State Street Corporation Announces Preliminary Stress Capital Buffer Requirement, Planned Continuation of its Quarterly Common Stock Dividend of $0.52 per share and Release of its 2020 Dodd-Frank Annual Stress Test
State Street Corporation (NYSE: STT) today announced its preliminary inaugural stress capital buffer (SCB) requirement of 2.5% beginning in the fourth quarter of 2020 and the intention to continue its quarterly common stock dividend of $0.52 per share in the third quarter subject to consideration and approval by its Board of Directors.
State Street's calculated SCB under this year's supervisory stress test was well below the 2.5% minimum, preliminarily resulting in an SCB at that floor. The firm's capital position remains strong amid the considerable economic uncertainty created by the COVID-19 pandemic. Accordingly, the Company will consider a full range of capital actions, including the potential resumption of share repurchases, in upcoming quarters but will do so commensurate with economic conditions at the time, the importance of safety and soundness, the review of the supplemental CCAR scenarios to be established by the Federal Reserve, and subject to any interim regulatory limitations. The Company is suspending share repurchases for the third quarter of 2020, consistent with the Federal Reserve's instructions to all large banks.
"We are pleased with our 2020 CCAR results and the inaugural determination of our stress capital buffer at the minimum 2.5% level. The COVID-19 pandemic has provided an unprecedented, real-time, stress test and our strong capital position has enabled us to operate effectively, help stabilize the financial markets and support our employees, clients and communities. While the environment remains uncertain, State Street's performance under the Federal Reserve's severely adverse scenario is another reminder of our business model's resiliency and capital stability," said Chairman and Chief Executive Officer Ron O'Hanley.
State Street's Board of Directors will consider the common stock dividend at a regularly scheduled board meeting in the third quarter of 2020. State Street's third quarter 2020 common stock and other stock dividends, including the declaration, timing and amount, remain subject to consideration and approval by State Street's Board of Directors at the relevant times.
The Company also announced today the results of its 2020 annual stress test, with its disclosure available on the Investor Relations section of its website at: http://investors.statestreet.com.
Consistent with section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the results of State Street's 2020 annual stress test released today are based on the supervisory severely adverse scenario and incorporate prescribed Dodd-Frank capital actions. State Street, like other institutions covered by the provisions of section 165 of the Dodd-Frank Act, is required to conduct company-run stress tests annually under its own methodology and to disclose summary results of those company-run stress tests under the severely adverse scenario.
This release follows the earlier announcement of the Federal Reserve's supervisory stress test results for covered institutions, including State Street, based on its own methodology. Those results can be found at: https://www.federalreserve.gov.
About State Street
State Street Corporation (NYSE: STT) is one of the world's leading providers of financial services to institutional investors including investment servicing, investment management and investment research and trading. With $31.86 trillion in assets under custody and/or administration and $2.69 trillion* in assets under management as of March 31, 2020, State Street operates globally in more than 100 geographic markets and employs approximately 39,000 worldwide. For more information, visit State Street's website at www.statestreet.com.
*Assets under management as of March 31, 2020 includes approximately $50 billion of assets with respect to which State Street Global Advisors Funds Distributors, LLC (SSGA FD) serves as marketing agent; SSGA FD and State Street Global Advisors are affiliated.
This News Release (and the conference call referenced herein) contains forward-looking statements within the meaning of United States securities laws, including statements about our goals and expectations regarding our plans for capital actions, including common stock dividends and share repurchases, business, financial and capital condition, results of operations, strategies, the financial and market outlook, governmental and regulatory initiatives and developments, and the business environment. Forward-looking statements are often, but not always, identified by such forward-looking terminology as "will," "outlook," "guidance," "expect," "priority," "objective," "intend," "plan," "forecast," "believe," "anticipate," "estimate," "seek," "may," "trend," "target," "strategy" and "goal," or similar statements or variations of such terms. These statements are not guarantees of future performance, are inherently uncertain, are based on current assumptions that are difficult to predict and involve a number of risks and uncertainties. Therefore, actual outcomes and results may differ materially from what is expressed in those statements, and those statements should not be relied upon as representing our expectations or beliefs as of any time subsequent to the time this News Release is first issued.
Important factors that may affect future results and outcomes include, but are not limited to: