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State Street (STT)

Participants
Ilene Fiszel Bieler IR
Ron O’Hanley CEO
Eric Aboaf CFO
Alex Blostein Goldman Sachs
Glenn Schorr Evercore ISI
Brian Bedell Deutsche Bank
Betsy Graseck Deutsche Bank
Ken Usdin Jefferies
Brennan Hawken UBS
Gerard Cassidy RBC
Mike Mayo Wells Fargo Securities
Rob Wildhack Autonomous Research
Vivek Juneja JPMorgan
Rajiv Bhatia Morningstar
Brian Kleinhanzl KBW
Call transcript
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Operator

Good morning, and welcome to State Street Corporation’s First Quarter 2021 Earnings Conference Call and Webcast. Today’s discussion is being broadcasted live on State Street’s Web site at investors.statestreet.com. This conference call is also being recorded for replay. State Street’s conference call is copyrighted and all rights are reserved. This call may not be recorded for rebroadcast or distribution in whole or in any part without the expressed written authorization from State Street Corporation. of Web will site. broadcast the housed authorized Street State only this be call on The

Street. Now, Fiszel of State Bieler, would Global I like Head Investor to Relations introduce Ilene at

Ilene Fiszel Bieler

you Relations which Thank our XXXX all Investor call you. in first of our O’Hanley, Aboaf, quarter Then Ron is earnings Web download site, speak CEO, everyone the take our Good and CFO, today, for us. will available On our morning, for joining section Afterwards, happy our first. Eric presentation, will we will slide to thank you through questions. take investors.statestreet.com. be

the yourself During to re-queue. and then limit please two Q&A, questions

excludes started, will directly or available to more or that I get of in to like items today’s from we GAAP. appendix presentation. include remind non-GAAP most on presentation presented measures the Reconciliations measures to you regulatory are the that slide adjusts Before results these comparable one would basis or GAAP our a

today’s XX-K. presentation due to In SEC the statements in Actual as factors, in of important today our differ variety those Form and risk those will such may including discussion statements. addition, our our referenced from a in materially contain filings, forward-looking factors factors results

Our any views them and even speak change. as if we forward-looking statements obligation of today our only disclaim to update

let Now, me turn it Ron. over to

Ron O’Hanley

morning, our first released we quarter and this Ilene, Earlier you, results. everyone. Thank morning good financial

could progress reflect innovating towards experienced to the our XXXX. compared our I to of have declining and and an rebounding, the be crisis across Before evidence highlight equity of to year levels while I making last enhancing operating briefly we’re from that hardly unemployment on sharply recovered time strongly essential first XXXX is more in then operating data first are three partner being improving quarter results, like the months Economic would our today all is model different. the clients. this the review environment of and Relative in as activity our we for XXXX, the and some the franchise markets

Although, levels, low historically short end are rebounding. yields end rates US remain bond at long

death of at rates tunnel. parts there growth. pandemic capital many in and The world, end world’s next light the to is the of owners and remain of also stubbornly infection this stage clearly of are future the the COVID-XX While high looking into the managers

As to continue delivering the recover on investment financial grow, economy markets across and continue clients we remain our inflows and to segments regions. focused and for

first successfully environment. by demonstrated Street operating As our navigate to quarter results, financial the improving continued State

I as remain during for term which rates, industry. short headwind further interest Although, noted, compressed the a quarter, our first critical

and resolutely State development cannot we number implementing look on forward control of a interest ongoing strategy business provider, are reasons. and being underpinned more to solutions confidence platform. Street rates, by with pivoting of we the of While front Alpha an focused our outsourced enterprise for we our our back to delivery And

need know in on for we built deliver the can and they market and us bad. reputation First, upon services to reliability good they crisis our the and clients our depend solutions during times in further

invest been has crisis, resiliency, operational by our apparent and to and distinguishing noted operating we clients. in client to service global throughout the Second, our continue which further and model, strengthening

to opportunity clients. continue up institutional operations announcements. some investment servicing work their enjoy value for better routines. allowing are remote and operating and largely recent of by resonate year disrupted as have clients and perform more extraordinary to at them data as Alpha take both am many activities, and a our for a despite grateful to I and take service. levels our their propositions focus employees dedication we their high very Last, And demonstrated the non-Alpha continue creating Third, on reassessing result, their on own to models. Fourth, of outcomes

announced services that office how addition our front their are as outsource the operating For front as example, back offer quarter result office Alpha with These rapidly well increase to and provide we partnerships, win to of which the Street office office number uniquely element open an operating as After administer have nature exemplifying existing front to quarter this we of the to mandates. Street interoperable separately us existing clients will positioned appealing we value regarding additional middle of to services highlight Invesco, to services platform, appointed services. on announced choice accounting Alpha State our M&G middle Aladdin, relationship in been and to we new nature benefit to during architecture business to end, fund middle mandates strengthening we has Through company a revenue first a we our new functionality full of State our Alpha clients middle back win platform. able and the deals is systems. reported morning, of back through of adding of end clients. the interoperability the three unlocking our and office sources proposition, front how

While of platform our our to the across Alpha franchise. remains also continue innovate strategy, an we part integral

bond for space. largest ESG late AUM in by ESG in XXXX US corporate regulatory it example, of enhancements can to Global For the reporting provide ESG that ETF for quarter end with of ESG the scale. billion first that clients to provide $X.X of the ability the quarter, new funds at to EMEA use ESG new introduced a requirements now Advisors’ end, our a we in solutions that demand the and first data, platform. global launched solutions capabilities grew the necessary risk and during corporate address exists growing the will To single analytics making

transfer shares regulatory on the to operations, ETF to digital counting provide as the announced work basket develop jurisdictions. services, ETF our ETF. [Technical of we to our and We deploy approval, also Subject prepare order will recently VanEck servicing to Trust multiple and our to strategy in VanEck as continue taking asset Difficulty]. Bitcoin with including serve custody agency the intention We we capabilities

Next, the detail. quarter quarter through highlights before will I more take our will review you over the call in to who first handing Eric

Turning to Slide X.

