State Street Corp at RBC Capital Markets Global Financial Institutions Conference Transcript

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

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Great. Well done. Thank you very much. Maybe Yie-Hsin, to start with you, a broad question. When you think about the actions that you've taken since you've joined State Street in 2022, your presentation hinted at the One State Street approach. Can you talk a little more about what you're doing at SSGA to deliver the synergies or interconnectedness with other State Street areas? Yie-Hsin Hung - State Street Corp - President, Chief Executive Officer - State Street Global Advisors Sure. That's a great question. So I talked about in my presentation the benefits of SSGA being inside of State Street. What I didn't really talk about was the client opportunity. And so many of the clients that we consider ours, in the asset owner arena, whether that's sovereign wealth funds or pension plans or insurance companies, this is the very same segment that Investment Services and the Global Markets Division caters to. And I would say, historically, we, each, focus on what we delivered to those clients and what has really changed and it reflects some of the changes in new leaders and different positions is that we're starting to really think about this value proposition. And from the perspective of our clients, we have a wide range of things that we offer. And so thinking about that in a bundled way, understanding what's really important to them, how can we shape that complete offering. And we're early days, but I would say we're all incredibly excited and enthused about what the opportunity is as we move forward with that.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Yeah, absolutely. Maybe another follow-up question to your comments. You talked about the partnerships. And Ron has talked about these as well. And so when you look at it within the wealth space, what are some of the opportunities, again, for SSGA and State Street in the wealth-specific space? Yie-Hsin Hung - State Street Corp - President, Chief Executive Officer - State Street Global Advisors I think it makes a lot of sense for State Street really to increasingly focus their wealth services effort in that segment because as we all know, it's growing rapidly. In the US alone, I think it's about $35 trillion. So it's the largest customer segment in the world. And there is so much that we do in the institutional side of the business, whether it's servicing, reporting, custody, you name it, the whole chain. I think so much of that can be leveraged. And within CRD today, they have a very decent sized book that's focused on delivering CRD for wealth. And then you heard me talk about where a good 30% of our assets, we manage for wealth advisors, RIAs, broker-dealers around the world. And so we have tremendous relationships with all of those and potential clients. And so it's an effort that is really exciting for everybody across State Street because there's a role for all of us to play and bringing all the pieces that we have just together to focus on this segment.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Yeah. And following up on this operating environment, the larger banks that have investment banking and markets trading activity would tell you, volatility is good for markets for the trading, not so good for investment banking, and it's been slow. In your world of custody and asset management, does volatility help or hurt when you guys think back of the years of running State Street?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Yeah. Okay. Good. With that as a backdrop on the operating environment, Mark, any updates to the 2025 guidance and thoughts about the first quarter?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Coming back to the net interest income, can you remind us of two things? One, which yield curve or what's more important, the US. Federal Reserve monetary policy versus the Bank of England or Europe when it comes to your business? And then second, if you had your druthers, what's the ideal interest rate environment to drive that net interest income higher?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Right. Great. Yie-Hsin, coming back to SSGA. You mentioned about the organic growth that you folks have seen for the last couple of years, about a little over 3%, well above the 2% guidance that we heard back in 2024. What gives you confidence that you're going to be able to sustain that growth in AUM going forward? Yie-Hsin Hung - State Street Corp - President, Chief Executive Officer - State Street Global Advisors Yeah. I think it's really -- it comes down to some of the things that I talked about, having brought our client coverage teams together, the number of new products that we launched, which was low in excess of 90 last year. And the growth in the segments that I really spoke to, we see ETFs and REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2025 / 8:20PM, STT.N - State Street Corp at RBC Capital Markets Global Financial Institutions Conference these digital platforms continuing to grow, this ETFs as a service. Now all of this is, of course, as Mark just talked about, if the markets remain reasonably constructive. That said, I think one of the most important things we can do in our business is really continue to diversify, right, because different asset classes will perform differently in different environments and being mindful of that. And so some of our growth areas actually are diversifiers also for us, whether it's fixed income or non-US markets, those really make a difference, wealth versus institutional. And what we're seeing so far this year is, obviously, I think there's a sense of uncertainty clearly in the market. And a lot of movement, gold has performed particularly well. So we're seeing flows go into that asset class into the short end of the treasury market into our money market areas. And fixed income still seems to have some interest. And I think the view is, for us, as long as we've got the full suite of capabilities in regards to the economic environment, there's reason to be engaging with SSGA.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Yeah. And is there any geographies that you target with newer products versus established markets like the United States? Yie-Hsin Hung - State Street Corp - President, Chief Executive Officer - State Street Global Advisors We are looking across the board. I mean there are clearly some strategies that have demand around the world, and so we'll have to think about what are the right wrappers for the US market versus the non-US market. But we're also complementing that with what do we see investors interested in and there are different regions that we do business. And so that also drives the agenda.