1、UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,DC 20549Form 10-QQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June 30,2024ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the
2、 transition period from to Commission File No.001-07511STATE STREET CORPORATION(Exact name of Registrant as Specified in its Charter)MA04-2456637(State or other jurisdiction of incorporation)(I.R.S.Employer Identification No.)One Congress StreetBoston,MA02114(Address of principal executive offices)(
3、Zip Code)(617)786-3000(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of Each ClassTrading Symbol(s)Name of each exchange on which registeredCommon Stock,$1 par value per shareSTTNew York Stock ExchangeDepositary Shares,each represent
4、ing a 1/4,000th ownership interest in a share ofSTT.PRGNew York Stock ExchangeFixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock,Series G,without par value per shareIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Se
5、curities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that theregistrant was required to file such reports)and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every
6、 Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12months(or for such shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated f
7、iler,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See the definitions of large acceleratedfiler,accelerated filer,smaller reporting company,and emerging growth company in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filer
8、 Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant toSection 13(a)
9、of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No The number of shares of the registrants common stock outstanding as of July 30,2024 was 298,620,012.STATE STREET CORPORATIONQUARTERLY REPORT ON FORM 10-Q FOR THE
10、QUARTERLY PERIOD ENDEDJune 30,2024TABLE OF CONTENTSPagePART IFINANCIAL INFORMATIONManagements Discussion and Analysis of Financial Condition and Results of Operations4General4Overview of Financial Results8Consolidated Results of Operations10Total Revenue10Net Interest Income20Provision for Credit Lo
11、sses23Expenses24Repositioning Charges24 Income Tax Expense25Line of Business Information25Investment Servicing25Investment Management26Financial Condition27Investment Securities27Loans29Risk Management30Credit Risk Management31Liquidity Risk Management31Operational Risk Management35Information Techn
12、ology Risk Management35Market Risk Management36Model Risk Management39Strategic Risk Management39Capital40Off-Balance Sheet Arrangements48Other Matters49Recent Accounting Developments49Quantitative and Qualitative Disclosures About Market Risk50Controls and Procedures50Consolidated Financial Stateme
13、nts51Consolidated Statement of Income(unaudited)51Consolidated Statement of Comprehensive Income(unaudited)52Consolidated Statement of Condition53Consolidated Statement of Changes in Shareholders Equity(unaudited)54Consolidated Statement of Cash Flows(unaudited)55Note 1.Summary of Significant Accoun
14、ting Policies56Note 2.Fair Value57Note 3.Investment Securities59Note 4.Loans and Allowance for Credit Losses63Note 5.Goodwill and Other Intangible Assets68Note 6.Other Assets69State Street Corporation|2Note 7.Derivative Financial Instruments70Note 8.Offsetting Arrangements73Note 9.Commitments and Gu
15、arantees76Note 10.Contingencies76Note 11.Variable Interest Entities78Note 12.Shareholders Equity79Note 13.Regulatory Capital82Note 14.Net Interest Income83Note 15.Expenses83Note 16.Earnings Per Common Share84Note 17.Line of Business Information85Note 18.Revenue from Contracts with Customers86Note 19
16、.Non-U.S.Activities87Note 20.Subsequent Events88Review Report of Independent Registered Public Accounting Firm89PART IIOTHER INFORMATIONItem 2Unregistered Sales of Equity Securities and Use of Proceeds92Item 5Other Information92Item 6Exhibits93Signatures94We use acronyms and other defined terms for
17、certain business terms and abbreviations,as defined in the acronyms list and glossary following the consolidated financialstatements in this Form 10-Q.State Street Corporation|3MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONSPART I.FINANCIAL INFORMATIONGENERALState
18、 Street Corporation is one of the worlds largest providers of financialservices to institutional investors.Our clients-asset managers and owners,insurance companies,official institutions,and central banks-rely on us to deliversolutions that support their goals across the investment life cycle.State
19、Street Corporation,referred to as the Parent Company,is a financialholding company organized in 1969 under the laws of the Commonwealth ofMassachusetts.The Parent Company is a source of financial and managerialstrength to our subsidiaries.Through our subsidiaries,including our principalbanking subsi
20、diary,State Street Bank and Trust Company,referred to as StateStreet Bank,we operate in more than 100 geographic markets worldwide,includingin the United States,Canada,Latin America,Europe,the Middle East and Asia.Weprovide a broad range of financial products and services to institutional investorsw
21、orldwide,with$44.31 trillion of AUC/A and$4.37 trillion of AUM as of June 30,2024.As of June 30,2024,we had consolidated total assets of$325.60 billion,consolidated total deposits of$239.16 billion,consolidated total shareholders equityof$24.76 billion and approximately 53,000 employees.Our operatio
22、ns are organized into two lines of business,Investment Servicingand Investment Management,which are defined based on products and servicesprovided.Additional information about our lines of business is provided in Line ofBusiness Information in this Managements Discussion and Analysis and Note 17 tot
23、he consolidated financial statements in this Quarterly Report on Form 10-Q for thequarter ended June 30,2024(Form 10-Q).Our executive offices are located at One Congress Street,Boston,Massachusetts 02114(telephone(617)786-3000).For purposes of this Form 10-Q,unless the context requires otherwise,ref
24、erences to State Street,we,us,ouror similar terms mean State Street Corporation and its subsidiaries on aconsolidated basis.This Managements Discussion and Analysis is part of this Form 10-Q andupdates the Managements Discussion and Analysis in our 2023 Annual Report onForm 10-K for the year ended D
25、ecember 31,2023 previously filed with the SEC(2023 Form 10-K).The financial information contained in this ManagementsDiscussion and Analysis and elsewhere in this Form 10-Q should be read inconjunction with the financial and otherinformation contained in our 2023 Form 10-K.Certain previously reporte
26、d amountspresented in this Form 10-Q have been reclassified to conform to current-periodpresentation.We prepare our consolidated financial statements in conformity with U.S.GAAP.The preparation of financial statements in conformity with U.S.GAAPrequires management to make estimates and assumptions i
27、n its application ofcertain accounting policies that materially affect the reported amounts of assets,liabilities,equity,revenue and expenses.The significant accounting policies that require us to make judgments,estimates and assumptions that are difficult,subjective or complex,about mattersthat are
28、 uncertain and may change in subsequent periods include:Recurring fair value measurements;Allowance for credit losses;Impairment of goodwill and other intangible assets;andContingencies.These significant accounting policies require the most subjective or complexjudgments,and underlying estimates and
29、 assumptions could be subject to revisionas new information becomes available.For additional information about thesesignificant accounting policies refer to pages 122 to 124,“Significant AccountingEstimates”included under Item 7,Managements Discussion and Analysis ofFinancial Condition and Results o
30、f Operations,in our 2023 Form 10-K.We did notchange these significant accounting policies in the first six months of 2024.Certain financial information provided in this Form 10-Q,including thisManagements Discussion and Analysis,is presented using both a U.S.GAAP,orreported basis,and a non-GAAP basi
31、s,including certain non-GAAP measures usedin the calculation of identified regulatory ratios.We measure and compare certainfinancial information on a non-GAAP basis,including information that managementuses in evaluating our business and activities.Non-GAAP financial informationshould be considered
32、in addition to,and not as a substitute for or as superior to,financial information prepared in conformity with U.S.GAAP.Any non-GAAPfinancial information presented in this Form 10-Q,including this ManagementsDiscussion and Analysis,is reconciled to its most directly comparable currentlyapplicable re
33、gulatory ratio or U.S.GAAP-basis measure.As part of our non-GAAP-basis measures,we present a fullyState Street Corporation|4MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONStaxable-equivalent NII that reports non-taxable revenue,such as interest incomeassociated wit
34、h tax-exempt investment securities,on a fully taxable-equivalentbasis,which we believe facilitates an investors understanding and analysis of ourunderlying financial performance and trends.We provide additional disclosures required by applicable bank regulatorystandards,including supplemental qualit
35、ative and quantitative information withrespect to regulatory capital(including market risk associated with our tradingactivities),the LCR and NSFR,summary results of annual State Street-run stresstests which we conduct under the Dodd-Frank Act,and recovery and resolution plandisclosures.These additi
36、onal disclosures are accessible on the Filings&reportstab of our website at .We have included our website address in this report as an inactive textualreference only.Information on our website is not incorporated by reference into thisForm 10-Q.We use acronyms and other defined terms for certain bus
37、iness terms andabbreviations,as defined in the acronyms list and glossary following theconsolidated financial statements in this Form 10-Q.Forward-Looking StatementsThis Form 10-Q,as well as other reports and proxy materials submitted by usunder the Securities Exchange Act of 1934,registration state
38、ments filed by us underthe Securities Act of 1933,our annual report to shareholders and other publicstatements we may make,may contain statements(including statements in ourManagements Discussion and Analysis included in such reports,as applicable)thatare considered“forward-looking statements”within
39、 the meaning of U.S.securitieslaws,including statements about our goals and expectations regarding ourbusiness,financial and capital condition,results of operations,strategies,costsavings and transformation initiatives,investment portfolio performance,climate,dividend and stock purchase programs,acq
40、uisitions,outcomes of legalproceedings,market growth,joint ventures and divestitures,client growth,newtechnologies,services and opportunities,sustainability and impact,human capital,as well as industry,governmental,regulatory,economic and market trends,initiatives and developments,the business envir
41、onment and other matters that donot relate strictly to historical facts.Terminology such as“expect,”“outlook,”“will,”“goal,”“target,”“strategy,”“may,”“estimate,”“plan,”“intend,”“objective,”“forecast,”“believe,”“priority,”“anticipate,”“seek,”and“trend,”or similar statements or variations of such term
42、s,are intended toidentify forward-looking statements,although not all forward-looking statementscontain such terms.Forward-looking statements are subject to various risks and uncertainties,which change over time,are based on managements expectations andassumptions at the time the statements are made
43、 and are not guarantees of futureresults.Managements expectations and assumptions,and the continued validity ofthe forward-looking statements,are subject to change due to a broad range offactors affecting the U.S.and global economies,regulatory environment and theequity,debt,currency and other finan
44、cial markets,as well as factors specific toState Street and its subsidiaries,including State Street Bank.Factors that couldcause changes in the expectations or assumptions on which forward-lookingstatements are based cannot be foreseen with certainty.Important factors that in thefuture could cause a
45、ctual results to differ materially from those envisaged inforward-looking statements,and that in some cases have affected us in the past,include,but are not limited to:Strategic RisksWe are subject to intense competition,which could negatively affect ourprofitability;We are subject to significant pr
46、icing pressure and variability in our financialresults and our AUC/A and AUM;Our development and completion of new products and services,includingState Street Alphaand those related to digital assets and artificialintelligence,may impose costs on us,involve dependencies on third partiesand may expos
47、e us to increased operational,model and other risks;Acquisitions,strategic alliances,joint ventures and divestitures,and theintegration,retention and development of the benefits of these transactions,including the consolidation of our operations joint ventures in India,poserisks for our business;and
48、Competition for qualified members of our workforce is intense,and we maynot be able to attract and retain the highly skilled people we need to supportour business.Financial Market RisksWe could be adversely affected by political,geopolitical,economic andmarket conditions,including,for example,as a r
49、esult of liquidity or capitaldeficiencies(actual or perceived)by other financial institutions and relatedmarket and government actions,the ongoing wars in Ukraine and in theMiddle East,major political elections globally,actions taken by centralbanks to address inflationary and growth pressures,monet