First was excluding notable first rate NII year to X%, ago our by quarter the $X.XX of $X.XX headwinds EPS driven quarter on the declined interest results. items. revenue total impact period, or Relative

total year. improved fee first by from the trading X%, driven fee compared Collectively, than increased exceptionally However, respectively, revenue X% year-over-year more fee as the servicing and these management well increased headwind year-over-year FX an to quarter last trading offset and performance. processing X% and of which as strong growth, as software

were down and have the revenue client in as [Technical recent our made platforms cost of volumes year-over-year, investment relative one essentially higher revenues quarter the as and excluding fee result Difficulty]. revenue, While are remains in notable pandemic location reduced productivity currency levels are trading to we off. paying successfully translation total total and period first our year year-over-year, first items headcount FX rising have expenses with high Furthermore, well a talent improvements flat quarter Even ago. above we

also were remain $XX.X AUM period by and environment Difficulty] distinguish and while Alpha levels As we strong our of activity. very first across servicing medium to with CRD, focused end results. performance fluid operating a confident solid to XXXX. end. the continue and [offline] to Global expenses is also in cash ETFs remain installed core flow markets. targets a are increased $XXX $X.X a million developing and in Overall, We performance term To we our start our and areas and Meanwhile, had we while demonstrated strategy. our on amounted year revenue recurring in Advisors’ pleased to also solid to with [Technical quarter and XX% remaining remain billion, franchise. trillion client we assets January. at performing be to discussed increased business. we periods AUM enabling from benefited many strong to the a in in and moving billion At the of remain increased further clear future the how the in our trillion, conclude, to ability quarter supported end quarter, $XXX pleased increase our operating control $XXX innovate growing to successfully annual ourselves continued At Alpha navigate recent AUC/A wins by record grow a over first a to of to we have both higher confident asset path result, servicing business and the AUC/A new the as that remainder a

the of common of a During million capital repurchases dividends. quarter, we and $XXX to first through returned common shareholders our share combination

the to our by it me set limit take with you of repurchases XXXX, over authorized detail. common quarter quarter FED. with consistent For more Board has XXX turn million to let through that, stock And up the in of Eric the to the second

Eric Aboaf

or amounted EPS $X.XX my side begin review impact X. Thank morning, quarter excluding $X.XX the and you, on reported detailed our the on I’ll panel to the $X.XX results of We as slide good notable from slide. everyone. right Ron items, quarter in which the of first first the in of

another On well values the total fee market were had volumes. controlled quarter slide, can yet while that higher solid left see growth we the expenses of to and revenue you despite client

in first ago of translation despite was show to exceptional headwind excluding services period, FX result the of year-on-year or the year-over-year the we currency had of translation currency pandemic. revenue X% to excluding trading the due year our the first the a the right. dollar also last quarter to X% up quarter almost As results in of up Total relative the impact we the from significantly impact fee the year depreciating column results

the was For and can trading currency mid impact context, at in roughly currency finance. translation fees excluding fees, year-on-year bottom total the FX services single and excluding notable the X% or fee which excluding from of servicing revenue Expenses you were items flat year-on-year growth digit up management see translation, with slide. the of securities X% headwinds strong

So operating the drive solid we’re this we a growth. improving progress making, quarter, as demonstrating towards model in total was our

AUC/A levels, strong offset markets. AUC/A more was better result business year-on-year flows of client market market and you’ll of by the X, client equity levels, lower end quarter-on-quarter bond growth period across growth. flows business, to Slide to higher The end increased new trillion. $XX than business Period record and impact higher volume year-on-year which see Quarter-on-quarter, net XX% the X% net a period change driven and end franchise. new increase Turning the

also and sidelines both product retail year-on-year most the period to ETF moved cash were custody. we’re AUM increased both and trillion, institutional that inflows. a $X.X seeing have coupled levels that seeing We’re and record. off we quarter types sequential year-on-year across higher net Advisors, At X% Global globally now The primarily with and inflows by market driven increases investors quarter-on-quarter XX% end and

sectors both had net $XX low record with experience to billion franchise industry particularly strong and US ETF the costs and Spider ETF the again industries over flows. well. as doing amounted a first Our in flow performance inflows quarter

to X. Turning Slide

fees servicing and of and average which First pricing currency market year-on-year. points fees reflects The X stronger market also a X% percentage including approximately increased normal activity. X% as headwind. levels Servicing quarter client were year-on-year, translation, result was higher average worth up quarter-on-quarter higher the levels increase

wins managers, order annual pleased we is in And up report from segments growth underlying that typical $X.X gross based segments official with started as an good need to a overall solid saw as deal headwinds pricing also me quarter normal first in a outline $XXX totaled client sizes XXXX wins work our servicing last we how across we business. I’m institutions. growth, quarter, recent in AUC/A to broad quarters. growth and This regions. volumes on that context, clients, of quarter our net generating has with asset alternatives means which attrition quarter offsetting sales continue which heard good attractive for mix of rate first our I’m billion fee client and pleased you approximately and span to and the billion, drive

in X also installed announced subsidiary be have earlier the have quarter but bank we of may you that to Intesa we administrative of in depository example, an activities Europe. yet assumed As that exclude numbers that Positively, mandates, ago, billion at wins end as and AUC/A a a amounted quarter fund Sanpaolo moment recently two the of first were the to be and deals $XXX are end. announced reported to after which the just Ron signed mentioned installed quarter. both seen these

