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State Street in 1H17: Total Revenues, Total Expenses, and More

PART:
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Part 3
State Street in 1H17: Total Revenues, Total Expenses, and More PART 3 OF 6

What Led to a Rise in State Street’s Total Expenses?

Marginal increase

State Street Corporation (STT) witnessed a marginal rise in its total expenses in 1H17 compared to 1H16. In 1H16, the company reported total expenses of ~$3.9 billion. In 1H17, the company posted total expenses of ~$4.1 billion, which reflects a marginal rise of 5%. 

This trend was mainly due to an increase in the company’s securities processing costs in 1H17 compared to 1H16.

What Led to a Rise in State Street’s Total Expenses?

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State Street incurred securities processing costs of $10 million in 1H16 and $16 million in 1H17, implying a substantial rise of 60%. The company reported an 18% increase in its regulatory fees and assessment expenses in 1H17 compared to 1H16. In 1H17, the company reported regulatory fees and assessment expenses of $45 million compared to $38 million incurred in 1H16.

State Street saw a marginal increase in its compensation and employee benefits expenses in 1H17 compared to 1H16. In 1H16, the company reported ~$2.1 billion of compensation and employee benefits expenses and in 1H17, the company incurred compensation and employee benefits expenses of ~$2.2 billion, which reflects an increase of 7%.

State Street Corporation has seen a substantial rise in its acquisition costs in 1H17 compared to 1H16. In 1H16, the company incurred acquisition costs of $14 million and in 1H17, the company incurred $21 million of acquisition costs, which reflects an increase of 50%.

Market capitalization

State Street Corporation’s (STT) market capitalization is ~$35.4 billion. The market capitalization levels of its peers (XLF) follow:

  • SEI Investments (SEIC): ~$9.2 billion
  • Northern Trust Corporation (NTRS): ~$20.2 billion
  • Federated Investors (FII): ~$2.9 billion
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