50、ary policytightening,periods of significant volatility in valuations State Street Corporation|5MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONSand liquidity or other disruptions in the markets for equity,fixed income andother assets classes globally or within speci
51、fic markets;We have significant global operations and clients that can be adverselyimpacted by disruptions in key global economies,including local,regionaland geopolitical developments affecting those economies;Our investment securities portfolio,consolidated financial condition andconsolidated resu
52、lts of operations could be adversely affected by changesin the financial markets,governmental action or monetary policy.Forexample,among other risks,increases in prevailing interest rates or marketconditions have led,and were they to occur in the future could further lead,to reduced levels of client
53、 deposits and resulting decreases in our NII or toportfolio management decisions resulting in reductions in our capital orliquidity ratios;Our business activities expose us to interest rate risk;We assume significant credit risk of counterparties,who may also havesubstantial financial dependencies o
54、n other financial institutions,and thesecredit exposures and concentrations could expose us to financial loss;Our fee revenue represents a significant portion of our revenue and issubject to decline based on,among other factors,market and currencydeclines,investment activities and preferences of our
55、 clients and theirbusiness mix;If we are unable to effectively manage our capital and liquidity,our financialcondition,capital ratios,results of operations and business prospects couldbe adversely affected;Our calculations of risk exposures,total RWA and capital ratios depend ondata inputs,formulae,
56、models,correlations and assumptions that aresubject to change,which could materially impact our risk exposures,ourtotal RWA and our capital ratios from period to period;We may need to raise additional capital or debt in the future,which may notbe available to us or may only be available on unfavorab
57、le terms;andIf we experience a downgrade in our credit ratings,or an actual or perceivedreduction in our financial strength,our borrowing andcapital costs,liquidity and reputation could be adversely affected.Compliance and Regulatory RisksOur business and capital-related activities,including common
58、sharerepurchases,may be adversely affected by regulatory requirements andconsiderations,including capital,credit and liquidity;We face extensive and changing government regulation and supervision inthe jurisdictions in which we operate,which may increase our costs andcompliance risks and may affect
59、our business activities and strategies;Our businesses may be adversely affected by government enforcement andlitigation;Our businesses may be adversely affected by increased and conflictingpolitical and regulatory scrutiny of asset management stewardship andcorporate sustainability or Environmental,
60、Social and Governance(ESG)practices;Any misappropriation of the confidential information we possess could havean adverse impact on our business and could subject us to regulatoryactions,litigation and other adverse effects;Changes in accounting standards may adversely affect our consolidatedresults
61、of operations and financial condition;Changes in tax laws,rules or regulations,challenges to our tax positionsand changes in the composition of our pre-tax earnings may increase oureffective tax rate;We could face liabilities for withholding and other non-income taxes,including in connection with ou
62、r services to clients,as a result of taxauthority examinations;andOur businesses may be negatively affected by adverse publicity or otherreputational harm.Operational and Technology RisksOur internal control environment may be inadequate,fail or be circumvented,and actual results may differ from tho
63、se expressed as a result of a number offactors,including the manifestation of operational risk as follows:Our business may be negatively affected by our failure to update andmaintain our technology infrastructure,or otherwise meet the increasingresiliency expectations of our clients and regulators,o
64、r as a result of acyber-attack or similar vulnerability in our or business partnersinfrastructure;State Street Corporation|6MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONSOur risk management framework,models and processes may not beeffective in identifying or miti
65、gating risk and reducing the potential for relatedlosses,and a failure or circumvention of our controls and procedures,orerrors or delays in our operational and transaction processing,or those ofthird parties,could have an adverse effect on our business,financialcondition,operating results and reput
66、ation;Shifting and maintaining operational activities to non-U.S.jurisdictions,changing our operating model,including by consolidating our operationsjoint ventures in India,and outsourcing to,or insourcing from,third partiesexpose us to increased operational risk,geopolitical risk and reputationalha
67、rm and may not result in expected cost savings or operationalimprovements;Attacks or unauthorized access to our or our business partners or clientsinformation technology systems or facilities,such as cyber-attacks or otherdisruptions to our or their operations,could result in significant costs,reput
68、ational damage and impacts on our business activities;Long-term contracts and customizing service delivery for clients expose usto increased operational risk,pricing and performance risk;We may not be able to protect our intellectual property or may infringe uponthe rights of third parties;The quant
69、itative models we use to manage our business may contain errorsthat could adversely impact our business,financial condition,operatingresults and regulatory compliance;Our reputation and business prospects may be damaged if investors in thecollective investment pools we sponsor or manage incur substa
70、ntial lossesin these investment pools or are restricted in redeeming their interests inthese investment pools;The impacts of climate change,and regulatory responses,and disclosurerequirements related to such risks,could adversely affect us;andWe may incur losses or face negative impacts on our busin
71、ess as a result ofunforeseen events,including terrorist attacks,natural disasters,climatechange,pandemics,global conflicts,an abrupt banking crisis and othergeopolitical events,which may have a negative impact on our business andoperations.Actual outcomes and results may differ materially from what
72、is expressed in ourforward-looking statements and from our historical financial results due to thefactors discussed in this section and elsewhere in this Form 10-Q or disclosed in ourother SEC filings.Forward-looking statements in this Form 10-Q should not berelied on as representing our expectation
73、s or assumptions as of any timesubsequent to the time this Form 10-Q is filed with the SEC.We undertake noobligation to revise our forward-looking statements after the time they are made.The factors discussed herein are not intended to be a complete statement of allrisks and uncertainties that may a
74、ffect our businesses.We cannot anticipate alldevelopments that may adversely affect our business or operations or ourconsolidated results of operations,financial condition or cash flows.Forward-looking statements should not be viewed as predictions and shouldnot be the primary basis on which investo
75、rs evaluate State Street.Any investor inState Street should consider all risks and uncertainties disclosed in our SEC filings,including our filings under the Securities Exchange Act of 1934,in particular ourannual reports on Form 10-K,our quarterly reports on Form 10-Q and our currentreports on Form
76、 8-K,and our registration statements filed under the Securities Actof 1933,all of which are accessible on the SECs website at www.sec.gov or on theFilings&reports tab of our website at .State Street Corporation|7MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONSOVERV
77、IEW OF FINANCIAL RESULTSTABLE 1:OVERVIEW OF FINANCIAL RESULTSThree Months Ended June 30,%Change(Dollars in millions,except per share amounts)20242023Total fee revenue$2,456$2,419 2%Net interest income735 691 6 Total revenue3,191 3,110 3 Provision for credit losses10(18)nmTotal expenses2,269 2,212 3
78、Income before income tax expense912 916 Income tax expense201 153 31 Net income$711$763(7)Adjustments to net income:Dividends on preferred stock$(55)$(37)49 Earnings allocated to participating securities(1)Net income available to common shareholders$655$726(10)Earnings per common share:Basic$2.18$2.
79、20(1)Diluted2.15 2.17(1)Average common shares outstanding(in thousands):Basic300,564 329,383(9)Diluted304,765 333,540(9)Cash dividends declared per common share$0.69$0.63 10 Return on average common equity11.9%13.0%(110)bpsPre-tax margin28.6 29.5(90)Six Months Ended June 30,%Change(Dollars in millio
80、ns,except per share amounts)20242023Total fee revenue$4,878$4,754 3%Net interest income1,451 1,457 Total revenue6,329 6,211 2 Provision for credit losses37 26 42 Total expenses4,782 4,581 4 Income before income tax expense1,510 1,604(6)Income tax expense336 292 15 Net income$1,174$1,312(11)Adjustmen
81、ts to net income:Dividends on preferred stock$(100)$(60)67 Earnings allocated to participating securities(1)(1)Net income available to common shareholders$1,073$1,251(14)Earnings per common share:Basic$3.56$3.73(5)Diluted3.52 3.68(4)Average common shares outstanding(in thousands):Basic301,278 335,21
82、2(10)Diluted305,354 339,473(10)Cash dividends declared per common share$1.38$1.26 10 Return on average common equity9.8%11.1%(130)bpsPre-tax margin23.9 25.8(190)Additional information about our preferred stock dividends is provided in Note 12 to the consolidated financial statements in this Form 10-
83、Q.Represents the portion of net income available to common equity allocated to participating securities,composed of unvested and fullyvested SERP(supplemental executive retirement plans)shares and fully vested deferred director stock awards,which are equity-basedawards that contain non-forfeitable r
84、ights to dividends,and are considered to participate with the common stock in undistributed earnings.Not meaningfulThe following“Financial Results and Highlights”section provides informationrelated to significant events,as well as highlights of our consolidated financialresults for the second quarte
85、r of 2024 presented in Table 1:Overview of FinancialResults.More detailed information about our consolidated financial results,includingthe comparison of our financial results for the three and six months ended June 30,2024 compared to the same periods of 2023,is provided under“ConsolidatedResults o
86、f Operations”,Line of Business Information and Capital which followsthese sections,as well as in our consolidated financial statements in this Form 10-Q.In this Managements Discussion and Analysis,where we describe the effects ofchanges in foreign currency translation,those effects are determined by
87、 applyingapplicable weighted average FX rates from the relevant 2023 period to the relevant2024 period results.Financial Results and HighlightsSecond quarter of 2024 financial performanceEarnings per share(EPS)of$2.15,in the second quarter of 2024,decreased 1%as compared to the same period of 2023.T
88、otal revenue increased 3%in the second quarter of 2024,compared to thesame period of 2023,due to higher NII and fee revenue.Total expenses increased 3%in the second quarter of 2024,compared tothe same period of 2023,as continued business investments and revenue-related costs were partially offset by
89、 productivity savings.Pre-tax margin of 28.6%in the second quarter of 2024 decreased from29.5%in the same period of 2023,primarily due to higher total expensesand provision for credit losses.Return on equity was 11.9%in the secondquarter of 2024,a decrease from 13.0%in the same period of 2023,primar
90、ily due to a decrease in net income available to commonshareholders.Operating leverage was 0.02%points in the second quarter of 2024.Operating leverage represents the difference between the percentagechange in total revenue and the percentage change in total expenses,ineach case relative to the same
91、 period of the prior year.Fee operating leverage was(1.1)%points in the second quarter of 2024.Fee operating leverage represents the difference between the percentagechange in total fee revenue and the percentage change in total expenses,(1)(2)(1)(2)(1)(2)nmState Street Corporation|8MANAGEMENTS DISC
92、USSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONSin each case relative to the same period of the prior year.We returned a total of approximately$407 million to our shareholders in theform of common share repurchases and common stock dividends.Completed the consolidation of our fina
93、l operations joint venture in India,further advancing the plan to transform our operating model to unlockefficiency savings and improve client experience.The joint ventureconsolidation,together with a prior joint venture consolidation in October2023,increased our headcount by approximately 26%as of
94、June 30,2024,compared to June 30,2023.Associated headcount cost was previouslyreflected in compensation and employee benefits expenses.RevenueTotal fee revenue increased 2%in the second quarter of 2024,compared tothe same period of 2023,reflecting higher management fees and FX tradingservices revenu
