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Can State Street Sustain Its Strong Revenue Growth Trajectory?
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Key Takeaways
State Street's revenues rose 15% to $11.85 billion in the first nine months of 2026.
NII grew 18.6%, while fee revenues increased 14.4% year over year during the period.
Record AUC/A and AUM, business expansion and cost discipline support State Street's growth prospects.
State Street Corporation (STT - Free Report) is benefiting from strong growth in net interest income (NII), higher fee revenues and record assets under custody and administration (AUC/A) and assets under management (AUM). Its diversified servicing, investment management and markets businesses, supported by strategic expansion and technology initiatives, are driving revenue growth. In the first nine months of 2026, total revenues increased 15% year over year to $11.85 billion.
The Zacks Consensus Estimate for 2026 and 2027 revenues implies an increase of 14.0% and 5.4%, respectively, pointing to continued growth, albeit at a slower pace annually.
Sales Estimate
Image Source: Zacks Investment Research
NII remains a key contributor to State Street's growth. The metric recorded a four-year (2021-2025) compound annual growth rate (CAGR) of 11.6%, supported by balance sheet management and investment portfolio repricing. Although net interest margin (NIM) declined to 1.00% in 2025, it rebounded in 2026. During the first nine months of the year, NII increased 18.6% year over year, while NIM expanded 17 basis points (bps) to 1.14%. The improvement was driven by a more favorable funding mix, continued investment portfolio repricing and the runoff of terminated hedges.
Management expects NII to grow 15-16% in 2026, and anticipates sequential growth in the fourth quarter. Over the medium term, NII is projected to increase at a low- to mid-single-digit rate, supported by deposit growth and NIM moving toward the upper end of its 110-115-bps target range.
Fee income is another important growth driver. State Street's AUC/A and AUM recorded four-year CAGRs of 5.3% and 8.2%, respectively, during 2021-2025. Building on this trend, fee revenues rose 14.4% year over year in the first nine months of 2026. Growth was driven by higher servicing and management fees, foreign exchange trading services and securities finance revenues. As of Sept. 30, 2026, assets under custody and/or administration (AUC/A) and assets under management (AUM) reached record levels of $59.2 trillion and $6.3 trillion, up 15% and 16% year over year, respectively. Higher equity market levels, client flows and new business supported the growth.
For 2026, management raised its fee revenue growth outlook to 13-14%. Over the medium term, servicing fees are expected to grow at a mid-single-digit rate, excluding the impact of market levels. A growing pipeline of servicing mandates and expansion into wealth, alternatives and digital asset services is expected to support this outlook.
State Street continues to expand its product offerings and servicing capabilities across ETFs, index strategies, digital assets, alternatives and wealth management. It has launched tokenized investment solutions and plans to introduce tokenized fund servicing by year-end, subject to regulatory approval. The company also secured its first wealth servicing mandate from a major U.S. registered investment advisor.
At the end of the third quarter of 2026, its pipeline included $2.98 trillion of AUC/A and $332 million in servicing fees awaiting installation. Additionally, the planned acquisition of Santander CACEIS' Latin American Securities Services business is expected to expand its servicing presence in Brazil, Mexico and Colombia. Meanwhile, STT’s technology transformation program targets $1 billion in annual benefits by 2029, including $250 million in revenue uplift.
Expense discipline is also supporting State Street's operating performance. In the first nine months of 2026, noninterest expenses increased 9.1% year over year, slower than revenue growth, helping the company generate positive operating leverage. The company anticipates more than 500 bps of positive operating leverage for 2026 while it aims to sustain average annual positive operating leverage of 100-150 bps over the medium term.
Our Take on STT’s Revenue Growth Prospects
State Street's revenue growth outlook remains favorable. Expanding servicing relationships, rising custody and managed assets, investment innovation and transformation initiatives are expected to help sustain revenue growth going forward. Still, this will depend on favorable market conditions, healthy client activity and disciplined expense management.
Over the past year, STT stock has rallied 47.9% compared with the industry’s 26.7% growth.
STT’s Peers Sustain Revenue Growth Through NII and Fee Income
JPMorgan Chase & Co. (JPM - Free Report) and Citigroup (C - Free Report) continued to report solid revenue momentum in the first nine months of 2026, supported by NII growth and diversified business operations.
JPMorgan's NII increased 11% year over year during the first nine months of 2026, supported by its asset-sensitive balance sheet, loan growth and deposit franchise. Strong client activity across investment banking (IB), Markets, payments and other businesses further supported revenue generation.
JPMorgan expects full-year 2026 NII of approximately $106.2 billion and NII excluding Markets of $97.2 billion. For 2027, its central case projects NII excluding Markets of around $107 billion, indicating expectations of continued growth.
Citigroup's non-interest revenues increased 10% year over year during the first nine months of 2026, supported by improved IB and trading activity. Growth in NII, alongside its Services, Markets, Wealth and U.S. Consumer Cards businesses, is also supporting its revenue mix.
Citigroup's ongoing organizational restructuring, international consumer business exits and expansion into private markets are expected to strengthen its core operations and diversify fee income. Management expects NII excluding Markets to grow in the mid-to-high 6% range in 2026, while its broader revenue base is projected to benefit from continued business simplification and growth in core franchises.