X, Slide discuss me other detail. [important] to revenue lines more several Turning let in fee

equity performance from cash our client market partially by within idiosyncratic an flow as money market higher businesses, quarter-on-quarter. up levels impact has including and were average quarter-on-quarter fees were million, and offset higher from from products management management year-on-year, asset quarter strong waivers. flat currency as and fee year-on-year fee well reallocation X% but First X% translation Both our performance fee benefited $XXX ETF

higher trading $XX was first leaving balances strong Regarding currency $XX money given per Relative to in to services market million million impact XXXX, fee, rest If should another developed March. expect the significant increase pairs. FX downward $XX for they distribution beginning in and short end be per around of quarter persist, worth $XX and quarter. be $XX impact quarter-on-quarter they both the roughly fee closer we market to with volumes that but across in we waivers, the the trading million we of fell million revenue this though rates move of quarter about $XX net quarter. wide the million year-on-year will yet exceptional XQ per to higher had FX had could quarter it X% XX% emerging up company year million and expect quarter,

to higher many quarter, which relative our to benefit of business across investment of and we as years fourth declined now last alone. added FX the of volumes and year XX markets, we the volatility to market expanded client FX we from two venues six in see three continue continued While which

finance agency a X% assets increasing enhanced of mainly income new lending alternative and growth, custody year-on-year on securities our quarter-on-quarter, in driven of increase fixed result from within program. as business by good [higher] loan balances recorded second mandates Our and consecutive clients revenue its quarter XX%

and our adjustments. and quarter-on-quarter, Finally, software due mark-to-market fees down quarter in up first changes XX% to year-on-year largely XX% processing were

and Moving standalone we growth to metrics. Slide CRD performance have X, here revenue business

the software for and to through premise was lumpy see to the help CRD revenues separated CRD rules premise revenue in inherent quarter. on increased primarily have of to categories a as XX% again the revenue higher accounting pattern quarter-on-quarter, in into lower revenue. enabled seasonally three higher year-on-year, on revenues X% Total revenues recognition largely revenue We result fourth due

Slide, professional on shown increased ago more the revenues the strong a services and to XX% year SaaS growth the period. relative As combined durable by rate

technology clients slide, the some The of as Alpha quarter of realize first of announcement. an operations our with Alpha the Alpha We right bottom infrastructure. the year include quarter promising platform quarter for base, this this first Alpha. morning’s quarter first value the continues during State and disruption economic helped continues resonate reported the On of doesn’t the clients last has end the pipeline the highlights we client the to proposition three show and Street in potential remain their and transformational as to additional

Turning Slide X. to

amortization. sequential of end the a to lumpier our rest monetary remain deposits were by billion sponsored low First can including and X% first an the $XX on quarter portfolio XXXX. sequential of Quarter-on-quarter, Federal OCI end increase as X% of first slide. premium of the repo benefits declined impacts NII day rates $XX the NII was a long just mindful environment due the member the rates right the interest as percentage to due quarter-on-quarter, quarter Reserve’s quarter our sequential on XX% as investment was by offset related the expected. half capital. XX% in year-on-year, improvement was Around to average quarter see We portfolio expansionary to million lower the the result count. of deposit decline of despite balances risk reflecting you a in of quarter’s investment our These Approximately point increased rate Total our of X the impact decline mainly of policy. impact absence of due the effects downdraft or activity, declined the market of in and on higher the in items, partially on short

we coming the dramatically over and gently portfolio the trimmed off US as bit higher during rates. reinvest a Treasury at the selectively the investment months may first quarter, So sold

the Turning expense clearly to Slide this a XX, trends base the we’ve quarter again ex that provided of view so evident. are notables, underlying

flat primarily variable line Excluding X% were technology benefits in held underlying notable cost $XX and of systems of the both reduction software approximately a Information first X% increased estate. the FX communication expenses to excluding we up higher expenses currency offset impacted with offset growth seasonal driven fourth several expense of weaker in the just the effectively year-on-year and up by due X% as million initiatives quarter, item in which Transaction expenses X% On to basis, and employee continued Occupancy investment items, locations. quarter excluding we was higher in expenses as our performance processing all ex currency in first impact and were means expenses deferred costs. as higher other costs Relative up revenue expenses costs. the subcustody headcount translation seasonal market compensation only the is were translation our expenses impact higher which dollar, and savings absorbed were by partially quarter compensation. were volume by based I’m Overall, significant data underlying points. related pleased down year-on-year.

We operating automation, productivity continue drive as scale. through reengineering we model and to demonstrate improvements increased

evolution Slide of leverage Tier our Moving show ratios. to we the CETX and XX, X

see, As environment operating capital we navigate the you levels. can with improving continue strong to

CETX by quarter in recently by yields in Intesa end, fourth percentage a treasury fell our completed as as capital was Sanpaolo. announced run Relative deal was AOCI end slightly long XX.X%. we to standardized base of quarter, ratio lower result an As as the of well significant the US points lift intangibles up increase year-on-year quarter-on-quarter with to our but to impacted X.X the up up related

RWA, related transient in RWA and has saw and declined $X in $X by FX to was trading also nature already billion. episodic We This primarily headwind increase billion activity. overdraft

else deposit as was and and to all driven point well as year-over-year X XX%, in quarterly by preferred end AOCI average in for increase announced average quarter-on-quarter percentage call higher the of primarily million ratio be equal. partial as the leverage second fell F CETX quarter, assets, by at the securities of down X X.X%, balances $XXX being the over the result a January. will So our Tier change Series

