State Street Corp (NYSE:STT) Q3 2019 Earnings Conference Call - Final Transcript
Oct 18, 2019 • 10:00 am ET
Ronald P. O'Hanley
potential, which is why reigniting servicing fee growth remains a top priority.
I would like to provide you now with an update on some of the strategic progress we are making to improve our revenue growth, as well as our operational efficiency. First regarding reigniting servicing fee revenue growth, we are seeing some intangible progress as demonstrated by this quarter's performance. Part of this initial success is due to a strengthened focus on our clients. We have made some appointments in key strategic areas of focus, such as with the recent announcement of our new Head of US Asset Owner Relationship Management.
In addition, we have expanded our management committee in recent months, adding to the diversity of our leadership and talent. Furthermore, we are taking steps to improve client service quality by reassessing and leveraging the capabilities of our newly combined operations and technology division.
Regarding operational efficiency, expense management remains a key focus for all of us. As a result of ongoing process re-engineering and automation efforts, we have been able to reduce high-cost location headcount by more than 2,700 year-to-date, already exceeding our initial target of 1,500 by year-end. Furthermore, our $400 million underlying expense savings program for full-year 2019 has already achieved $275 million in total year-over-year gross savings in the first nine months of the year.
You'll recall that last quarter I announced that we are in the process of updating our core business strategy to help us return to stronger revenue growth, as well as conducting a fundamental reassessment of our technology ecosystem in order to improve our operational efficiency in the near-term. This reassessment is underway, and we have taken early actions in this regard. In recent weeks, we have rationalized some of our technology headcount. There are a number of areas we are examining to create better technology outcomes at lower cost, with an increased emphasis on development projects and innovation that have a direct client service benefit and strengthen our resiliency. We continue to expect that we will be able to provide further detail on our reassessment later this fall.
Our vision remains becoming the leading asset servicer, asset manager and data insight provider to the owners and managers of the world capital. Our front-to-back platform, which we have branded Alpha, is key to achieving that vision in our financial targets over the medium-term. This Alpha strategy is facilitating deeper client relationships, allowing us to increasingly become the residential partner, while delivering operational efficiencies to both our clients and State Street. Our front-to-back asset servicing platform continues to have a strong pipeline with a number of clients in exclusive negotiations. The level of client engagements remains at an encouraging level.
Regarding shareholder return, following our strong performance under the 2019 CCAR stress test, we recently announced an 11% increase to our quarterly common dividend to $0.52 per share and returned approximately $690 million to shareholders, including $500 million of common share repurchases during the third quarter. We expect the changes to