95、e,partially offset by lower servicing fees,securities financerevenue,software and processing fees and other fee revenue.Servicing fee revenue decreased 2%in the second quarter of 2024,compared to the same period of 2023,as higher average equity marketlevels and net new business,excluding a previousl
96、y disclosed clienttransition,were more than offset by pricing headwinds,a previouslydisclosed client transition and lower client activity and adjustments,including asset mix shift.Management fee revenue increased 11%in the second quarter of 2024,compared to the same period of 2023,as higher average
97、market levels andnet inflows from prior periods were partially offset by the impacts of astrategic ETF repricing initiative.Foreign exchange trading services revenue increased 11%in the secondquarter of 2024,compared to the same period of 2023,primarily due tohigher client FX volumes,partially offse
98、t by lower spreads associated withsubdued FX volatility.Securities finance revenue decreased 8%in the second quarter of 2024,compared to the same period of 2023,largely driven by lower spreadsprimarily resulting from muted industry specials activity,partially offset byhigher balances.Software and pr
99、ocessing fees revenue decreased 3%in the second quarterof 2024,compared to the same period of 2023,mainly driven by lower on-premises renewals in front office software and data.Other fee revenue decreased$10 million in the second quarter of 2024,compared to the same period of 2023.NII increased 6%in
100、 the second quarter of 2024,compared to the sameperiod of 2023,primarily due to higher investment securities yields and loangrowth,partially offset by deposit mix shift towards interest-bearingdeposits.Provision for Credit LossesIn the second quarter of 2024,we recorded a$10 million provision for cr
101、editlosses,primarily reflecting an increase in loan loss reserves associated withcertain commercial real estate loans,which was partially offset by animproved economic outlook.This compared to an$18 million reserverelease recorded in the same period of 2023.ExpensesTotal expenses increased 3%in the
102、second quarter of 2024,compared tothe same period of 2023,as continued business investments and revenue-related costs were partially offset by productivity savings.AUC/A and AUMAUC/A of$44.31 trillion as of June 30,2024,increased 12%compared toJune 30,2023,primarily due to higher quarter-end market
103、levels,clientflows and net new business.In the second quarter of 2024,newlyannounced asset servicing mandates totaled approximately$291 billion ofAUC/A.We onboarded approximately$299 billion of AUC/A during thesecond quarter of 2024.Servicing assets remaining to be installed in futureperiods totaled
104、 approximately$2.39 trillion of AUC/A as of June 30,2024.AUM of$4.4 trillion as of June 30,2024,increased 15%compared to June30,2023,primarily due to higher quarter-end market levels and net inflows.CapitalIn the second quarter of 2024,we returned a total of approximately$407 million to our sharehol
105、ders in the form of common share repurchasesand common stock dividends.We declared aggregate common stock dividends of$0.69 pershare,totaling$207 million in the secondState Street Corporation|9MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONSquarter of 2024,compared
106、 to$0.63 per share,totaling$203 millionin the same period of 2023,representing an increase ofapproximately 10%on a per share basis.In July 2024,we declared third quarter common stock dividends of$0.76 per share,representing a 10%increase on a per share basisfrom dividends declared in both the third
107、quarter of 2023 and thesecond quarter of 2024.In the second quarter of 2024,we acquired an aggregate of 2.7million shares of common stock at an average per share cost of$74.52 and an aggregate cost of approximately$200 million.Thesepurchases were all conducted under the share repurchase programappro
108、ved by our Board of Directors in January 2024.Our standardized CET1 capital ratio decreased to 11.2%as of June 30,2024,compared to 11.6%as of December 31,2023,primarily driven by theexpected normalization of RWA as of June 30,2024.Our Tier 1 leverageratio decreased to 5.3%as of June 30,2024,compared
109、 to 5.5%as ofDecember 31,2023,primarily due to higher consolidated average assetsreflecting higher client deposits and an increase in repo-style transactions,partially offset by the net issuance of preferred stock.Given the currentglobal economic environment,and our plans for capital distributions,w
110、ecurrently expect our CET1 capital ratio and Tier 1 leverage ratio to remainwithin or above our target ranges of 10-11%and 5.25-5.75%,respectively.On July 24,2024,we issued 850 thousand depositary shares,eachrepresenting a 1/100th ownership interest in a share of fixed rate reset,non-cumulative perp
111、etual preferred stock,Series J,without par value per share,with a liquidation preference of$100,000 per share(equivalent to$1,000per depositary share),in a public offering.The net proceeds from theoffering were approximately$842 million.CONSOLIDATED RESULTS OF OPERATIONSThis section discusses our co
112、nsolidated results of operations for the three andsix months ended June 30,2024 compared to the same periods of 2023 and shouldbe read in conjunction with the consolidated financial statements and accompanyingnotes to the consolidated financial statements in this Form 10-Q.Total RevenueTABLE 2:TOTAL
113、 REVENUEThree Months Ended June 30,%Change(Dollars in millions)20242023Fee revenue:Back office services$1,146$1,164(2)%Middle office services93 95(2)Servicing fees1,239 1,259(2)Management fees511 461 11 Foreign exchange trading services336 303 11 Securities finance108 117(8)Front office software and
114、 data152 162(6)Lending related and other fees62 59 5 Software and processing fees214 221(3)Other fee revenue48 58(17)Total fee revenue2,456 2,419 2 Net interest income:Interest income2,998 2,232 34 Interest expense2,263 1,541 47 Net interest income735 691 6 Total revenue$3,191$3,110 3 Six Months End
115、ed June 30,%Change(Dollars in millions)20242023Fee revenue:Back office services$2,282$2,295(1)%Middle office services185 181 2 Servicing fees2,467 2,476 Management fees1,021 918 11 Foreign exchange trading services667 645 3 Securities finance204 226(10)Front office software and data296 271 9 Lending
116、 related and other fees125 115 9 Software and processing fees421 386 9 Other fee revenue98 103(5)Total fee revenue4,878 4,754 3 Net interest income:Interest income5,887 4,259 38 Interest expense4,436 2,802 58 Net interest income1,451 1,457 Total revenue$6,329$6,211 2 Fee RevenueTable 2:Total Revenue
117、,provides the breakout of fee revenue for the three andsix months ended June 30,2024 and 2023.Servicing and management feescollectively made up approximately 71%and 72%of the total fee revenue in thethree and six months ended June 30,2024,respectively,and 71%of the total feerevenue in both the three
118、 and six months ended June 30,2023.State Street Corporation|10MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONSServicing Fee RevenueServicing fees,as presented in Table 2:Total Revenue,decreased 2%in thethree months ended June 30,2024,compared to the same period of
119、2023,ashigher average equity market levels and net new business,excluding a previouslydisclosed client transition,were more than offset by pricing headwinds,a previouslydisclosed client transition and lower client activity and adjustments,including assetmix shift.Servicing fees were flat in the six
120、months ended June 30,2024,comparedto the same period of 2023.Servicing fees generated outside the U.S.were approximately 47%of totalservicing fees in both the three and six months ended June 30,2024,and 47%and46%of total servicing fees in the three and six months ended June 30,2023,respectively.Serv
121、icing fee revenue comprises revenue from a range of services provided toour clients,including certain Alpha servicing mandates,consisting of core custodyservices,accounting,reporting and administration,which we refer to collectively asback office and middle office services.The nature and mix of serv
122、ices provided andthe asset classes for which the services are performed affect our servicing fees.Thebasis for fees will differ across regions and clients.Generally,our servicing feerevenues are affected by several factors,including changes in market valuations,client activity and asset flows,net ne
123、w business and the manner in which we priceour services.For servicing fees for which we have not yet issued an invoice to ourclients as of period end,we include an estimate of the impact of changes in marketvaluations,client activity and flows,net new business and changes in pricing in ourrevenues.C
124、hanges in Market ValuationsOur servicing fee revenue is impacted by both our levels and the geographicand product mix of our AUC/A.Increases or decreases in market valuations have acorresponding impact on the level of our AUC/A and servicing fee revenues,thoughthe degree of impact will vary dependin
125、g on asset types and classes,andgeography of assets held within our clients portfolios.For certain asset classeswhere thevaluation process is more complex,including alternative investments,or where ourvaluation is dependent on third party information,AUC/A is reported on a time lag,typically one-mon
126、th.For those asset classes,the impact of market levels on ourreported AUC/A does not reflect current period-end market levels.Over the five years ended December 31,2023,we estimate that worldwideequity and fixed income market valuations impacted our servicing fees revenue byapproximately 2%on averag
127、e with a range of(4)%to 8%annually andapproximately 1%and(4)%in 2023 and 2022,respectively.The impact of changesin worldwide fixed income markets on our servicing fees,which historically wasincluded within client activity and asset flows,is now reflected within change inmarket valuations.See Table 3
128、:Daily Averages,Month-End Averages and Quarter-End Equity Indices for selected indices.While the specific indices presented areindicative of general market trends,the asset types and classes relevant toindividual client portfolios can and do differ,and the performance of associatedrelevant indices a
129、nd of client portfolios can therefore differ from the performance ofthe indices presented.In addition,our asset classifications may differ from thoseindustry classifications presented.Assuming that all other factors remain constant,including client activity,assetflows and pricing,we estimate,using r
130、elevant information as of June 30,2024 that a10%increase or decrease in worldwide equity valuations,on a weighted averagebasis,over the relevant periods for which our servicing fees are calculated,wouldresult in a corresponding change in our total servicing fee revenues,on average andover multiple q
131、uarters,of approximately 3%.We estimate,similarly assuming allother factors remain constant and using relevant information as of June 30,2024,that changes in worldwide fixed income markets,which on a weighted averagebasis and over time are typically less volatile than worldwide equity markets,have a
132、smaller corresponding impact on our servicing fee revenues on average and overtime.State Street Corporation|11MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONSTABLE 3:DAILY AVERAGES,MONTH-END AVERAGES AND QUARTER-END EQUITY INDICESDaily Averages of IndicesMonth-End
133、Averages of IndicesQuarter-End IndicesThree Months Ended June 30,Three Months Ended June 30,As of June 30,20242023%Change20242023%Change20242023%ChangeS&P 5005,247 4,206 25%5,258 4,267 23%5,460 4,450 23%MSCI EAFE2,325 2,122 10 2,317 2,106 10 2,315 2,132 9 MSCI Emerging Markets1,063 987 8 1,060 975 9
134、 1,086 989 10 MSCI ACWI782 658 19 781 661 18 802 683 17 Daily Averages of IndicesMonth-End Averages of IndicesSix Months Ended June 30,Six Months Ended June 30,20242023%Change20242023%ChangeS&P 5005,122 4,103 25%5,162 4,159 24%MSCI EAFE2,294 2,091 10 2,306 2,094 10 MSCI Emerging Markets1,037 992 5 1
135、,037 985 5 MSCI ACWI765 646 18 770 651 18 The index names listed in the table are service marks of their respective owners.TABLE 4:QUARTER-END DEBT INDICESAs of June 30,20242023%ChangeBloomberg U.S.Aggregate Bond Index2,147 2,092 3%Bloomberg Global Aggregate Bond Index456 452 1 The index names liste
136、d in the table are service marks of their respective owners.Client Activity and Asset FlowsClient activity and asset flows are impacted by the number of transactions we execute on behalf of our clients,including FX settlements,equity and derivative trades,and wiretransfer activity,as well as actions
137、 by our clients to change the asset class in which their assets are invested.Our servicing fee revenues are impacted by a number of factors,including transaction volumes,asset levels and asset classes in which funds are invested,as well as industry trends associated with these client-related activit
138、ies.Our clients may change the asset classes in which their assets are invested,based on their market outlook,risk acceptance tolerance or other considerations.Over the fiveyears ended December 31,2023,we estimate that client activity and asset flows,together,impacted our servicing fees revenue by a
139、pproximately(1)%on average with a range of(3)%to 1%annually and approximately(3)%and 0%in 2023 and 2022,respectively.As noted under Changes in Market Valuations in this section,this analysis now excludes,butin prior reporting previously included,the impact of changes in worldwide fixed income market
140、s on our servicing fees.See Table 5:Industry Asset Flows for selected asset flowinformation.While the asset flows presented are indicative of general market trends,the asset types and classes relevant to individual client portfolios can and do differ,and our flowsmay differ from those market trends.