As noted, to ahead business. model to Tier appropriate XX% to target this as repurchases as set between up you and our as continue on million slide CETX appropriate a authorized also X.XX% of deposits. can consider mentioned see we of quarter leverage we this a with for look ratio X and that in capital I we XX% recent the previously, has X.XX% Last, our even Further, year Ron $XXX in consider being XXXX, can range of our operate common business level and limit with Fed. the as the Board as of second comfortably and growth quarter the consistent for by the stock for

our fees, last translation up solid foreign impact notable sec with total held And demonstrating year-over-year single mid Slide the from from of within making well the a performance, operating institutional growth, items the year-over-year first the growth interest revenue FX headwind historically to servicing headwind line management we Despite roughly of rates, the provide we almost services, we had are digit within the that in improving we’re lending. expenses quarter exceptional of with year-on-year currency controlled was as our XX, trading or making strong solid year-on-year, trends the currency first top our revenue pleased the including in translation, franchise. X% I FX excluding model. excluding result well X% X% services Turning flat year. services business fee our progress continued was progress trading our And and summary with quarterly underlying were as fees fee am results. and and across demonstrates which quarter significant Total fee excluding from up were low headwind

our of regarding level, and Next, second I interest provide short outlook our our amortization quarter. in economic rates uncertain. modestly forwards, macro the assumes remain the line a full current At is year outlook thinking update the full so year pace rate that like curve, current there end would remains to and some steeping improvement modest pressured which improving the of yield suggests premium with

XX% the XXXX for now point-to-point the or markets global equity of as continued current the well market levels FX flattish also volatility. normalization of as be the to rest beginning We’re year assuming from of up will around

of of revenue terms about includes our quarter percentage In for and of tailwinds points the fee currency second X guide expenses. headwinds points X percentage for of XXXX,

revenue X% depending year-over-year servicing fee up overall in fees XQ we that X% XXXX to X% and to FX with expect anniversary to market we a trading CRD. on So management and be up X% as strong equity levels

rates Regarding impact as investment from $XXX to impact $XXX NII million of the NII, to of well amortization per to expect in our end continues portfolio, run assuming long given million the around historically XXXX, we short end attenuate. as here now in rates quarter low premium

We expenses. on and sustainable remain to improvements laser driving productivity Turning costs. focused controlling

expect we potential that X.X% related items or notable rate year-over-year second quarter the upper end variability to the XX%. costs. flat translation will towards ex We that the relatively around XX% expect be some due On with currency of expenses for of ex will to range taxes, revenue tax be our up full year ‘XX XQ

in early X%. year fee still now year, we full year X.X% be again is are up and full guide fee expect revenue up to to revenue taking our it While the

We X% full ex of also variable slightly flat down guide to costs notable to points add our about XX will items. year prior expect related expense revenue higher basis that

of with let guides. fees me hand full and solid point the back translation And FX a there’s full to remember, Just year in year call these Ron. that, expense

Ron O’Hanley

And operator, Eric. we for now open can Thanks, the questions. call

Operator

Goldman Sachs. question first with Your Alex Blostein comes Instructions] from [Operator

Alex Blostein

with more. could we QX I we start maybe So fees. was dynamics sort bit hoping, first, unpack servicing of could a

organic of progressing ex just us back nicely. sounds momentum volumes a to in were Maybe currency and in And taking back, of kind quarter? you fees servicing up X% kind through the then really translation, about it versus walk was pretty higher front trends step the can is So more how market much like sequentially.

to points the business. of new about past I these could data sort between servicing you Eric, you markets in So kind fee pricing, talked that, of was bridge highlighted on the hoping back you the algorithm call,

of added the does maybe a I some single you’ve time. changes digit to how business? given you to think guys like Kind low over of the feel in that growth now that collectively, up seen

Eric Aboaf

the on talk me Let momentum the in a more and about then little quarter start the we’ll business.

we here. quarter like solid we felt think had I a

saw, currency up that was aggregate. of in were just X As fees translation. year-over-year I you mentioned points servicing X% about percentage

growth the here, we If of around X% decompose a appreciation. driver X%. equity there’s mix market positive was you were to underlying So know the the largest items and was always

So markets of equity market that the X%, appreciation low we amount across average. fees which were of up normalized had servicing north on in about X%. of the normal translated That the against down XX% for equity And to to us about brought then tailwind of X% quarter. -- fee the the net headwinds amount

So a quarter. good it was

think some our be on and model we in I activity. there to tailwind flows focus continue is to tends from client what

clearly, said I I’ve And And is some of as then four a growth. lighter net happens, other think had year-on-year a to position have had pretty relatively last had the have basis. And new on we’ll up. but neutral we in six that over a component We to so good quarters. we new quarter be that the that business was that we This it net to as also year in amount, take need a sales ago quarters business.

business that’s, think, net I been have neutral, not real relatively of why segment at business levels we net partly around basis. is be being, For and basis new the amount that a the we enough need not that the time okay or and clear regional but like actioning on we’d is new We’ve win. to been to which

You’ve and to as asset highlighted acceleration, along our that think I I managers, results coming and be the well example, our time for alternative and heard periods. All advantage are some in expansion. will that show positive of which about model starting coverage an I are components those to think

Ron O’Hanley

billion numbers? we And Why with the change you’re it does your that, reported noted, wins in Alpha how basically pleased add part is all that we and we’re given third about. effect, of of of those to second installed, for the grow about the in these think be question, second I things reported would means, first progress enterprise one $XXX installed in and X asking becoming related just the some fit clients. we quarter, the What the though, with that what that the that a don’t are to we’re quarter. these to to to how this be Clearly, outsourcer does already Alpha is as installations. I expect just longer business Alpha we’ve our Remember, is talked

but the things reported be it little in we quarter revenue relatively we’re revenue certainly that the that, So will talking XXXX XXXX about XXXX. and for impact of we nice first impact will see