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Can State Street Sustain Its Strong Revenue Growth Trajectory?
Key Takeaways
State Street Corporation (STT - Free Report) is benefiting from strong growth in net interest income (NII), higher fee revenues and record assets under custody and administration (AUC/A) and assets under management (AUM). Its diversified servicing, investment management and markets businesses, supported by strategic expansion and technology initiatives, are driving revenue growth. In the first nine months of 2026, total revenues increased 15% year over year to $11.85 billion.
The Zacks Consensus Estimate for 2026 and 2027 revenues implies an increase of 14.0% and 5.4%, respectively, pointing to continued growth, albeit at a slower pace annually.
Sales Estimate
Image Source: Zacks Investment Research
NII remains a key contributor to State Street's growth. The metric recorded a four-year (2021-2025) compound annual growth rate (CAGR) of 11.6%, supported by balance sheet management and investment portfolio repricing. Although net interest margin (NIM) declined to 1.00% in 2025, it rebounded in 2026. During the first nine months of the year, NII increased 18.6% year over year, while NIM expanded 17 basis points (bps) to 1.14%. The improvement was driven by a more favorable funding mix, continued investment portfolio repricing and the runoff of terminated hedges.
Management expects NII to grow 15-16% in 2026, and anticipates sequential growth in the fourth quarter. Over the medium term, NII is projected to increase at a low- to mid-single-digit rate, supported by deposit growth and NIM moving toward the upper end of its 110-115-bps target range.
Fee income is another important growth driver. State Street's AUC/A and AUM recorded four-year CAGRs of 5.3% and 8.2%, respectively, during 2021-2025. Building on this trend, fee revenues rose 14.4% year over year in the first nine months of 2026. Growth was driven by higher servicing and management fees, foreign exchange trading services and securities finance revenues. As of Sept. 30, 2026, assets under custody and/or administration (AUC/A) and assets under management (AUM) reached record levels of $59.2 trillion and $6.3 trillion, up 15% and 16% year over year, respectively. Higher equity market levels, client flows and new business supported the growth.
For 2026, management raised its fee revenue growth outlook to 13-14%. Over the medium term, servicing fees are expected to grow at a mid-single-digit rate, excluding the impact of market levels. A growing pipeline of servicing mandates and expansion into wealth, alternatives and digital asset services is expected to support this outlook.
State Street continues to expand its product offerings and servicing capabilities across ETFs, index strategies, digital assets, alternatives and wealth management. It has launched tokenized investment solutions and plans to introduce tokenized fund servicing by year-end, subject to regulatory approval. The company also secured its first wealth servicing mandate from a major U.S. registered investment advisor.
At the end of the third quarter of 2026, its pipeline included $2.98 trillion of AUC/A and $332 million in servicing fees awaiting installation. Additionally, the planned acquisition of Santander CACEIS' Latin American Securities Services business is expected to expand its servicing presence in Brazil, Mexico and Colombia. Meanwhile, STT’s technology transformation program targets $1 billion in annual benefits by 2029, including $250 million in revenue uplift.
Expense discipline is also supporting State Street's operating performance. In the first nine months of 2026, noninterest expenses increased 9.1% year over year, slower than revenue growth, helping the company generate positive operating leverage. The company anticipates more than 500 bps of positive operating leverage for 2026 while it aims to sustain average annual positive operating leverage of 100-150 bps over the medium term.
Our Take on STT’s Revenue Growth Prospects
State Street's revenue growth outlook remains favorable. Expanding servicing relationships, rising custody and managed assets, investment innovation and transformation initiatives are expected to help sustain revenue growth going forward. Still, this will depend on favorable market conditions, healthy client activity and disciplined expense management.
Over the past year, STT stock has rallied 47.9% compared with the industry’s 26.7% growth.
One-Year Price Performance
Image Source: Zacks Investment Research
Currently, STT carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
STT’s Peers Sustain Revenue Growth Through NII and Fee Income
JPMorgan Chase & Co. (JPM - Free Report) and Citigroup (C - Free Report) continued to report solid revenue momentum in the first nine months of 2026, supported by NII growth and diversified business operations.
JPMorgan's NII increased 11% year over year during the first nine months of 2026, supported by its asset-sensitive balance sheet, loan growth and deposit franchise. Strong client activity across investment banking (IB), Markets, payments and other businesses further supported revenue generation.
JPMorgan expects full-year 2026 NII of approximately $106.2 billion and NII excluding Markets of $97.2 billion. For 2027, its central case projects NII excluding Markets of around $107 billion, indicating expectations of continued growth.
Citigroup's non-interest revenues increased 10% year over year during the first nine months of 2026, supported by improved IB and trading activity. Growth in NII, alongside its Services, Markets, Wealth and U.S. Consumer Cards businesses, is also supporting its revenue mix.
Citigroup's ongoing organizational restructuring, international consumer business exits and expansion into private markets are expected to strengthen its core operations and diversify fee income. Management expects NII excluding Markets to grow in the mid-to-high 6% range in 2026, while its broader revenue base is projected to benefit from continued business simplification and growth in core franchises.