141、In addition,our asset classifications may differ from those industry classifications presented.TABLE 5:INDUSTRY ASSET FLOWSThree Months Ended June 30,(In billions)20242023North America-(U.S.Domiciled)-Morningstar Direct Market DataLong-Term Funds$(110.8)$(113.4)Money Market65.7 175.4 Exchange-Traded
142、 Fund205.7 136.2 Total Flows$160.6$198.2 EMEA-Morningstar Direct Market DataLong-Term Funds$32.7$(13.2)Money Market19.7 13.4 Exchange-Traded Fund47.6 27.1 Total Flows$100.0$27.3 Industry data is provided for illustrative purposes only.It is not intended to reflect our activity or our clients activit
143、y and is indicative of only segments of the entire industry.Source:Morningstar.The data includes long-term mutual funds,ETFs and money market funds.Mutual fund data represents estimates of net new cash flow,which is new sales minus redemptions combined with net exchanges,while ETF data represents ne
144、t issuance,which is gross issuance lessgross redemptions.Data for Fund of Funds,Feeder funds and Obsolete funds were excluded from the series to prevent double counting.Data is from the Morningstar Direct Asset Flows database.The second quarter of 2024 data for North America(U.S.domiciled)includes M
145、orningstar direct actuals for April 2024 and May 2024 and Morningstar direct estimates for June 2024.The long-term fund flows reported by Morningstar direct in North America are composed of U.S.domiciled market flows mainly in Equities,Allocation and Fixed-Income asset classes.The long-term fund flo
146、ws reported by Morningstar direct in EMEA are composed of the European market flows mainlyin Equities,Allocation and Fixed-Income asset classes.The second quarter of 2024 data for Europe is on a rolling three month basis for March 2024 through May 2024,sourced by Morningstar.(1)(1)(1)(1)(1)(2)(3)(4)
147、(1)(2)(5)(4)(1)(2)(3)(4)(5)State Street Corporation|12MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONSNet New BusinessOver the five years ended December 31,2023,net new business,which includes business both won and lost,has affected our servicing fee revenues by ap
148、proximately 0%onaverage with a range of 0%to 1%annually and approximately 1%in both 2023 and 2022.Gross investment servicing mandates were$291 billion and$765 billion of AUC/A in the three and six months ended June 30,2024,respectively,and$1.80 trillion of AUC/A peryear on average over the five year
149、s ended December 31,2023,ranging from approximately$0.79 trillion to$3.52 trillion of AUC/A annually in any given year.Servicing fee revenue associated with new servicing mandates may vary based on the breadth of services provided,the time required to install the assets,and the types ofassets instal
150、led.Revenues associated with new mandates are not reflected in our servicing fee revenue until the assets have been installed.Our installation timeline,in general,can range from6 to 36 months,with the average installation timeline being approximately 9 to 12 months over the past 2 years.We expect th
151、at our more complex installations,including new StateStreet Alpha mandates,will generally be on the longer end of the 6 to 36 months range.With respect to the current asset mandates of approximately$2.39 trillion of AUC/A that areyet to be installed as of June 30,2024,we expect the conversion will o
152、ccur over the coming 24 months,with approximately 30-40%expected to be installed in the remainder of 2024,with the balance expected to be installed throughout 2025 and 2026.The expected timing of these installations is subject to change due to a variety of factors,including adjustedimplementation sc
153、hedules agreed with clients,scope adjustments,and product and functionality changes.PricingThe industry in which we operate has historically faced pricing pressure,and our servicing fee revenues are also affected by such pressures today.Consequently,noassumption should be drawn as to future revenue
154、run rate from announced servicing wins,as the amount of revenue associated with AUC/A,once installed,can vary materially.Onaverage,over the five years ended December 31,2023,we estimate that pricing pressure with respect to existing clients has impacted our servicing fees by approximately(3)%annuall
155、y,with the impact ranging from(2)%to(4)%in any given year and approximately(2)%in both 2023 and 2022.Pricing concessions can be a part of a contract renegotiationwith a client including terms that may benefit us,such as extending the term of our relationship with the client,expanding the scope of se
156、rvices that we provide or reducing ourdependency on manual processes through the standardization of the services we provide.The timing of the impact of additional revenue generated by anticipated additional services,and the amount of revenue generated,may differ from expectations due to the impact o
157、f pricing concessions on existing services due to the necessary time required to onboardthose new services or process changes,the nature of those services and client investment practices and other factors.These same market pressures also impact the fees wenegotiate when we win business from new clie
158、nts.Historically,and based on an indicative sample of revenue,we estimate that approximately 60%,on average,of our servicing fee revenues have been variable due to changesin asset valuations including changes in daily average valuations of AUC/A;another approximately 15%,on average,of our servicing
159、fees are impacted by the volume of activity inthe funds we serve;and the remaining approximately 25%of our servicing fees tend not to be variable in nature nor impacted by market fluctuations or values.Based on the impact of the above,client activity and asset flows,net new business and pricing,note
160、d drivers of our servicing fee revenue will vary depending on the mix ofproducts and services we provide to our clients.The full impact of changes in market valuations and the volume of activity in the funds may not be fully reflected in our servicing feerevenues in the periods in which the changes
161、occur,particularly in periods of higher volatility.State Street Corporation|13MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONSTABLE 6:ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY PRODUCT(In billions)June 30,2024December 31,2023June 30,2023Collective funds,includin
162、g ETFs$14,573$14,070$13,210 Mutual funds11,645 11,009 10,438 Pension products8,916 8,352 8,037 Insurance and other products9,178 8,379 7,904 Total$44,312$41,810$39,589 TABLE 7:ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY ASSET CLASS(In billions)June 30,2024December 31,2023June 30,2023Equities$26,29
163、1$24,317$22,454 Fixed-income11,303 11,043 10,812 Short-term and other investments6,718 6,450 6,323 Total$44,312$41,810$39,589 TABLE 8:ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY GEOGRAPHY(In billions)June 30,2024December 31,2023June 30,2023Americas$31,763$29,951$28,220 Europe/Middle East/Africa9,4
164、06 8,913 8,658 Asia/Pacific3,143 2,946 2,711 Total$44,312$41,810$39,589 Consistent with past practice,AUC/A values for certain asset classes are based on a lag,typically one-month.Geographic mix is generally based on the domicile of the entity servicing the funds and is not necessarily representativ
165、e of the underlying asset mix.Asset servicing mandates newly announced in the second quarter of 2024 totaled approximately$291 billion of AUC/A.Servicing assets remaining to be installed in futureperiods totaled approximately$2.39 trillion as of June 30,2024,which will be reflected in AUC/A in futur
166、e periods after installation and will generate servicing fee revenue insubsequent periods.The full revenue impact of such mandates will be realized as the assets are installed and additional services are added over that period.New asset servicing mandates,including Alpha servicing mandates,may be su
167、bject to completion of definitive agreements,consents or assignments,approval of applicableboards and shareholders and customary regulatory approvals.New asset servicing mandates and servicing assets remaining to be installed in future periods exclude certain newbusiness which has been contracted,bu
168、t for which the client has not yet provided permission to publicly disclose.These excluded assets,which from time to time may be significant,will be included in new asset servicing mandates and reflected in servicing assets remaining to be installed in the period in which the client provides its per
169、mission.Servicingmandates and servicing assets remaining to be installed in future periods are presented on a gross basis based on factors present on or about the time we determine the business tobe won by us and are not updated based on subsequent developments,including changes in assets,market val
170、uations,scope and,potentially,termination.Such assets therefore donot include the impact of clients who have notified us during the period of their intent to terminate or reduce their relationship with us,which from time to time may be significant.With respect to these new servicing mandates,once in
171、stalled we may provide various services,including back office services such as custody and safekeeping,transactionprocessing and trade settlement,fund administration,reporting and record keeping,security servicing,fund accounting,middle office services such as investment book of records,transaction
172、management,loans,cash derivatives and collateral services,recordkeeping,client reporting and investment analytics,markets services such as FX trading services,liquidity solutions,currency and collateral management and securities finance,and front office services such as portfolio management solution
173、s,risk analytics,scenario analysis,performance and attribution,trade order and execution management,pre-trade compliance and ESG investment tools.Revenues associated with new servicing mandates may varybased on the breadth of services provided,the timing of installation,and the types of assets.As pr
174、eviously disclosed in early 2021,due to a decision to diversify providers,one of our large asset servicing clients is moving a significant portion of its ETF assets currentlywith State Street to one or more other providers.Prior to the commencement of the transition of assets,which began in 2022,we
175、estimated that the financial impact of this transitionrepresented approximately 1.9%of our 2021 total fee revenue.We began to see the impact of the transition on our fee revenue and income growth trends primarily towards the endof 2023,with the remainder expected to be realized through 2025 as the t
176、ransition continues.On a quarterly run rate basis,we estimate that the second quarter of 2024 reflectedapproximately two-thirds of the revenue impact of the exiting business.We expect to continue as a significant service provider for this client after this transition and for the client tocontinue to