Alex Blostein

reason to And if much and staying of quick for have even target balance of X.XX% capital the low remains how are surprising. ratios willing sheet Obviously, on you plan, particularly came that Tier And maybe here elevated capital. end, sort willingness the guys the flexibility or I you if or X maybe for continue from one then return your leverage maybe reasons below a grows to not talk you one on I the execute another. a dip guess, guess sequentially described, do your down to going us little there? about below bit to

Eric Aboaf

I the capital quarter plan but or volatility We’re think, return largely on above, that’s X solidly Tier return our solidly still had we’ll some range. the by above are common which ratios, driven equity this

in aspects confidence there are On of matter. different probably leverage, got couple can we that X we’ve do a of Tier So there. what

some we that. to to also we more on quarter -- ability like we this have first, little have to some X.XX% sheet remember, pushed deposits. get And we’d in But room of think, I as operate balance X.XX%. if in to you adjust the

some If there’s and over $XX two last the and the those time ways to sheet. recall, deposits so then billion, billion the accommodate clients we of $XX discretionary range, are you manage in tactical added can $XX billion, balance continue we year some period, overall size the

it’s X.XX% way I the way ratio. speak, right the think pushing to right our we coming outside on range is rather move to strength of occasionally the an because now, to the we’re and around. right if it’s have so us of because below that’s ability certainly that clients risk, And brand,

if that And we quarter two can or for so necessary. a always do

of fed And how this to part our what support continue so we’re time clients easing. of very mindful do is of during we

And the through business just that we year, navigate of that as so to kind see there part are normal during of ways activity. our and

Operator

Your next Glenn comes Evercore Schorr question ISI. with from

Glenn Schorr

some pretty think the pretax quarter, on still the things I far but and good ROE there’s are So going below margin in the targets.

headwinds over rates just the the in that I time, you that is side, you on fee simply given think the described. one and built a of function waivers on view do ROE capital in, as getting an margin in closer that the a X% felt your business feels to like than momentum targets, that, than ROE low you but growth down ROE, it quarter, the the all considering because that’s to better built. But better

think how on curious just So that. about you

Eric Aboaf

couple to of in things A just first. mind keep

our First because point incentive seasonal on quarter is expenses. of always compensation every margin low deferred year and ROE the

come full year we’ve to So look. a and take then those through got

little a be that. on cautious just I’d So

really more think in focus. a of that’s broadly terms I ROE

revenue. added ROE seen few last think has you’ve in I We the and target. years, our to that a now margin fee proxy management over

team points. incredibly we’re And who’s leverage and to major month those focused So every got you three management on about entire I’ve tell got I’ve quarter. thinking those every

of terms trajectory. think perspectives think way I its from ROE about I in a of probably is the couple

is into and fee just we’re interest rates. margin. margins over continued is margin X That in up. this notwithstanding first, of expenses year, actually extend revenues falling trying think, us seen points given a time, you’ve But to on of and filter expansion every flat hold hold going ROE. point ROE steady, back the to, I and margin And work

think real, is hinted you there’s think, And I second capital I there. one flow So then the through around return.

We’re a earnings year, XXX% capital return in We’ve pleased of to pattern quarter, done to this very up return way drive the a we’re return of investors to as quarter. this line to the ROE. fed in quarter, limits. committed that again with in And capital first and second to

a path well. way that think And there’s I in so as

Glenn Schorr

to growing waivers. comments Maybe net. I on your and appreciate I follow-up XX XX heard fee that. quick XX one on the

towards you love it a a obviously, much Just more what big number, like quarter? yield that’s to trip, needs which because as speak, reference was up. sequential to step? And know us big points then part works a which need in generically, the up And a hear so get I’d current of I back level, a to to over XX about how importantly, is to wire, to how and but level XX go breathable step or the think more how

Eric Aboaf

have is have of some market industry the money the the waivers others of seeing more I money news think money because size we fee market waivers, complex. we fee nature just are our the while market don’t that good here fee, institutional of around

fee basis in points to points, points fee to literally, are pressure points, rates. point you’re seen. with. to down point points the X or to impact short we reinvestment where of be everything management get starts X effectively month point. move basis X money result, context as three And repo some at X market basis you’ve month The X that’s to could basis be It points X And kind end help rate think from basis basis And I effectively, overnight three rate point the the at and the So X fell that against waivers inflected. basis one and the the does by driven as from March, and have are one a starting as month to treasuries treasuries.

complex, into you tell cash into we’ve all inflows guide think, part monitory that an what I offerings. that factored have that I’ll is, And that’s think we’re of managing comes easing we’re been continuously Part of and of I seeing. the our that of and the attractive set we good the news here part policy from through. is our

Operator

Your comes next with question Deutsche from Bedell Brian Bank.

Brian Bedell

maybe the interest on Just to outlook, XXX net the more basis. one rates. a Maybe XXX focus on on revenue quarterly

assumption of XXX have it I next improve to from later the -- there sort we the of of even they a get in where the premium are mix improving down the year, shift curve stable both prohibit the would the part half? and Given now, within likely the rates would over are forward year. that easing view if what second Is thought course amortization as short the of would

