US IG FINANCIALS: State Street 4Q25 (STT)

Credit neutral.  Good quarter on growth in servicing fees generated by its market- leading global custody business, though expenses up on big investments and move into digital assets could introduce potential risks. 

(STT; Aa3/A/AA-)

#MNI #Financials

• Adj EPS $2.97 beats $2.85 consensus, Revs $3.66B beats $3.59B est.
• Fee revenue $2.8B +8% YY.  Management fees $662MM +15% YY on market moves and net inflows.
• FX trading services of $405MM +13% YY.
• Net Flows +$85
• NII $802MM +7% YY, beat estimate.  NIM 1%.
• Total expenses FY25 of $10.2B +7% YY on operational/tech investments.
• Launched Digital Asset Platform:  digital assets infrastructure allowing STT to take in stablecoins, offer tokenized money market funds, other digital offerings.
• ROTCE 21.5%, CET1 11.7%
• AUC/A of $53T including $2T FY25 wins that generated servicing fees of $333M.
• AUM $5.7T, est $5.62T.
• Outlook 2026: fee revs +4-6%, NII up low single digits, expenses up 3-4%.