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NII Strength & Fee Income Growth to Drive STT's Q2 Earnings
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Key Takeaways
State Street's Q2 earnings is estimated at $3.30, up 30.4%, while sales are seen rising 11.5%.
NII is projected to climb 14.4% to $833.8 million, supported by robust lending and stable funding costs.
Total fee revenues are expected to rise 12.6%, led by management, servicing and securities finance fees.
State Street (STT - Free Report) is slated to report second-quarter 2026 results on July 16, before market open. The company’s quarterly revenues and earnings are expected to have risen year over year.
In the first quarter of 2026, STT’s earnings outpaced the Zacks Consensus Estimate. Results were aided by growth in fee revenues and net interest income (NII). 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 provisions were undermining factors.
State Street has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering a surprise of 6.97%, on average.
NII: In the quarter, the Federal Reserve kept interest rates unchanged and signaled a hike later in the year. Further, a solid lending scenario (per the Fed’s latest data, overall loan growth was robust in the quarter) and stabilizing funding/deposit costs are expected to have offered the much-needed support to STT’s NII growth.
The Zacks Consensus Estimate for State Street’s average interest-earning assets is pegged at $294.8 billion, which implies a 3.2% decline from the prior-year quarter.
The consensus estimate for NII (on a fully taxable-equivalent basis) of $833.8 million indicates a 14.4% year-over-year rise.
Fee Revenues: Supported by solid inflows, the company’s AUM and AUC/A balances are expected to have increased in the to-be-reported quarter. Thus, management fees are likely to have benefited. The consensus estimate for management fees of $747.6 million implies a 33% year-over-year jump.
The consensus estimate for securities finance revenues of $133.9 million implies a 6.2% increase.
At the end of the first quarter, STT reported $315 million of servicing fee revenues to be installed. Hence, the metric is likely to have grown in the second quarter. The Zacks Consensus Estimate for servicing fees of $1.48 billion indicates a 13.1% improvement.
The Zacks Consensus Estimate for FX trading services income is pegged at $404.6 million, suggesting a 6.1% year-over-year decline. The consensus estimate for software services fees suggests a 22.8% decrease to $177.6 million.
Overall, the Zacks Consensus Estimate for total fee revenues of $3.06 billion indicates 12.6% year-over-year growth.
Expenses: Total expenses at State Street are expected to have increased in the second quarter, primarily due to higher information systems and communication costs, as well as spending on strategic acquisitions, expansion efforts and franchise investments.
While the company has been taking steps to enhance operating efficiency, ongoing investments in growth initiatives, infrastructure and technology are likely to have exerted upward pressure on costs in the to-be-reported quarter.
What the Zacks Model Unveils for State Street
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.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for State Street is +0.35%.
The Zacks Consensus Estimate for State Street’s earnings of $3.30 per share has been revised 2.8% higher over the past seven days. The figure suggests a 30.4% surge from the year-ago quarter.
The consensus estimate for quarterly sales of $3.85 billion indicates an 11.5% increase.
State Street’s Peers Worth a Look
Here are STT’s peers 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 Bank of New York Mellon Corporation (BNY - Free Report) is slated to report second-quarter 2026 results on July 15. The company has a Zacks Rank #2 at present and an Earnings ESP of +0.05%.
Quarterly earnings estimates for BNY have been moved north to $2.20 over the past week.
The Earnings ESP for Northern Trust (NTRS - Free Report) is +0.50% and it carries a Zacks Rank of 2 at present. The company is slated to report second-quarter 2026 results on July 22.
Over the past seven days, the Zacks Consensus Estimate for Northern Trust’s quarterly earnings has been revised upward to $2.68.
View the Zacks #1 Rank List
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NII Strength & Fee Income Growth to Drive STT's Q2 Earnings
Key Takeaways
State Street (STT - Free Report) is slated to report second-quarter 2026 results on July 16, before market open. The company’s quarterly revenues and earnings are expected to have risen year over year.
In the first quarter of 2026, STT’s earnings outpaced the Zacks Consensus Estimate. Results were aided by growth in fee revenues and net interest income (NII). 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 provisions were undermining factors.
State Street has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering a surprise of 6.97%, on average.
State Street Corporation Price and EPS Surprise
State Street Corporation price-eps-surprise | State Street Corporation Quote
Major Q2 Factors & Estimates for State Street
NII: In the quarter, the Federal Reserve kept interest rates unchanged and signaled a hike later in the year. Further, a solid lending scenario (per the Fed’s latest data, overall loan growth was robust in the quarter) and stabilizing funding/deposit costs are expected to have offered the much-needed support to STT’s NII growth.
The Zacks Consensus Estimate for State Street’s average interest-earning assets is pegged at $294.8 billion, which implies a 3.2% decline from the prior-year quarter.
The consensus estimate for NII (on a fully taxable-equivalent basis) of $833.8 million indicates a 14.4% year-over-year rise.
Fee Revenues: Supported by solid inflows, the company’s AUM and AUC/A balances are expected to have increased in the to-be-reported quarter. Thus, management fees are likely to have benefited. The consensus estimate for management fees of $747.6 million implies a 33% year-over-year jump.
The consensus estimate for securities finance revenues of $133.9 million implies a 6.2% increase.
At the end of the first quarter, STT reported $315 million of servicing fee revenues to be installed. Hence, the metric is likely to have grown in the second quarter. The Zacks Consensus Estimate for servicing fees of $1.48 billion indicates a 13.1% improvement.
The Zacks Consensus Estimate for FX trading services income is pegged at $404.6 million, suggesting a 6.1% year-over-year decline. The consensus estimate for software services fees suggests a 22.8% decrease to $177.6 million.
Overall, the Zacks Consensus Estimate for total fee revenues of $3.06 billion indicates 12.6% year-over-year growth.
Expenses: Total expenses at State Street are expected to have increased in the second quarter, primarily due to higher information systems and communication costs, as well as spending on strategic acquisitions, expansion efforts and franchise investments.
While the company has been taking steps to enhance operating efficiency, ongoing investments in growth initiatives, infrastructure and technology are likely to have exerted upward pressure on costs in the to-be-reported quarter.
What the Zacks Model Unveils for State Street
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.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for State Street is +0.35%.
Zacks Rank: STT currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
State Street’s Q2 Earnings & Sales Estimates
The Zacks Consensus Estimate for State Street’s earnings of $3.30 per share has been revised 2.8% higher over the past seven days. The figure suggests a 30.4% surge from the year-ago quarter.
The consensus estimate for quarterly sales of $3.85 billion indicates an 11.5% increase.
State Street’s Peers Worth a Look
Here are STT’s peers 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 Bank of New York Mellon Corporation (BNY - Free Report) is slated to report second-quarter 2026 results on July 15. The company has a Zacks Rank #2 at present and an Earnings ESP of +0.05%.
Quarterly earnings estimates for BNY have been moved north to $2.20 over the past week.
The Earnings ESP for Northern Trust (NTRS - Free Report) is +0.50% and it carries a Zacks Rank of 2 at present. The company is slated to report second-quarter 2026 results on July 22.
Over the past seven days, the Zacks Consensus Estimate for Northern Trust’s quarterly earnings has been revised upward to $2.68.