Eric Aboaf

amortization, have in the an that level from about for They the points On the are long but they the I think end against nudge a now impact as of months would then we that’s NII. a premium tailwind long headwind the impact a at which portfolio, seen. have come rates in XQ the NII, what about this it is and and came understand short from headwind way rate work points drives best the the quarter, rates, have long what of that down, in headwind have sequentially been has additional even was a worth second last to down preferred to started down XQ actually the portfolio. end rates X had has quarter, year all through X of of current to three is were for started to example, end now to and by first so we’ll

looking end And headwind long to just the three this about long of were -- premium Think there’s when being another What year about of duration years. the of headwind. when play amortization which a cycle started the is so has we’re long rates portfolio rates through. a so kind continued for average was rates, end down. to year having the is now you’re Remember, ago, slow rate from

premium And of slow out effectively question coming to We when out, long a offset over uplift. but begins long continues just ahead see end just second those to a the there models, be of to two create but that do that’s And and why for to will based is that need will the to for crossover to substantially headwind need we be end begin happening that pace this some end this of still starts books. the we’re down, And is long neutral. in enough should it period us thus, to of rates year time the headwinds. to I that premium trying getting careful how uptick think headwind and on rate don’t expected time point. about that that sometime to offset the just we don’t think those I’m three roughly year. And play in effectively we year, on for turn. partial an what amortization is rate is that And the is collection that two half fall various more see the couple looking of and and be through we Now because the to that what to so slowing know because see see quarters. I avoid we has think amortization we’ll is need that And flow to what

Brian Bedell

Invesco And win. the then on

you but Invesco. the me think actually revenue calibration after of just revenue I’m wrong, and were to a custody if typically, you just you to the think build the And you installments, of time I or -- expense, then that’s in. offset about able have immediately correct little there’s case, revenue if Maybe So accounting expense bit could comes maybe were most these before it’s you for I talk doing sort the are to of if when installed of characterize of ahead that? fund doing the

change that customer. be wouldn’t So price getting from could but revenue if a this to base optically Therefore, given appear the just improvement would you an talk revenue a be more Maybe so in add-on much. about your custody you’re bit? it little would same

Eric Aboaf

me really little we never because revenues individual back onboard bit the clients, talked let and just we’re how individual wins and expenses. not client step about a we’ve Brian,

at and think, because specificity that’s want respectful to getting of level we something our we You’re a be of, positions. not respectful don’t of various into we typically clients, go I

Accounting, describe come products takes take that there’s bit advance seen a custody right I you of other that from on some tell often but development think of And a always. over what win, the office, not installations, for takes. got often, that And because I expenses more your we’ve saying those to a in come I’ve come with would do some some us build time. think as Charles record time. we’ve wins some the technology range and connectivity of professional client are quickly the quickly middle to a that. you’ve We tends I time And in got been them. of on you view is board, and say and more part we more larger more it the River

expect. to we’re business. our give of help So momentum outline. of in to insight our business going the understand do have I you And of give anyway, I our general client quarterly a the that’s be think of to bit our you we of what to what all think right the And is in. little I factors all installed guidance reason the is wins, to activity, everyone Part

Operator

question from Graseck with comes next Betsy Deutsche Your Bank.

Betsy Graseck

could you and you broaden to a accomplish? that you’re maybe been And in give adds I headlines Europe the do generally for as Europe. Could what just just mean around over in you’re Ron, to opportunities that to some I around important to sense had at strategy question trying in the share the that a understand and is wanted gain it looking you thinking capability to perception SSGA. about how SSGA. how out us been in you’ve fact course, answer, of looking strategy to you’re there’s

Ron O’Hanley

do has activities. start us. Europe. Servicing And you by opportunities not a to said be sense in just terms some progress mean, in first, bit that And it but that activities, organic And grow a growth look we’re business I grow. comment there’s reminding I see a exploit about good strategy. feel recent rumors. we’ve driven shareholders of very have makes at we always for have I’ll going the at if feel at Investment makes as including to organic management smaller So grow that It’s will, something there. we result we’ll the, important the inorganic, for also inorganic are but constantly in organic than point, of any looking have secondarily, strategically for everybody position of asset second, of I but a what I’m of most our opportunities opportunities good primarily little to see the us, if opportunities and been to look noted there’s we there very at done the that. as it. by and inorganic of at, sense have to oftentimes, is to we We business We quite But then we to some looking remarks, something mean market position don’t and the my to on and we’ve

Betsy Graseck

there bring service you’re would if you to any And anything you’re to to and capability maybe to it anticipate or currency some eye there’s In be physicals market? servicing servicing are expect the to there use side, a going that into be as seen we’ve how side? on takes sense Bitcoin But And else then understand. helpful physicals separately to particular, be can on that would digital expand long us subcustodians? just give you maybe do ETFs. And your just to the to helpful there is sets understand. also to you to that looking you the service strategy crypto doing and or side Just others looking announcements on in

Ron O’Hanley

and different a things number establish It a long ledger segment means to as lot time We’ve of active certainly of how there. now. been do technology We for we means in crypto lot. there’s got digital a to can place We’ve figure out leadership So and activity position see a in of space in people. blockchain this different a a growing initiatives marketplace. this the

traditional combination factor. the custodying active it’s What of And cryptocurrencies do we’re this, a I we some from How it’s the how that’s in applications about custody, them. of of administration. and to token. fair But here the environment mean think the to you But part in clearly regulatory lots it’s crypto on but and of a trend currency in I of physical look there’s up minds to And this form, just not an other think then here ETF? front think clearly that gating do thinking view physical regulators, and do side say a stay. for that’s servicing the as right about think very would creation move there’s of that’s near cryptocurrencies crypto do how the and we something like? now, But us. about of assets, in context or what catching has that does you fullest basket to does that’s

it’s So part it’s now. and share a very, R&D, our of very important part very very, important our online a of

Eric Aboaf

just crypto -- for I’d and described, that, us a are that, forth. whole add whole Yes. as in there’s right? ways Ron announced Betsy, to seen across all participate There chain, the us value a you’ve do

white where mainstream. for makes retail makes an for conscious a and we I we’re increases it ETF of mainstream very is Because space, institutions. one. bit more important where access. bit little It also it is takes think and is near-term ETF, crypto are it the think there retail opportunities. It And on side, something that Why? the a

spaces. of the area player of credibility the this we’re white regulatory and and large, is of many one that’s active support need got clients that we to a go ETF. because our innovating clients through could also of be they and so and keepers in are we and those We’ve And both our and a lean are, participant And you record a while need can And by very real pipeline one we these core administrators, all who bring. clients a strong The think stage, important right? of in where approval saw crypto space in real announcement. emerging