177、 be meaningful to our business.(1)(1)(1)(2)(1)(2)State Street Corporation|14MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONSManagement Fee RevenueManagement fees increased 11%in both the three and six months ended June 30,2024,compared to the same periods of 2023,a
178、s higher average market levels and netinflows from prior periods were partially offset by the impacts of a strategic ETF repricing initiative.Management fees generated outside the U.S.were approximately 25%of total management fees in both the three and six months ended June 30,2024,and 26%of totalma
179、nagement fees in both the three and six months ended June 30,2023.Management fees generally are affected by our level of AUM,which we report based on month-end valuations.Management fees for certain components of managed assets,such as ETFs,mutual funds and Undertakings for Collective Investments in
180、 Transferable Securities,are affected by daily average valuations of AUM.Management fee revenue ismore sensitive to market valuations than servicing fee revenue,as a higher proportion of the underlying services provided,and the associated management fees earned,aredependent on equity and fixed-incom
181、e security valuations.Additional factors,such as the relative mix of assets managed,may have a significant effect on our management feerevenue.While certain management fees are directly determined by the values of AUM and the investment strategies employed,management fees may reflect other factors,i
182、ncluding performance fee arrangements,as well as our relationship pricing for clients.Asset-based management fees for passively managed products,to which our AUM is currently primarily weighted,are generally charged at a lower fee on AUM than for activelymanaged products.Actively managed products ma
183、y also include performance fee arrangements which are recorded when the fee is earned,based on predetermined benchmarksassociated with the applicable accounts performance.In light of the above,we estimate,using relevant information as of June 30,2024,and assuming that all other factors remain consta
184、nt,including the impact of business won andlost and client flows,that:A 10%increase or decrease in worldwide equity valuations,on a weighted average basis,over the relevant periods for which our management fees are calculated,wouldresult in a corresponding change in our total management fee revenues
185、,on average and over multiple quarters,of approximately 5%;andchanges in worldwide fixed income markets,which on a weighted average basis and over time are typically less volatile than worldwide equity markets,will have asignificantly smaller corresponding impact on our management fee revenues on av
186、erage and over time.Daily averages,month-end averages and quarter-end indices demonstrate worldwide changes in equity and debt markets that affect our management fee revenue.Quarter-endindices affect the values of AUM as of those dates.See Table 3:Daily Averages,Month-End Averages and Quarter-End Eq
187、uity Indices for selected indices.While the specific indicespresented are indicative of general market trends,the asset types and classes relevant to individual client portfolios can and do differ,and the performance of associated relevantindices and of client portfolios can therefore differ from th
188、e performance of the indices presented.In addition,our asset classifications may differ from those industry classificationspresented.State Street Corporation|15MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONSTABLE 9:ASSETS UNDER MANAGEMENT BY ASSET CLASS AND INVEST
189、MENT APPROACH(In billions)June 30,2024December 31,2023June 30,2023Equity:Active$51$47$59 Passive2,708 2,466 2,287 Total equity2,759 2,513 2,346 Fixed-income:Active28 71 84 Passive555 538 505 Total fixed-income583 609 589 Cash483 467 390 Multi-asset-class solutions:Active22 21 25 Passive327 289 220 T
190、otal multi-asset-class solutions349 310 245 Alternative investments:Active10 11 36 Passive185 192 181 Total alternative investments195 203 217 Total$4,369$4,102$3,787 Includes both floating-and constant-net-asset-value portfolios held in commingled structures or separate accounts.Includes real estat
191、e investment trusts,currency and commodities,including SPDR Gold Shares and SPDR Gold MiniSharesSM Trust.We are not the investment manager for the SPDR Gold Shares and SPDRGold MiniSharesSM Trust,but act as the marketing agent.AUM for passive alternative investments has been revised from prior prese
192、ntations.TABLE 10:GEOGRAPHIC MIX OF ASSETS UNDER MANAGEMENT(In billions)June 30,2024December 31,2023June 30,2023North America$3,195$3,028$2,784 Europe/Middle East/Africa665 577 544 Asia/Pacific509 497 459 Total$4,369$4,102$3,787 Geographic mix is based on client location or fund management location.
193、AUM for passive alternative investments has been revised from prior presentations.TABLE 11:EXCHANGE-TRADED FUNDS BY ASSET CLASS(In billions)June 30,2024December 31,2023June 30,2023Alternative Investments$77$73$70Equity1,1571,038919Multi Asset111Fixed-Income159156142Total Exchange-Traded Funds$1,394$
194、1,268$1,132 ETFs are a component of AUM presented in the preceding table.Includes real estate investment trusts,currency and commodities,including SPDR Gold Shares and SPDR Gold MiniShares Trust.We are not the investment manager for the SPDR Gold Shares and SPDR GoldMiniShares Trust,but act as the m
195、arketing agent.(1)(1)(2)(3)(1)(2)(3)(1)(2)(1)(2)(1)(2)(1)(2)SM SMState Street Corporation|16MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONSTABLE 12:ACTIVITY IN ASSETS UNDER MANAGEMENT BY PRODUCT CATEGORY(In billions)EquityFixed-IncomeCashMulti-Asset-Class Solution
196、sAlternative InvestmentsTotalBalance as of December 31,2022$2,129$554$376$209$213$3,481 Long-term institutional flows,net(25)1 10(2)(16)Exchange-traded fund flows,net(12)5 1(6)Cash fund flows,net (4)(4)Total flows,net(37)6(4)10(1)(26)Market appreciation(depreciation)120 14 3 11 8 156 Foreign exchang
197、e impact 1 1 2 Total market/foreign exchange impact120 15 3 12 8 158 Balance as of March 31,2023$2,212$575$375$231$220$3,613 Long-term institutional flows,net(23)18 7(1)1 Exchange-traded fund flows,net27 1 (1)27 Cash fund flows,net 10 10 Total flows,net4 19 10 7(2)38 Market appreciation(depreciation
198、)138 5 7(2)148 Foreign exchange impact(8)(5)1(12)Total market/foreign exchange impact130(5)5 7(1)136 Balance as of June 30,2023$2,346$589$390$245$217$3,787 Balance as of December 31,2023$2,513$609$467$310$203$4,102 Long-term institutional flows,net(3)(23)14(12)(24)Exchange-traded fund flows,net2 3 (
199、4)1 Cash fund flows,net 9 9 Total flows,net(1)(20)9 14(16)(14)Market appreciation(depreciation)220(4)6 12 9 243 Foreign exchange impact(20)(7)(1)(1)(3)(32)Total market/foreign exchange impact200(11)5 11 6 211 Balance as of March 31,2024$2,712$578$481$335$193$4,299 Long-term institutional flows,net(1
200、3)1 1 8(5)(8)Exchange-traded fund flows,net2 4 6 Cash fund flows,net (4)(4)Total flows,net(11)5(3)8(5)(6)Market appreciation(depreciation)62 4 5 6 6 83 Foreign exchange impact(4)(4)1(7)Total market/foreign exchange impact58 5 6 7 76 Balance as of June 30,2024$2,759$583$483$349$195$4,369 Includes bot
201、h floating and constant-net-asset-value portfolios held in commingled structures or separate accounts.Includes real estate investment trusts,currency and commodities,including SPDR Gold Shares and SPDR Gold MiniShares Trust.We are not the investment manager for the SPDR Gold Shares and SPDRGold Mini
202、Shares Trust,but act as the marketing agent.AUM for passive alternative investments has been revised from prior presentations.Amounts represent long-term portfolios,excluding ETFs.(1)(2)(3)(4)(4)(4)(4)(1)(2)SMSM(3)(4)State Street Corporation|17MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITI
203、ONAND RESULTS OF OPERATIONSForeign Exchange Trading ServicesForeign exchange trading services revenue,as presented in Table 2:TotalRevenue,increased 11%in the three months ended June 30,2024,compared tothe same period of 2023,primarily due to higher client FX volumes,partially offsetby lower spreads
204、 associated with subdued FX volatility.Foreign exchange tradingservices revenue increased 3%in the six months ended June 30,2024,comparedto the same period of 2023,primarily due to higher transition management and othertrading services revenue.Foreign exchange trading services revenue comprises reve
205、nue generated byFX trading and revenue generated by brokerage and other trading services,whichmade up 63%and 37%,respectively,of foreign exchange trading services revenuein both the second quarters of 2024 and 2023.We primarily earn FX trading revenue by acting as a principal market-makerthrough bot
206、h direct sales and trading”and“indirect FX trading.”Direct sales and trading:Represent FX transactions at negotiated rates withclients and investment managers that contact our trading desk directly.Clients are able to choose their own execution time and method,trading byvoice or electronically on on
207、e of the several available multibank platforms.These principal market-making activities include transactions for fundsserviced by third party custodians or prime brokers,as well as those fundsunder custody with us.Indirect FX trading:Represents FX transactions with clients,for which weare the funds
208、custodian,or their investment managers,routed to our FXdesk through our asset-servicing operation.We execute indirect FX tradesas a principal at rates disclosed to our clients.Indirect FX is designed toaddress FX trades that relate to the purchase,sale or holding of a securitywhere clients chose the
209、ir execution frequency(either hourly or once perday),allowing us to offer straight-through processing and a fully automatedservice.Our FX trading revenue is influenced by multiple factors,including:the volumeand type of client FX transactions and related spreads;currency volatility,reflectingmarket
210、conditions;and our management of exchange rate,interest rate and othermarket risks associated with our FX activities.The relative impact of these factorson our total FX trading revenues often differs from period to period.For example,assuming all other factors remain constant,increases or decreases
211、in volumes orbid-offer spreads acrossproduct mix tend to result in increases or decreases,as the case may be,in client-related FX revenue.Our clients that utilize indirect FX trading can,in addition to executing their FXtransactions through dealers not affiliated with us,transition from indirect FX
212、tradingto either direct sales and trading execution,including our“Street FX”service,or toone of our electronic trading platforms.Street FX,in which we continue to act as aprincipal market-maker,enables our clients to define their FX execution strategy andautomate the FX trade execution process,both
