State Street executives reported a strong finish to 2025 with positive operating leverage and pre-tax margin expansion. Fourth quarter EPS grew 14%, with record total and fee revenue. Expenses rose 5% due to investments and transformation. The company achieved full-year productivity savings and returned over $2.1 billion to shareholders in 2025.

In investment services, State Street saw growth in servicing fees, assets under custody/administration, and fee revenue wins. Private markets represented 10% of servicing fees, up from 9% in 2024. In investment management, the firm posted record revenue with management fees increasing 15% year over year.

State Street Markets also experienced growth in FX trading and securities finance revenue. However, software and processing fees declined 15% year over year. Fourth quarter NII was up 7% and expenses rose 6%. The company achieved its full-year productivity savings target and is targeting comparable savings in 2026.

For 2026, State Street expects fee revenue to rise 4-6%, NII to increase low single digits, expenses to grow 3-4%, and positive operating leverage exceeding 100 basis points. The tax rate is expected at approximately 22%, and the payout ratio around 80%. Executives emphasized deliberate reinvestment and significant productivity savings.

On digital assets, State Street is focused on digitizing transactions, like tokenizing cash and money market funds. The company views M&A as part of capital deployment. State Street Corporation provides investment servicing, management, and research/trading services globally, serving a broad client base of institutional investors.

Read more at Yahoo Finance: State Street Q4 Earnings Call Highlights