- Record Revenue & EPS Growth: Q4 2025 revenue and fee income hit records, with EPS up 14% YoY to $2.58 (Q4 2024: $2.26), and full-year EPS rose 19% to $10.30.
- Strategic Milestones: Surpassed $50 trillion in AUCA (prior: $45T), launched digital asset platform, and private markets servicing fees grew double-digits YoY.
- Investment Management Strength: Management fee revenue reached $662M (Q4 2025), up 15% YoY, with assets under management hitting $5.7T (+20% YoY).
- Capital Returns: Returned $2.1B to shareholders in 2025 (buybacks: $1.4B, dividends: $700M), maintaining an 80% total payout ratio.
- 2026 Outlook: Targets 4–6% fee revenue growth, low single-digit NII increase, and $500M productivity savings, with CET1 ratio at 11.7% (up 40 bps YoY).
Revenue Growth Drivers
The company's investment management business had a record year, with management fee revenue up 15% year over year to $662 million. Assets under management increased 20% from the prior year to an all-time high of $5.7 trillion. State Street's markets franchise also performed well, generating double-digit full-year fee revenue growth across FX trading services and securities finance. Private markets servicing fees grew at a double-digit year-over-year pace, further contributing to the company's revenue growth.
Expense Management and Capital Position
Expenses increased 5% for the full year, primarily driven by strategic initiatives and technology investments. However, the company achieved $500 million in productivity savings, meeting its target. State Street's capital position remains strong, with a standardized CET1 ratio of 11.7% at quarter-end. The company returned over $2.1 billion to shareholders in 2025 through common share repurchases and dividends, demonstrating its commitment to shareholder value.
2026 Outlook and Valuation
State Street's 2026 outlook assumes global equity markets to be flat, with fee revenue expected to grow 4% to 6%. Net interest income is expected to increase by low single digits, with an improvement in net interest margin. The company's guidance reflects a balance between risk-based and leverage metrics. With a P/E Ratio of 12.17 and a P/TBV that can be derived from the given 'P/B Ratio': 1.31, which indicates a reasonable valuation. The Dividend Yield stands at 2.5%, making it an attractive income stream. Analysts estimate next year's revenue growth at 4.3%, aligning with the company's guidance.
Digital Transformation and Growth Opportunities
State Street is progressing with its digital transformation, focusing on enabling the transition to digital finance. The company is well-positioned to capitalize on growth opportunities in digital assets, including tokenized money market funds. While the financial impact is not expected to be visible in 2026, it represents a medium-term opportunity. The company's software business is transitioning from on-prem to SaaS, with growth expected to resume once the transition is complete.