213、for funds under custody with us aswell as those under custody at another bank.We also earn foreign exchange trading services revenue through electronicFX services and other trading,transition management and brokerage revenue.Electronic FX services:Our clients may choose to execute FX transactionsthr
214、ough one of our electronic trading platforms.These transactions generaterevenue through a“click”fee.Other trading,transition management and brokerage revenue:As our clientslook to us to enhance and preserve portfolio values,they may choose toutilize our Transition or Currency Management capabilities
215、 or transact withour Equity Trade execution group.These transactions,which are not limitedto foreign exchange,generate revenue via commissions charged for tradestransacted during the management of these portfolios.Fund Connect is another one of our electronic trading platforms:it is a globaltrading,
216、analytics and cash management tool with access to more than 400 moneymarket funds from leading providers.Securities FinanceSecurities finance revenue,as presented in Table 2:Total Revenue,decreased8%in the three months ended June 30,2024,compared to the same period of2023,due to lower spreads primar
217、ily resulting from muted industry specials activity,partially offset by higher balances.Securities finance revenue decreased 10%in thesix months ended June 30,2024,compared to the same period of 2023,due tolower spreads primarily resulting from muted industry specials activity and loweragency balanc
218、es,partially offset by higher prime services balances.Our securities finance business consists of three components:(1)an agency lending program for State Street Global Advisors managedinvestment funds with a broad range of investment objectives,State Street Corporation|18MANAGEMENTS DISCUSSION AND A
219、NALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONSwhich we refer to as the State Street Global Advisors lending funds;(2)an agency lending program for third-party investment managers and assetowners,which we refer to as the agency lending funds;and(3)security lending transactions which we enter
220、 into as principal,which we referto as our prime services business.Securities finance revenue earned from our agency lending activities,which iscomposed of our split of both the spreads related to cash collateral and the feesrelated to non-cash collateral,is principally a function of the volume of s
221、ecurities onloan,the interest rate spreads and fees earned on the underlying collateral and ourshare of the fee split.As principal,our prime services business borrows securities from the lendingclient or other market participants and then lends such securities to the subsequentborrower,either our cl
222、ient or a broker/dealer.We act as principal when the lendingclient is unable to,or elects not to,transact directly with the market and execute thetransaction and furnish the securities.In our role as principal,we provide support tothe transaction through our credit rating.While we source a significa
223、nt proportion ofthe securities furnished by us in our role as principal from third parties,we have theability to source securities through assets under custody from clients who havedesignated us as an eligible borrower.Market influences may continue to affect client demand for securities finance,and
224、 as a result our revenue from,and the profitability of,our securities lendingactivities in future periods.In addition,the constantly evolving regulatoryenvironment,including revised or proposed capital and liquidity standards,interpretations of those standards,and our own balance sheet managementact
225、ivities,may influence modifications to the way in which we deliver our agencylending or prime services businesses,the volume of our securities lending activityand related revenue and profitability in future periods.Software and Processing FeesSoftware and processing fees revenue,as presented in Tabl
226、e 2:TotalRevenue,decreased 3%in the three months ended June 30,2024 compared to thesame period of 2023,primarily driven by lower on-premises renewals in front officesoftware and data.Software and processing fees revenue increased 9%in the sixmonths ended June 30,2024 compared to the same period of 2
227、023,primarily drivenby higher front office software and datarevenue associated with CRD and higher lending related and other fees.Software and processing fees revenue includes diverse types of fees andrevenue,including fees from software licensing and maintenance and fees from ourstructured products
228、 business.Front office software and data revenue,which primarily includes revenue fromCRD,Alpha Data Platform and Alpha Data Services,decreased 6%in the threemonths ended June 30,2024 compared to the same period of 2023,primarily due tolower on-premises renewals,partially offset by higher software-e
229、nabled revenuereflecting continued SaaS implementations and conversions.Front office softwareand data revenue increased 9%in the six months ended June 30,2024 comparedto the same period of 2023,primarily due to higher software-enabled andprofessional services revenue,partially offset by lower on-pre
230、mises renewals.Revenue related to the front office solutions provided by CRD is primarilydriven by the sale of term software licenses and SaaS,including professionalservices such as consulting and implementation services,software support andmaintenance.Approximately 50%-70%of revenue associated with
231、 a sale ofsoftware to be installed on-premises is recognized at a point in time when thecustomer benefits from obtaining access to and use of the software license,with thepercentage varying based on the length of the contract and other contractual terms.The remainder of revenue for on-premise instal
232、lations is recognized over the lengthof the contract as maintenance and other services are provided.Upon renewal of anon-premises software contract,the same pattern of revenue recognition is followedwith 50%-70%recognized upon renewal and the remaining balance recognized overthe term of the contract
233、.Revenue for a SaaS related arrangement,where thecustomer does not take possession of the software,is recognized over the term ofthe contract as services are provided.Upon renewal of a SaaS arrangement,revenue continues to be recognized as services are provided under the newcontract.As a result of t
234、hese differences in how portions of CRD revenue areaccounted for,CRD revenue may vary more than other business units quarter toquarter.Lending related and other fees increased 5%and 9%in the three and sixmonths ended June 30,2024,respectively,compared to the same periods of 2023,reflecting higher un
235、funded commitments primarily relating to our fund financeproducts.Lending related and other fees primarily consists of fee revenueassociated with our fund finance,leverage loans,municipal finance,insurance andstable value wrap businesses.State Street Corporation|19MANAGEMENTS DISCUSSION AND ANALYSIS
236、 OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONSOther Fee RevenueOther fee revenue includes market-related adjustments and income associatedwith other equity method investments.Other fee revenue decreased$10 million and$5 million in the three and sixmonths ended June 30,2024,respectively,compared to
237、 the same periods of 2023.Additional information about fee revenue is provided under Line of BusinessInformation included in this Managements Discussion and Analysis.Net Interest IncomeSee Table 2:Total Revenue,for the breakout of interest income and interestexpense for the three and six months ende
238、d June 30,2024 compared to the sameperiods of 2023.NII is defined as interest income earned on interest-earning assets less interestexpense incurred on interest-bearing liabilities.Interest-earning assets,whichprincipally consist of investment securities,interest-bearing deposits with banks,loans,re
239、sale agreements and other liquid assets,are financed primarily by clientdeposits,short-term borrowings and long-term debt.NIM represents the relationship between annualized fully taxable-equivalent(FTE)NII and average total interest-earning assets for the period.It is calculated bydividing FTE NII b
240、y average interest-earning assets.Revenue that is exempt fromincome taxes,mainly earned from certain investment securities(state and politicalsubdivisions),is adjusted to an FTE basis using the U.S.federal and state statutoryincome tax rates.NII increased 6%in the three months ended June 30,2024,com
241、pared to thesame period of 2023,primarily due to higher investment securities yields and loangrowth,partially offset by deposit mix shift towards interest-bearing deposits.NIIremained flat in the six months ended June 30,2024,compared to the same periodof 2023.Investment securities net purchase disc
242、ount accretion increased interestincome by$52 million and$86 million in the three and six months ended June 30,2024,respectively,compared to net purchase premium amortization that reducedinterest income by$11 million and$25 million in the same periods of 2023.Thechange in the net purchase premium am
243、ortization(discount accretion)was primarilydriven by an increase in the net unamortized purchase discounts on the non-MBSportfolio as of June 30,2024,as compared to June 30,2023.Interest income related to debt securities is recognized in our consolidatedstatement of income using the effective intere
244、st method,or on a basisapproximating a level rate of return over the contractual or estimated life of thesecurity.The rate of return considers any non-refundable fees or costs,as well aspurchase premiums or discounts,resulting in amortization or accretion,accordingly.The amortization of premiums and
245、 accretion of discounts are adjusted forprepayments when they occur,which primarily impact MBS.The following table presents the investment securities net premiumamortization(discount accretion)for the periods indicated:TABLE 13:INVESTMENT SECURITIES NET PREMIUM AMORTIZATIONThree Months Ended June 30
246、,20242023(Dollars in millions)MBSNon-MBSTotalMBSNon-MBSTotalUnamortized purchase premiumsand(discounts)at period end$384$(602)$(218)$464$(73)$391 Net premium amortization(discount accretion)17(69)(52)21(10)11 Totals exclude premiums or discounts created from the transfer of securities from AFS to HT
247、M.See Table 14:Average Balances and Interest Rates-Fully Taxable-EquivalentBasis,for the breakout of NII for the three and six months ended June 30,2024,compared to the same periods of 2023.(1)(1)State Street Corporation|20MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPER
248、ATIONSTABLE 14:AVERAGE BALANCES AND INTEREST RATES-FULLY TAXABLE-EQUIVALENT BASISThree Months Ended June 30,20242023(Dollars in millions;fully taxable-equivalent basis)AverageBalanceInterestRevenue/ExpenseRateAverageBalanceInterestRevenue/ExpenseRateInterest-bearing deposits with banks$87,894$929 4.