Betsy Graseck

will when do expect and And be you up the running? capability

Eric Aboaf

capabilities, that, is different the just often today relationships, of we everything the capability and partner right? custody in core is itself. assets. subcustody Recordkeeping do to which to We there that tokens the itself. appointments a And relationships why stages subcustody have say we’ve the partner administration had been in something just we process. and here There’s often appointed well, around have and from that’s -- not The are we is We are U.S., advanced Canada, space, I’d in pipeline this Germany by several appointed market various very -- who but world. in regulatory of ETF the in approval providers do, Australia.

that but have clients. roll and -- support administration we today of that out to record-keeping And are in ready our so capability

Operator

Ken Your with Usdin next from Jefferies. question comes

open. Your line is

Ken Usdin

had Eric, you questions how amount built and of how period-end on -- but your follow-up on sitting any seems more balance into you portfolio are a a NII today. cash of contemplate it good you growth, terms the a changes do that outlook? couple in forward? you -- like going follow-up of around reinvest both that have noticing actually was the And Is deposit so that smaller investment average, sheet,

Eric Aboaf

to have rise. where Yes. are now the the Ken, going and by portfolio amount we’re are shock either to not. good of And NII rates especially We between AOCI we or growth driven be the in that the question. mindful of risk a always place question or balance is, stay rate flat get investment we that to likely take,

a duration rates So we bit Remember, will took be just duration in little need lengthen. quarter to that. off rose. careful We of first of naturally, our MBS the as table the

-- partial the where by a it a see. does But to did downdraft also are the solid that gave in relative in in I that that against so we long-end year put coming we need us and protect put -- a here. the and resized we doing investment just that ago point it protected to up to to early We continue we nice AOCI But is we portfolio offset does reasons XX% we at work quarter, what cash our the of larger. shortened that. can the rate It to was a outlook the that of the bit And in we little to a we that included around provide with around adjust we there’s capacity team may to is run. the the position have we quarters make what certain right a the job where a wanted that. most in that though the edges some was I that bit, have. little have will -- will had range, a some can And had of think quite to it’s in did one And we trade

Ken Usdin

to I’m you this mentioned us of the just the Okay. so help think much target outside episodic come were if a just does back? if an can you that what you anomaly how in wondering did point, in range, we quarter saw I getting of And wondering on that mention the above understand weight -- RWA. back was And CETX? ratios increase OCI? just much XX.X% how that this of And the

Eric Aboaf

Yes. of point two them X.X The worth about episodic were that items mentioned, of I CETX.

the a So all we else ratios ratios flag lighter, fine. which occasionally if that’s little a will being base book is would printed push and when overdrafts printed equal, happens are dollar down up because XX.X% money, our might to XX.X%. We sometimes and the or spike the pretty come billion in spike a it which These on hedged. push they just you bit have billion sort heftier up flowed typical of having we overdrafts occasionally they as derivative up $X $X through. XX.X%, is in of hadn’t the which up balance strongly, well, end of positions if

have RWA standardized this a weighted we in assets ran and that -- strengthened, heavily We liabilities in has by the book. dollar We, But that as that positive gets the rules. mark-to-market. case,

dollar $X move in had last so And billion which has other remediated literally direction. $X -- back over you as kind billion of other actually the the move, -- the the X to weeks two RWA

and running So time, costs this us this reversed anyway, and at point just the on business volatility. it’s But about of some part always we of it -- X.X have CETX, we’ll since

Operator

with comes UBS. Brennan Hawken Your next from question

Your line open. is

Brennan Hawken

going revenues but the the on? though to seems that you the adverse, volume-driven as curious almost components imperfect compression a It servicing, some that a the Is bit there’s the year. of seems year, full anything of intact could the AUC specific there rate? the mix be as piece the when there’s I at on in B-rate on to of any outlook a rest Just some color relationship AUM though -- and will be outlook. assume servicing here revenues if can really is the amount Does way outlook given fee got. that’s or it to an Or lagging would only to helpful. the way that your going that decent of model, a seems we there’s It additional of this there be is with know for and though it’s suggests normalization that remain give, as headwind look

Eric Aboaf

we to little biggest fees, XX% a actually Sure. bit anomalous almost think and drives now that have AUCA naturally means servicing in like the between fee in that’s have to as equity Brennan, lower impact markets, a due effectively fee tends significant it’s and XX% markets Remember, thing I very equity and offset rise by business driven It’s be XX by -- just different, a through markets comes are a if point it’s lower. it the just because change. that ACA every of right? It’s that rate right the fees. increase percentage which where rate that happening in change not asset where just management bond not linear, played servicing mathematically three-point is AUCA points point and for

see look that’s year. the biggest that quarter, item to and of I you’ll the at year-on-years we If think So that first plays for through. the the quarter rest first

So mathematical result. that just very just about careful be I’d

fees, by that’s be fees points part. some that lot X% currency for growth translation result south, of equity by And going a servicing X% of equity that going are it’s healthy be few you I had second business most that that of I adjusted on X% a X% year-over-year, and of I in our A open and in still lens think and markets, appreciation a of servicing think would part. step There’ll very that’s of business if currency model fees, up And markets quarter guided of again, to the this good again, up rate. is that’s driven when back part saw nominally, seeing they’re we you translation. the market sort always range. when bond model. it’s offset part the but our up, that, quarter

expect now right year-on-year we’re -- for that the driver out you then growth, we strong we’ve revenue large got of equity think model we comparisons that could the markets we and levels the for that that’s at, at of quarter and of these a second can year. So

