, while equity markets’ numbers increased 33% to $3.3 billion.
Also, the IB business performance was far stronger than that expected by management.
JPMorgan recorded an increase in NII, driven by higher yields and a 7% year-over-year jump in total loans.
Citigroup Inc. (C - Free Report) reported third-quarter 2025 adjusted net income per share of $2.24, up 48.3% from the year-ago period. The metric also surpassed the Zacks Consensus Estimate by 17.3%.
Citigroup’s results benefited from an increase in NII and non-interest revenues, alongside lower provisions. The company also registered a year-over-year increase of 17% in IB revenues, reflecting growth in advisory and equity capital markets. However, increased expenses and a weak capital position were the undermining factors for Citigroup.
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State Street Q3 Earnings Beat on Y/Y Growth in Fee Revenues
Key Takeaways
State Street’s (STT - Free Report) third-quarter 2025 earnings of $2.78 per share surpassed the Zacks Consensus Estimate of $2.62. The bottom line increased 23% from the prior-year quarter.
Results have been aided by growth in fee revenues and 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 and lower net interest income (NII) acted as spoilsports.
Net income available to common shareholders was $802 million, up 17.6% from the year-ago quarter. Our projection for the metric was $698.1 million.
STT’s Revenues Improve, Expenses Rise
Total revenues of $3.55 billion increased 8.8% year over year. The top line surpassed the Zacks Consensus Estimate of $3.47 billion.
NII was $715 million, down 1.1% year over year. The fall was due to lower average short-end rates and deposit mix shift, partially offset by securities portfolio repricing and continued loan growth. Our estimate for the metric was $738.2 million.
The net interest margin (NIM) contracted 11 basis points year over year to 0.96%. We expected NIM to be 0.99%.
Total fee revenues increased 8.1% year over year to $2.83 billion. The rise was driven by an increase in almost all the components, except for lending-related and other fees. We estimated the metric to be $2.70 billion.
Non-interest expenses were $2.43 billion, up 5.5% from the prior-year quarter. The rise was mainly due to an increase in all components, except for the amortization of other intangible assets. Our estimate for non-interest expenses was $2.43 billion.
Provision for credit losses was $9 million, down 65.4% from the prior-year quarter. We had projected the metric to be $20.4 million.
The Common Equity Tier 1 ratio was 11.3% as of Sept. 30, 2025, compared with 11.6% in the corresponding period of 2024. The return on average common equity was 13.4% compared with 12% in the year-ago quarter.
Asset Balances Increase for State Street
As of Sept. 30, 2025, the total AUC/A was a record $51.66 trillion, up 10.5% year over year. The rise was driven by higher quarter-end equity market levels and client flows. We had projected the metric to be $52.04 trillion.
AUM was $5.45 trillion, up 15.1% year over year, led by higher quarter-end market levels and net inflows. Our estimate for the metric was $5.55 trillion.
STT’s Share Repurchase Update
In the reported quarter, State Street repurchased shares worth $400 million.
Our Take on STT
Relatively higher interest rates, strategic buyouts, rising AUM and solid business servicing wins are expected to keep supporting STT’s 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 sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of Other Banks
Impressive trading and investment banking (IB) performance drove JPMorgan’s (JPM - Free Report) third-quarter 2025 earnings of $5.07 per share. The bottom line handily surpassed the Zacks Consensus Estimate of $4.83.
JPM’s markets revenues exceeded management's expectations of growth in the high-teens percentage rate. The metric grew 25% year over year to $8.9 billion. Specifically, fixed-income markets’ revenues jumped 21% to $5.6 billion, while equity markets’ numbers increased 33% to $3.3 billion.
Also, the IB business performance was far stronger than that expected by management.
JPMorgan recorded an increase in NII, driven by higher yields and a 7% year-over-year jump in total loans.
Citigroup Inc. (C - Free Report) reported third-quarter 2025 adjusted net income per share of $2.24, up 48.3% from the year-ago period. The metric also surpassed the Zacks Consensus Estimate by 17.3%.
Citigroup’s results benefited from an increase in NII and non-interest revenues, alongside lower provisions. The company also registered a year-over-year increase of 17% in IB revenues, reflecting growth in advisory and equity capital markets. However, increased expenses and a weak capital position were the undermining factors for Citigroup.