State Street Corp (NYSE:STT) Q2 2019 Earnings Conference Call - Final Transcript

Jul 19, 2019 • 10:00 am ET


State Street Corp (NYSE:STT) Q2 2019 Earnings Conference Call - Final Transcript


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Good morning, and welcome to the State Street Corporation's Second Quarter 2019 Earnings Conference Call and Webcast. Today's discussion is being broadcasted live on State Street's website at [Operator Instructions] State Street's conference call is copyrighted and all rights are reserved. This call may not be recorded for rebroadcast or distribution in whole or in part without the expressed written authorization from State Street Corporation. The only authorized broadcast of this call will be housed on the State Street website.

Now, I would like to introduce Ilene Fiszel Bieler, Global Head of Investor Relations at State Street.

Ilene Fiszel Bieler

Thank you, operator. Good morning. Thank you all for joining us. On our call today, our CEO, Ron O'Hanley, will speak first; then Eric Aboaf, our CFO, will take you through our second quarter 2019 earnings slide presentation, which is available for download in the Investor Relations section of our website, Afterwards, we'll be happy to take questions. [Operator Instructions]

Before we get started, I would like to remind you that today's presentation will include results presented on a basis that excludes or adjusts one or more items from GAAP. Reconciliations of these non-GAAP measures to the most directly comparable GAAP or regulatory measure are available in the appendix to our slide presentation.

In addition, today's presentation will contain forward-looking statements. Actual results may differ materially from those statements due to a variety of important factors such as those factors referenced in our discussion today and in our SEC filings including the Risk Factors in our form 10-K. Our forward-looking statements speak only as of today, and we disclaim any obligation to update them even if our views change.

Now, let me turn it over to Ron.

Ronald P. O'Hanley

Thanks, Ilene, and good morning, everyone.

Turning to Slide 3, you will have seen we announced our second quarter financial results this morning reporting second quarter EPS and ROE of $1.42 and 10.1% respectively. Relative to the year-ago period, our results reflect challenging industry conditions including client pricing, global industry outflows, and volatile interest rates, as well as weaker international average market levels. When compared to the first quarter, our results stabilized somewhat and were supported by market tailwinds within our asset servicing and Investment Management businesses, as well as a slight seasonal uptick within our markets business.

Assets under custody and administration reached $32.8 trillion and we are encouraged by strong new wins in the quarter of $390 billion with assets yet to be installed at $575 billion. At Global Advisors, assets under management increased by 4% quarter-on-quarter to $2.9 trillion supported by higher period end equity market values as well as institutional client wins and cash inflows.

At CRD, we are encouraged by our first front-to-back investment service client agreement and six additional exclusive discussions that are in advanced negotiations. At the same time, the pipeline continues to grow, as evidenced by another quarter of increasing client engagements. Following our strong performance under the 2019 CCAR stress test, we anticipate increasing our common