State Street reports record Q2 2026: EPS up 68% YoY, raises dividend 10%, sets 35% margin target

State Street disclosed record second-quarter 2026 results with total revenue of $4.0 billion (up 17% year-over-year), pre-tax margin of 34.3%, return on tangible common equity of 25.5%, and diluted earnings per share of $3.65 (up 44% year-over-year). The company also announced medium-term financial targets (3-to-5-year horizon) of 35% pre-tax margin and mid-20s% ROTCE, underpinned by organic revenue growth, positive operating leverage, and approximately $1 billion of annual run-rate Transformation benefits by 2029.

State Street announced a 10% increase in its quarterly common stock dividend to $0.92 per share for the third quarter of 2026, subsequently declared on July 14, 2026. This follows a pattern of consistent dividend growth, with common dividend per share rising from $13.0B in FY2023 to $3.20 in FY2025.

State Street announced a new tokenized fund servicing capability in Luxembourg with an initial client signed on, expanding its Digital Asset solutions. The capability remains subject to applicable regulatory approvals and operational readiness milestones. This complements other digital asset initiatives disclosed in the quarter, including a tokenized private money market fund and a GENIUS Act-aligned stablecoin reserves money market fund.

State Street reported second-quarter 2026 net income of $1,084 million and diluted earnings per share of $3.65, up 56.4% and 68.2% from the prior-year quarter, respectively. Total revenue rose 17.4% year-over-year to $0.0M, driven by a 17.2% increase in total fee revenue to $0.0M and an 18.0% increase in net interest income to $860 million. The strong results reflect broad-based revenue growth across servicing fees, management fees, and foreign exchange trading services.

Fee revenue growth was led by servicing fees rising 12.6% to $1,468 million, management fees up 28.7% to $772 million, and foreign exchange trading services up 25.7% to $494 million, all compared to the prior-year quarter. The increases reflect higher market levels, net new business, and increased client activity. Year-to-date, management fees and foreign exchange trading services grew 26.0% and 27.3%, respectively.

Assets under custody and/or administration reached $57.9 trillion at June 30, 2026, up 18.1% from the prior-year quarter, driven by higher market levels and net new business. Assets under management totaled $6.3 trillion, up 22.7% year-over-year, reflecting market appreciation and net inflows. These metrics underpin the company's fee revenue growth and demonstrate continued client demand for State Street's services.

State Street's common equity tier 1 ratio stood at 10.8% at June 30, 2026, up 10 basis points from the prior-year quarter, while the tier 1 capital ratio was 13.2%. The company declared a quarterly dividend of $0.84 per share, representing a 10.5% increase from the prior year. Tangible book value per share rose 10.6% year-over-year to $59.23, reflecting earnings growth and capital management.

Total expenses in Q2 2026 were $2,659 million, up 5.1% from the prior-year quarter on a GAAP basis and 10.2% excluding notable items. The increase reflects higher compensation tied to revenue growth and technology investments. State Street achieved positive fee operating leverage of 611 basis points (excluding notable items), as fee revenue growth of 16.4% outpaced expense growth of 10.2%, demonstrating disciplined cost management alongside revenue expansion.

State Street reported Q2 2026 net income of $1,084 million and diluted EPS of $3.65, up 56% and 68% year-over-year respectively. Return on average common equity reached 16.7%, return on average tangible common equity was 25.5%, and pre-tax margin expanded to 34.3%. The company achieved record total revenue of $4.0 billion, up 17% YoY, driven by strength across its global franchises.

State Street declared a 10% per-share increase to its third quarter common stock dividend following the Federal Reserve's stress test results. This represents a material increase in shareholder returns and reflects management's confidence in the company's capital position and franchise resilience.

State Street achieved record assets under custody and/or administration (AUC/A) of $57.9 trillion as of quarter-end, up 18% year-over-year, driven by higher market levels, flows, and net new business. Assets under management (AUM) also reached a record $6.3 trillion, up 23% YoY, driven by higher market levels and net inflows of $114 billion in the quarter.

Total revenue of $4.0 billion increased 17% YoY, with total fee revenue up 17% to $3.2 billion and net interest income up 18% to $860 million. Key drivers included servicing fees up 13% to $1.5 billion, management fees up 29% to $772 million, FX trading services up 26% to $494 million, and securities finance up 19% to $150 million. Net interest margin expanded 17 basis points to 1.13%.

State Street's standardized CET1 ratio stood at 10.8% at quarter-end, up 0.1 percentage point YoY and 0.2 points sequentially, reflecting capital generated from earnings partially offset by capital returns and higher risk-weighted assets. The company returned $631 million to shareholders in Q2 2026, comprising $400 million in share repurchases and $231 million in dividends.

State Street disclosed Q2 2026 financial results through a slide presentation furnished in connection with an investor conference call. The presentation contains highlights of second-quarter 2026 operating results and related information as of June 30, 2026.

State Street disclosed its second-quarter 2026 financial results through a press release and accompanying financial addendum. The 8-K itself does not contain the actual financial figures; those are furnished in the attached exhibits.