249、25%$69,079$696 4.05%Securities purchased under resale agreements6,558 166 10.17 1,634 81 19.82 Trading account assets779 704 Investment securities:Investment securities available-for-sale53,204 673 5.06 43,409 408 3.76 Investment securities held-to-maturity51,894 277 2.14 64,141 320 1.99 Total Inves
250、tment securities105,098 950 3.62 107,550 728 2.71 Loans38,703 563 5.85 34,235 442 5.18 Other interest-earning assets22,708 391 6.92 18,783 285 6.09 Average total interest-earning assets$261,740$2,999 4.61$231,985$2,232 3.86 Interest-bearing deposits:U.S.$132,162$1,364 4.15$109,015$945 3.48 Non-U.S.6
251、3,767 273 1.72 64,838 248 1.54 Total interest-bearing deposits195,929 1,637 3.36 173,853 1,193 2.75 Securities sold under repurchase agreements3,404 43 5.07 4,266 13 1.25 Other short-term borrowings13,073 167 5.15 1,965 20 4.11 Long-term debt19,694 267 5.44 16,735 209 5.00 Other interest-bearing lia
252、bilities4,753 149 12.57 3,595 106 11.74 Average total interest-bearing liabilities$236,853$2,263 3.84$200,414$1,541 3.09 Interest rate spread.77%.77%Net interest income,fully taxable-equivalent basis$736$691 Net interest margin,fully taxable-equivalent basis1.13%1.19%Tax-equivalent adjustment(1)Net
253、interest income,GAAP basis$735$691 Six Months Ended June 30,20242023(Dollars in millions;fully taxable-equivalent basis)AverageBalanceInterestRevenue/ExpenseRateAverageBalanceInterestRevenue/ExpenseRateInterest-bearing deposits with banks$89,062$1,927 4.36%$73,127$1,338 3.69%Securities purchased und
254、er resale agreements6,338 333 10.58 1,638 157 19.38 Trading account assets773 685 Investment securities:Investment securities available-for-sale49,850 1,246 5.00 42,759 758 3.54 Investment securities held-to-maturity53,358 571 2.14 64,562 640 1.98 Total investment securities103,208 1,817 3.52 107,32
255、1 1,398 2.60 Loans38,225 1,109 5.84 33,878 839 5.00 Other interest-earning assets20,430 703 6.92 18,092 530 5.91 Average total interest-earning assets$258,036$5,889 4.59$234,741$4,262 3.66 Interest-bearing deposits:U.S.$131,004$2,727 4.19%$107,148$1,724 3.24%Non-U.S.62,927 550 1.76 65,593 423 1.30 T
256、otal interest-bearing deposits193,931 3,277 3.41 172,741 2,147 2.51 Securities sold under repurchase agreements3,263 82 5.07 4,337 22 1.04 Federal funds purchased 59 1 4.70 Short-term borrowings10,694 268 5.05 1,564 31 3.97 Long-term debt19,319 525 5.44 16,302 393 4.83 Other interest-bearing liabili
257、ties4,591 284 12.43 3,339 208 12.54 Average total interest-bearing liabilities$231,798$4,436 3.85$198,342$2,802 2.85 Interest rate spread.74%.81%Net interest income,fully taxable-equivalent basis$1,453$1,460 Net interest margin,fully taxable-equivalent basis1.13%1.25%Tax-equivalent adjustment(2)(3)N
258、et interest income,GAAP-basis$1,451$1,457 Rates earned/paid on interest-earning assets and interest-bearing liabilities include the impact of hedge activities associated with our asset and liability management activities where applicable.Reflects the impact of balance sheet netting under enforceable
259、 netting agreements of approximately$180.09 billion and$175.96 billion for the three and six months ended June 30,2024,respectively,compared to$139.55 billion and$128.16 billion for the same periods of 2023,respectively.Excluding the impact of netting,theaverage interest rates would be approximately
260、 0.36%and 0.37%in the three and six months ended June 30,2024,respectively,compared to 0.23%and 0.24%in the same periods of 2023,respectively.Reflects the impact of balance sheet netting under enforceable netting agreements of approximately$7.07 billion and$6.48 billion for the three and six months
261、ended June 30,2024,respectively,compared to$4.93 billion and$4.96 billion in the same periods of 2023,respectively.Excluding the impact of netting,the averageinterest rates would be approximately 5.28%and 5.26%in the three and six months ended June 30,2024,respectively,compared to 4.82%and 4.63%in t
262、he same periods of 2023,respectively.Average rate includes the impact of FX swap costs of approximately($64)million and($112)million for the three and six months ended June 30,2024,respectively,compared to$22 million and$16 million for the same periods of 2023,respectively.Average rates for total in
263、terest-bearing deposits excluding the impact of FXswap costs were 3.49%and 3.51%in the three and six months ended June 30,2024,respectively,compared to 2.70%and 2.49%in the same periods of 2023,respectively.Total deposits averaged$220.88 billion and$219.89 billion for the three and six months ended
264、June 30,2024,respectively,compared to$205.83 billion and$208.06 billion in the same periods of 2023,respectively.Reflects the impact of balance sheet netting under enforceable netting agreements of approximately$5.82 billion and$5.62 billion for the three and six months ended June 30,2024,respective
265、ly,compared to$4.42 billion and$4.91 billion in the same periods of 2023,respectively.Excluding the impact of netting,the averageinterest rates would be approximately 5.28%and 5.59%in the three and six months ended June 30,2024,respectively,compared to 4.82%and 5.08%in the same periods of 2023,respe
266、ctively.(1)(2)(3)(4)(5)(6)(2)(3)(4)(5)(6)(1)(2)(3)(4)(5)(6)State Street Corporation|21MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONSChanges in the components of interest-earning assets and interest-bearingliabilities are discussed in more detail below.Additional
267、information about thecomponents of interest income and interest expense is provided in Note 14 to theconsolidated financial statements in this Form 10-Q.Average total interest-earning assets were$261.74 billion and$258.04 billionin the three and six months ended June 30,2024,respectively,compared to
268、$231.99 billion and$234.74 billion in the same periods of 2023,respectively.Theincrease is primarily due to higher levels of client deposits and an increase in short-term wholesale funding and long-term debt.Interest-bearing deposits with banks averaged$87.89 billion and$89.06 billionin the three an
269、d six months ended June 30,2024,respectively,compared to$69.08billion and$73.13 billion in the same periods of 2023,respectively.These depositsprimarily reflect our maintenance of cash balances at the Federal Reserve,the ECBand other non-U.S.central banks.The higher levels of average cash balancesre
270、flect higher levels of client deposits and funding levels.Securities purchased under resale agreements averaged$6.56 billion and$6.34 billion in the three and six months ended June 30,2024,respectively,compared to$1.63 billion and$1.64 billion in the same periods of 2023,respectively,due to a shift
271、to term repurchase agreements,which reduces our abilityto net against resale agreement balances.Additionally,as a member of FICC,wemay net securities sold under repurchase agreements against those purchasedunder resale agreements with counterparties that are also members of the clearingorganization,
272、when specific netting criteria are met.The impact of balance sheetnetting was$180.09 billion and$175.96 billion on average in the three and sixmonths ended June 30,2024,respectively,compared to$139.55 billion and$128.16 billion in the same periods of 2023,respectively,primarily driven by anincrease
273、in FICC repurchase agreement volumes.We are a direct and sponsoring member of FICC.As a sponsoring memberwithin FICC,we enter into repurchase and resale transactions in eligible securitieswith sponsored clients and with other FICC members and,pursuant to FICCGovernment Securities Division rules,subm
274、it,novate and net the transactions.Wemay sponsor clients to clear their eligible repurchase transactions with FICC,backed by our guarantee to FICC of the prompt and full payment and performanceof our sponsored member clients respective obligations.We generally obtain asecurity interest from our spon
275、sored clients in the high qualitysecurities collateral that they receive,which is designed to mitigate our potentialexposure to FICC.Additionally,as a member of certain industry clearing and settlementexchanges,we may be required to pay a pro rata share of the losses incurred by theorganization and
276、provide liquidity support in the event of the default of anothermember to the extent that the defaulting members clearing fund obligation and theprescribed loss allocation to FICC is depleted.It is difficult to estimate our maximumpossible exposure under the membership agreement,since this would req
277、uire anassessment of future claims that may be made against us that have not yetoccurred.We did not record any liabilities under these arrangements as of bothJune 30,2024 and December 31,2023.Average investment securities decreased to$105.10 billion and$103.21 billionin the three and six months ende
278、d June 30,2024,respectively,from$107.55 billionand$107.32 billion in the same periods of 2023,respectively,primarily due tomaturities within our fixed-rate portfolio,and portfolio repositioning.Average loans increased to$38.70 billion and$38.23 billion in the three andsix months ended June 30,2024,r
279、espectively,from$34.24 billion and$33.88 billionin the same periods of 2023,respectively.Average core loans,which excludeoverdrafts and highlight our efforts to grow our lending portfolio,averaged$35.07 billion and$34.68 billion in the three and six months ended June 30,2024,respectively,compared to
280、$30.28 billion and$29.75 billion in the same periods of2023,respectively.The increase is primarily due to growth in collateralized loanobligations in loan form and fund finance loans.Additional information about theseloans is provided in Note 4 to the consolidated financial statements in this Form 1
281、0-Q.Average other interest-earning assets,largely associated with our primeservices business,increased to$22.71 billion and$20.43 billion in the three and sixmonths ended June 30,2024,respectively,from$18.78 billion and$18.09 billion inthe same periods of 2023,respectively,primarily driven by an inc
282、rease in the levelof cash collateral posted.Other interest-earning assets primarily reflects primeservices assets where cash has been posted to borrow securities from lenders,which are then lent by us,as principal,to borrowers.This cash includes both cashfrom borrowers and cash utilized from our bal
283、ance sheet,and is presented on a netbasis on the balance sheet where we have enforceable netting agreements.Non-interest earning assets also includes a portion of our prime services assets whereborrower-provided non-cash collateral has been utilized to borrow securities fromlenders,State Street Corp
284、oration|22MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONSwhich we subsequently loan,as principal,to borrowers;in this structure ourinvestment portfolio securities are encumbered,but this is not reflected on thebalance sheet.Combined with our prime services liabili
285、ties,revenue from theseactivities generates securities finance fee revenue as well as net interest income.Average total interest-bearing deposits increased to$195.93 billion and$193.93 billion in the three and six months ended June 30,2024,respectively,from$173.85 billion and$172.74 billion in the s
286、ame periods of 2023,respectively.Theincrease is driven by active engagement with our clients on deposit raisinginitiatives,rotation from non-interest bearing deposits and a reduction in the FederalReserves overnight repurchase agreement activity.Future interest-bearing depositlevels will be influenc
287、ed by the underlying asset servicing business,client behavior,the mix of interest-bearing and non-interest bearing deposits and market conditions,including the general levels of U.S.and non-U.S.interest rates.Average other short-term borrowings increased to$13.07 billion and$10.69billion in the thre
288、e and six months ended June 30,2024,respectively,from$1.97billion and$1.56 billion in the same periods of 2023,respectively,due to increasedwholesale funding.The increase is driven by our effort to diversify our fundingsources through relatively low-cost channels,with initial maturities of twelve mo
289、nths,to further support business growth.Average long-term debt was$19.69 billion and$19.32 billion in the three andsix months ended June 30,2024,respectively,compared to$16.74 billion and$16.30 billion in the same periods of 2023,respectively.These amounts reflectissuances,redemptions and maturities
290、 of senior and subordinated debt during therespective periods.Average other interest-bearing liabilities,largely associated with our primeservices business,were$4.75 billion and$4.59 billion in the three and six monthsended June 30,2024,respectively,compared to$3.60 billion and$3.34 billion in thesa
291、me periods of 2023,respectively.Other interest-bearing liabilities is primarilydriven by cash received from our custody clients,which is presented on a net basiswhere we have enforceable netting agreements.Non-interest bearing liabilities alsoinclude a portion of our prime services liabilities where
