State Street reports slight increase in FX trading services revenues in Q3 2021
State Street Corporation (NYSE:STT) today posted its financial results for the third quarter of 2021.
Fee revenue for the period increased 9% from a year earlier, reflecting growth in all businesses.
Foreign exchange trading services increased 3% compared to 3Q20, reaching $279 million. The rise reflected higher direct sales and trading revenue and indirect volumes, partially offset by lower FX volatility. Compared to 2Q21, Foreign exchange trading services decreased 2%, mainly due to seasonally lower client FX volumes and indirect spreads.
Securities finance increased 26% compared to 3Q20, reaching $106 million. The change reflected higher client securities loan balances and spreads, as well as new business wins in Enhanced Custody. Securities finance decreased 3% compared to 2Q21, primarily driven by lower agency balances.
Software and processing fees amounted to $198 million, up 15% from the result registered in 3Q20, mainly reflecting higher CRD revenues. Software and processing fees decreased 8% compared to 2Q21, primarily due to the absence of prior quarter CRD episodic fees and client renewals, partially offset by market-related adjustments.
Net interest income (NII) increased 2%, primarily driven by higher loan balances and growth in the investment portfolio and deposits, as well as the absence of a 3Q20 true-up, partially offset by lower investment portfolio yields.
In September 2021, State Street announced a temporary suspension of its share repurchase program and raised $1.9 billion of capital through a common stock issuance to finance the proposed acquisition of BBH Investor Services. State Street intends to resume its share repurchase program during 2Q22.
In 3Q21, State Street returned a total of $179 million of capital to shareholders in the form of common stock dividends paid. The company declared a 10% increase to 3Q21 quarterly common stock dividends payable in 4Q21.