Loading blog posts...
November 2, 2025 • 4 min read
State Street Corp (STT), a titan in the world of financial services, is a company many may not know by name but whose influence is felt across the global investment landscape. As one of the largest custodian banks and asset managers, it provides the essential plumbing for institutional investors, managing and servicing trillions of dollars in assets. We're diving into their latest quarterly report filed with the SEC to see how the firm performed in the third quarter of 2025.
State Street delivered a strong quarter, reporting a 9% year-over-year increase in total revenue to $3.55 billion. More impressively, net income jumped 18% to $861 million, translating to diluted earnings per share of $2.78, up from $2.26 in the same period last year. This performance indicates robust growth and enhanced profitability.
To better understand the flow of money through the company this quarter, the following diagram breaks down State Street's revenues and expenses, from their sources all the way to net income.
Please log in to view diagrams.
State Street's revenue is primarily generated from two sources: fee revenue from its services and net interest income from its banking operations.
Fee Revenue: This is the company's core business, and it saw healthy growth of 8% year-over-year, reaching $2.83 billion. The main contributors were:
Net Interest Income (NII): This represents the difference between the interest earned on assets like loans and securities and the interest paid on deposits. NII came in at $715 million, a slight 1% decrease from the prior year. For a financial institution of this size, maintaining a stable NII in a fluctuating rate environment is a key indicator of solid balance sheet management.
State Street operates through two primary business lines, both of which demonstrated impressive profitability gains.
Investment Servicing: This is the larger of the two segments, providing critical infrastructure services like custody, accounting, and administration for institutional investors. It generated $2.86 billion in revenue, a 7% increase from the prior year. More importantly, its income before taxes grew by 15% to $858 million, boosting its pre-tax margin from 28.0% to 30.0%. This shows the company is not just growing its largest business, but also making it more profitable.
Investment Management: This division, which includes the well-known asset manager State Street Global Advisors, brought in $684 million in revenue, up a robust 15%. The profitability story here is even more striking, with pre-tax income soaring 36% to $244 million. This pushed the division's pre-tax margin from 30.2% to an impressive 35.7%, signaling strong investment performance and operational efficiency.
State Street's third-quarter results paint a picture of a company executing well on its strategy. Solid growth in its core fee-generating businesses, especially the highly profitable investment management arm, drove the strong results. While total expenses rose by 5% to $2.4 billion, this was outpaced by revenue growth, leading to an overall pre-tax margin of 31.1%.
As a global systemically important bank (G-SIB), State Street's financial health and growth are often seen as a proxy for the broader institutional investment environment. This quarter's strong performance suggests that despite economic uncertainties, the firm continues to deepen its client relationships and capitalize on its market-leading position.
Last updated: November 2, 2025