292、 client provided non-cashcollateral has been received and we have rehypothecation rights.Securitiesreceived as collateral from our custody clients where we have no rehypothecationrights are used as a credit mitigant only and remain off balance sheet.Several factors could affect future levels of NII
293、and NIM,including the volumeand mix of clientdeposits and funding sources;central bank actions;balance sheet managementactivities;changes in the level and slope of U.S.and non-U.S.interest rates;revisedor proposed regulatory capital or liquidity standards,or interpretations of thosestandards;the yie
294、lds earned on securities purchased compared to the yields earnedon securities sold or matured;and changes in the type and amount of credit or otherloans we extend.Based on market conditions and other factors,including regulatory standards,we continue to reinvest the majority of the proceeds from pay
295、-downs and maturitiesof investment securities in highly-rated U.S.and non-U.S.securities,such as federalagency MBS,sovereign debt securities and U.S.Treasury and agency securities.The pace at which we reinvest,and the types of investment securities purchased,will depend on the impact of market condi
296、tions,the implementation of regulatorystandards,including interpretation of those standards and other factors over time.We expect these factors and the levels of global interest rates to impact ourreinvestment program and future levels of NII and NIM.Provision for Credit LossesIn the second quarter
297、of 2024,we recorded a$10 million provision for creditlosses,primarily reflecting an increase in loan loss reserves associated with certaincommercial real estate loans,which was partially offset by an improved economicoutlook.This compared to an$18 million reserve release recorded in the sameperiod o
298、f 2023.Additional information is provided under“Loans”in Financial Condition in thisManagements Discussion and Analysis and in Note 4 to the consolidated financialstatements in this Form 10-Q.State Street Corporation|23MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIO
299、NSExpensesTable 15:Expenses,provides the breakout of expenses for the three and sixmonths ended June 30,2024,compared to the same periods of 2023.Totalexpenses increased 3%and 4%in the three and six months ended June 30,2024,respectively,compared to the same periods of 2023,as continued businessinve
300、stments and revenue-related costs were partially offset by productivity savings.TABLE 15:EXPENSESThree Months Ended June 30,%Change(Dollars in millions)20242023Compensation and employee benefits$1,099$1,123(2)%Information systems and communications454 405 12 Transaction processing services250 235 6
301、Occupancy106 103 3 Amortization of other intangible assets60 60 Other:Professional services111 110 1 Other189 176 7 Total other300 286 5 Total expenses$2,269$2,212 3 Number of employees at quarter-end52,568 42,688 23 Six Months Ended June 30,%Change(Dollars in millions)20242023Compensation and emplo
302、yee benefits$2,351$2,415(3)%Information systems and communications886 819 8 Transaction processing services498 474 5 Occupancy209 197 6 Amortization of other intangible assets120 120 Other:Professional services221 216 2 Other497 340 46 Total other718 556 29 Total expenses$4,782$4,581 4 Compensation
303、and employee benefits expenses decreased 2%and 3%in thethree and six months ended June 30,2024,respectively,compared to the sameperiods of 2023,mainly due to lower contractor spend associated with the jointventure consolidations in India and lower salaries,partially offset by higher incentivecompens
304、ation and employee benefits costs.Total headcount increased 23%as of June 30,2024 compared to June 30,2023,primarily reflecting the consolidation of our two operations joint ventures inIndia,one in the fourth quarter of 2023 and the other in the second quarter of 2024.Headcount cost associated with
305、the consolidation of those joint ventures waspreviously reflected in compensation and employee benefits expenses.Information systems and communications expenses increased 12%and 8%inthe three and six months ended June 30,2024,respectively,compared to the sameperiods of 2023,reflecting higher technol
306、ogy and infrastructure investments and theabsence of episodic vendor credits,partially offset by optimization savings.Transaction processing services expenses increased 6%and 5%in the threeand six months ended June 30,2024,respectively,compared to the same periodsof 2023,primarily due to higher reve
307、nue-related broker fees and market data costs.Occupancy expenses increased 3%and 6%in the three and six months endedJune 30,2024,respectively,compared to the same periods of 2023,primarilyrelated to joint venture consolidations in India,partially offset by footprintoptimization.Amortization of other
308、 intangible assets was flat for both the three and sixmonths ended June 30,2024,compared to the same periods of 2023.Other expenses increased 5%in the three months ended June 30,2024,compared to the same period of 2023,primarily due to higher sales,marketing andother fund expenses.Other expenses inc
309、reased 29%in the six months ended June30,2024,compared to the same period of 2023,primarily due to the increase to the2023 FDIC special assessment in the first quarter of 2024,the timing of our fundingof our charitable foundation,a one-time vendor expense and higher marketingcosts.Repositioning Char
310、gesThe following table presents aggregate activity for repositioning charges for theperiods indicated:TABLE 16:RESTRUCTURING AND REPOSITIONING CHARGES(In millions)EmployeeRelated CostsReal EstateActionsTotalAccrual Balance at December 31,2022$83$5$88 Payments and other adjustments(14)(1)(15)Accrual
311、Balance at March 31,202369 4 73 Payments and other adjustments(16)(1)(17)Accrual Balance at June 30,2023$53$3$56 Accrual Balance at December 31,2023$207$1$208 Payments and other adjustments(19)(19)Accrual Balance at March 31,2024188 1 189 Payments and other adjustments(37)(37)Accrual Balance at June
312、 30,2024$151$1$152 State Street Corporation|24MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONSIncome Tax ExpenseIncome tax expense was$201 million and$336 million in the three and sixmonths ended June 30,2024,respectively,compared to$153 million and$292 million in
313、the same periods of 2023,respectively.Our effective tax rate was22.1%and 22.3%in the three and six months ended June 30,2024,respectively,compared to 16.7%and 18.2%in the same periods of 2023,respectively.Theincrease in the effective tax rate was primarily due to higher discrete tax benefits in2023.
314、LINE OF BUSINESS INFORMATIONOur operations are organized into two lines of business:Investment Servicingand Investment Management,which are defined based on products and servicesprovided.The results of operations for these lines of business are not necessarilycomparable with those of other companies
315、,including companies in the financialservices industry.Our Investment Servicing line of business provides a range of services to ourclients.Through State Street Investment Services,State Street Global Markets andState Street Alpha,we provide investment services for institutional clients,includingmut
316、ual funds,collective investment funds and other investment pools,corporate andpublic retirement plans,insurance companies,investment managers,foundationsand endowments worldwide.Products under the Investment Servicing line of business include:back officeproducts such as custody,accounting,regulatory
317、 reporting,investor services,performance and analytics;middle office products such as investment book ofrecord,transaction management,loans,cash,derivatives and collateral services,record keeping,client reporting and investment analytics;investment manager andalternative investment manager operation
318、s outsourcing;performance,risk andcompliance analytics;financial data management to support institutional investors;foreign exchange,brokerage and other trading services;securities finance,includingprime services products;and deposit and short-term investment facilities.Our Investment Management lin
319、e of business provides a broad range ofinvestment management strategies and products for our clients through State StreetGlobal Advisors.Our investment management strategies and products for equity,fixed income and cash assets,including core and enhanced indexing,multi-assetstrategies,active quantit
320、ative and fundamental active capabilities and alternativeinvestment strategies span the risk/reward spectrum of these investment products.Our AUM is primarily weighted to indexed strategies.In addition,we provide abreadth of services and solutions,including ESG investing,defined benefit anddefinedco
321、ntribution products,and Global Fiduciary Solutions.State Street Global Advisorsis also a provider of ETFs,including the SPDR ETF brand.For additional information about our two lines of business,as well as therevenues,expenses and capital allocation methodologies associated with them,refer to Lines o
322、f Business Information included under Item 1,Business,in our2023 Form 10-K and Note 17 to the consolidated financial statements in this Form10-Q.Investment ServicingTABLE 17:INVESTMENT SERVICING LINE OF BUSINESS RESULTS(Dollars in millions,except where otherwisenoted)Three Months Ended June 30,%Chan
323、ge20242023Servicing fees$1,239$1,259(2)%Foreign exchange trading services304 276 10 Securities finance101 109(7)Software and processing fees214 221(3)Other fee revenue36 55(35)Total fee revenue1,894 1,920(1)Net interest income730 687 6 Total revenue2,624 2,607 1 Provision for credit losses10(18)nmTo
324、tal expenses1,880 1,850 2 Income before income tax expense$734$775(5)Pre-tax margin28.0%29.7%(170)bps(Dollars in millions,except where otherwisenoted)Six Months Ended June 30,%Change20242023Servicing fees$2,467$2,476%Foreign exchange trading services612 597 3 Securities finance191 212(10)Software an
325、d processing fees421 386 9 Other fee revenue79 83(5)Total fee revenue3,770 3,754 Net interest income1,441 1,449(1)Total revenue5,211 5,203 Provision for credit losses37 26 42 Total expenses3,843 3,828 Income before income tax expense$1,331$1,349(1)Pre-tax margin25.5%25.9%(40)bps Denotes not meaningf
326、ulServicing FeesServicing fees,as presented in Table 17:Investment Servicing Line ofBusiness Results,decreased 2%in the three months ended June 30,2024,compared to the same period of 2023,as higher average equity market levels andnet new business,excluding a previously disclosed client transition,we
327、re more thanoffset by pricing headwinds,a previously disclosed client transition and lower clientactivity and adjustments,including asset mix shift.Servicing fees were flat in the sixnmState Street Corporation|25MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONSmonth
328、s ended June 30,2024,compared to the same period of 2023.For additional information about servicing fees and the impact of worldwideequity and fixed-income valuations on our fee revenue,as well as other key driversof our servicing fee revenue,refer to Fee Revenue in Consolidated Results ofOperations
329、 included in this Managements Discussion and Analysis.ExpensesTotal expenses for Investment Servicing increased 2%and were flat in thethree and six months ended June 30,2024,respectively,compared to the sameperiods of 2023,as continued business investments and revenue-related costs werepartially off
330、set by productivity savings.Seasonal deferred incentive compensationexpense and payroll taxes were$115 million in the six months ended June 30,2024,compared to$132 million in the same period of 2023.Additional informationabout expenses is provided under Expenses in Consolidated Results ofOperations
331、included in this Managements Discussion and Analysis.Investment ManagementTABLE 18:INVESTMENT MANAGEMENT LINE OF BUSINESS RESULTS(Dollars in millions,except where otherwisenoted)Three Months Ended June 30,%Change20242023Management fees$511$461 11%Foreign exchange trading services32 27 19 Securities
332、finance7 8(13)Other fee revenue12 3 nmTotal fee revenue562 499 13 Net interest income5 4 25 Total revenue567 503 13 Total expenses388 361 7 Income before income tax expense$179$142 26 Pre-tax margin31.6%28.2%340 bps(Dollars in millions,except where otherwisenoted)Six Months Ended June 30,%Change2024
333、2023Management fees$1,021$918 11%Foreign exchange trading services55 48 15 Securities finance13 14(7)Other fee revenue19 20(5)Total fee revenue1,108 1,000 11 Net interest income10 8 25 Total revenue1,118 1,008 11 Total expenses808 747 8 Income before income tax expense$310$261 19 Pre-tax margin27.7%25.9%180 bpsIncludes revenues from SPDR Gold Shares and SPDR Gold MiniSharesSM Trust AUM where we ar