State Street Corp at Goldman Sachs U.S. Financial Services Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : So John, I wanted to start with a question maybe on 2026 priorities. Obviously financial markets, saw a lot of volatility over the course of the year. State Street is still on track to deliver very healthy financial performance this year across the fee revenue stream, but also pretty stable NII and to my point earlier, positive operating leverage, healthy return of capital. Looking out into '26, what are the top strategic priorities in key areas of growth for you and the team?

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Yeah, those are all the good ones. So look, maybe starting with the last one you mentioned around just partnering with Ron and other people within the team to really drive growth. So why don't we start there. So let's talk about the servicing fees. It's your largest business, investment servicing, so a really nice ramp in 2025 and growth. Some of it is obviously the market that's been quite helpful for the last call it 12 to 18 months, but importantly, the sales momentum within kind of organization of that $350 million to $400 million in new fees remains on track. So talk to us a little bit about key areas of strength within that and how are you thinking about sustainability of this type of organic growth into next year.

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Yeah, that's interesting. So when you look out into 2026, kind of this range still sounds reasonable, but it would make shift towards the areas you just kind of highlighted.

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Got it. All right. Well, let's talk about private markets. Obviously it's a long-term growth area within financial services. It's been one for quite some time. More recently with significant growth in semi-liquid products in particular for the wealth channel. How do you think about the competitive dynamics for service providers like State Street evolving within that ecosystem? And can you maybe just remind us your footprint here, what that looks like, and some of the key competitive differentiation factors within the semi liquid and just private market space broadly? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 2:20PM, STT.N - State Street Corp at Goldman Sachs U.S. Financial Services Conference

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Great, great. Double-digit growth in that part of the market in terms of fees, right? Okay, makes sense. I wanted to spend a couple of minutes on wealth servicing. It's something that I think the market doesn't really spend a whole lot of time on when they think about State Street, but you did make a couple of interesting announcements here over the course of the year. Back in July, you announced strategic partnership with UC, and I guess more recently there was announcement of strategic investment and partnership with Apex Fintech Solutions as well. So can you just expand a little bit on the opportunity you see for State Street within the wealth market and how do you differentiate your offering there against some of the players as well?

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Is there a way to frame how big that business is for you guys today? Just to kind of help contextualize, hey, if it grows a lot, how much of a needle mover that is for the service and fee business as a whole? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 2:20PM, STT.N - State Street Corp at Goldman Sachs U.S. Financial Services Conference

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Yeah. Got it. Okay. Let's talk about digital. It's been a big area of focus for over the last really two days of this conference. I think there's not been many fireside chats like this that didn't touch on digital assets or crypto tokenization in one form or another. So let's talk about your views on that ecosystem, the role you see State Street's playing there. I know you guys are aiming to launch a digital asset platform I guess in the coming months, so maybe just discuss what you're offering there will look like and again relative to competitors (inaudible) has been out there for a little while already. How do you expect that to be differentiated?

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Away from just the tokenized money market fund that you mentioned, one of the things we're starting to hear is opportunity for even some of the traditional managers to tokenize some of the traditional assets, right? So whether it's tokenizing equities, tokenizing ETFs, maybe tokenizing some of the private markets, right, where there's clearly a lot more need for efficiencies. How could that impact your guys' revenue model and just what kind of the capabilities you guys either need to build or you already have that could support that?

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Got it. So it's leverageable across (multiple speakers)--

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Got it. Okay. All right, let's turn, our focus to investment management for a couple minutes. Obviously another really important area of growth for you guys. You really sort of try to speed up evolution on the product development side there over the last couple years and you could see that in fixed income, you could see it in the wealth channel as well as several partnerships you announced with the alternative asset managers recently. So looking at maybe one to two years, what do you see as the largest growth contributors to that business, and what type of organic B2 growth are you ultimately aiming to achieve in the investment management side of the house?

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Just double clicking into that, I do want to spend another minute on the alt, but really overlaying your footprint in the defined contribution market, the targeted channel in particular is part of that. You guys have obviously one of the largest passive and index franchises out there. You have the access and the product with the targeted lineup, and obviously a lot of private market participants really want access to that given the way the world is likely to evolve. I know you have a partnership with Apollo, but how do you think about monetizing your footprint and capabilities on the liquid side of things with the alts more broadly? Are there more partnerships you were able to participate in, other things that you might consider buying to sort of further enhance those capabilities?

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Got it. Okay. All right. All super interesting. Look, we're halfway through, so maybe we'll turn our attention to some of the financial items as well. We're kind of getting closer to quarter end here, so hoping you can give us an update on what Q4 shipping ought to be. Obviously, it's been a bit of a bumpy road with market volatility. Things were a little worse coming out. Now it feels a little bit better. So your latest expectations around fees, NII expenses, and anything else you're willing to share with us as far as Q4?

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Great. Okay. Super helpful. Maybe we can just go back and double click into a couple of items. The $275 million of notables for the fourth quarter, just talk to us a little bit of what that's related to and if that's kind of further head count repositioning, et cetera. And is that sort of what's driving a slightly better outlook for expense growth in '26 versus '25.

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Got it. Okay. If I were to go back to some of the original points you made as kind of like key objectives for you and your CFO role but really broadly as an organization, you talked about both kind of the balance sheet construct and NII, and while acknowledging that you guys are probably not ready to share full out 2026 guidance and NII just yet. I do hope we can maybe talk about just some of the building blocks and kind of how you thinking and framing a slightly different approach to balance sheet and NII or maybe some of the area of incremental efficiencies that you can get out of the balance sheet. So first I guess when you talk about optimizing the balance sheet, in terms of the asset mix, so what you guys are doing for your clients, can you expand on that a little bit? What does that mean?

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Got it. Okay. No, super helpful. These are all really good building blocks to think about. Okay, we didn't really talk a whole lot about capital returns, so maybe we can hit on them as well both for the fourth quarter and just broadly kind of how you thinking about that into next year.

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Got you. Maybe we can zone in on that third one, some of the bolt-on investments and State Street has been kind of out of the M&A market for a little bit of time, and this is not large M&A by no stretch, but as you think about opportunities for either larger transactions, something that could really enhance your footprint or at scale in areas of interest or more of these kind of smaller bolt-on things to just kind of accelerate growth, how much more active are you likely to be there over the next couple of years relative to what we've seen in the past?

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Yeah, got you. Well, look, to wrap things up, I want to ask you a question back to your biggest business, which is the investment servicing business. You and I talked about this offline as well, but the market obviously has had a view that State Street is facing a more challenging end market. A lot of it is traditional asset managers and they have been shrinking over time. That has translated into more muted service and fee growth for you guys over the years. We're starting to see that really ramped nicely, so super encouraging, but as you think about the multi-year fee growth algorithm for the servicing side of the business and your early thoughts of kind of what would that look like across different buckets.

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Great. Well, we'll look forward to that. Thank you so much for the time. Pleasure to see you. Welcome and look forward to more of these.