Brennan Hawken

of were And and I’m NII more better was just horse getting dead quarter the kind green that maybe the to I the suggests a sort know and we think we outlook, when then on were in March guide to a things there’s then shoots. seemed plenty And a that little little about going there’s late this offset lot -- to update to an in about suggest here bit. Okay. inflection this those me beat bit NII. going of talked that a that There to a the was struggle we because of the

seems a they intra-quarter the and So right? what matter changed here? clearly the we problem, some Short back we we’re dynamics it update It market to curve. more the what’s seeing in of in like cause the But in holding that heard would is that’s are portfolio -- constructive you or the rates the -- either Because seemed the LIBOR that update. all knew and end the at it when between the long like delta of

So bit that it less was could the or a behind that the of had little off the maybe weren’t there maybe something have scenes little happened make a that of outlook we constructive? outlook aware take

Eric Aboaf

I candid and Brennan, appreciate your good being question. direct.

happened numbers exogenously stirred mattered things beginning two the up in think the that we and since when I March now.

a persist we’ve at much seen lower short the First is rates level.

of were clearly And the were for so they treasuries sat basis or to the sit have going three-month and here four And going of rest the early back? where March, been we’re year, weighted at quarter, one-month we or they’ve rest bounce think to here points I when down.

in So I not think we that relative been development. think cost not cost $X us I $X XQ, in us means XQ, kind so -- which in $XX welcome about of $XX $XX would have a a XQ, in and first to quarter another XQ, that’s in where cumulatively that’s effectively

commentators we’re -- back, and one prepayment a fairly it’s acceleration number think from it’s real, hopefully that’s rates on then then the Fannie, careful that The and be of the in they up, industry-wide, seen the burnout some as amortization. upside, the data. one just now think have I other by the about it if think, print and that premium we mode. boomed have think But last the -- prepayment instead small of all we’re, And I of had last folks. a one month rates industry. we’ll you’ve downtick. that slight of gas about bounce it’s will the saw be Now I’m talk attenuation a will I But confident but all month, that And I Freddie, in from is Freddie around MBS Fannie, that a

I we’re stabilization first think sure we’re just the I, But because others, and all tell careful. stabilization burnout premium you, to to pace quite We MBS looking in confident I’d like better that if you that for falls to and amortization it’s attenuation the just not just at stabilization, that be quickly, these yet. see aren’t in we the are and only more than love now. me of the Obviously, reminder not I’ll goes a signal let faster the many run. be have don’t of we premium amortization that books -- the of the point

Operator

comes RBC. question Gerard from next Your Cassidy with

open. is line Your

Gerard Cassidy

share remainder you a us Can current the with And course, as continues obviously, of the you’re averaged time, Fed what the through in into to at QE, balance into with $X.X trillion. calibrating of around the end we next know, State deposits about growth increased as see sheet all year us, you next $XXX at month this securities Fed, kind the about you in pre-pandemic, guys during least year billion likely this continue $X QE They’re for Street’s with can the quarter. to how year balance purchases. year? $XXX over share are its roughly Eric, first and from with deposit of and trillion sitting to going sheet billion, of now they’re dramatically $XXX billion

Eric Aboaf

Eric. it’s Gerard,

many clearly, as I changes era for crisis, of in had a question that We leverage wrestling about And a some rule new world. especially $XX,XXX think Fed recompression think happen now banks again. the its we as and then the and financial on we’re the with, that’s sheet new in SLR are ratios. balance post of the global and expansion seen we’re others

balances. is view we policy the I year, general roughly of in last Fed quarter track expansion, we will do buying, And this quite that that again deposit of second compression flatness treasury’s offset own some it And saw then as the system further in banking first in waves. our so then saw and think saw will Fed I in by saw monetary expansion. of some think we’ve pots an seen year. the uptick. And we some so that And the the portfolio, we the

do not time, to just slows will, going to as got we’d activities their And the do do have at And I another accommodate we’re balance that expect sheet, to back to balance when every think continued some Fed it day pools infinite on like growth we -- is I of XX%, are some every goes XX%, et week start XX%, work clients, to to we constrain standpoint, day of and be It’s expansion think for open our have of expect what expect this that’s they’re to expansion Fed capacity to we some because because XX%, of going trying because deposits. we’ve discretionary for pause, the see own we to bond-buying continued to to the that that banks. up our down, them. the business week we important cetera, come the our sheet right to do comes. of of from when they

zero. near We have our a are for deposit at We capacity rates of or options zero clients. adjust. to suite have some We’ve got we those, -- and

facilitate we the securities. to them but with them right can repo or point. help for right? funds. clients, sweep We comes, sweep other help quarter -- today tomorrow at business. market That’s money or sweep We to necessarily. can not them -- or the it’s year can treasury in for help a So It’s next that We certainly into two activities can

and we’ll navigate just we today have if just there’s through. pretty address, a we’ll quarter have we’ll to have think see in or to navigate just and are we’ll We so wave, I next where through. to And comfortable feel the X. But

Gerard Cassidy

a follow-up versus to you maybe your deposits customers deposits move quick would excess those of elsewhere? guys as Have just to your flexibility you are And what percentage that that. where operational have for disclosed

Eric Aboaf

we -- deposits, different types of all we Gerard, It at there -- can think you. liquidity which I we is banks it And what share. and those the the follow you’re nonoperational, some different share. good so we and values, post of the disclosure can LCR different in operational gives describing banks information all starts some type quarter-end to And of of with get some can gives versus kind around up that

Gerard Cassidy

that your in as loan low. notice then XX%. up, increase at not relative to loans? are quarter follow-up the were lenders. average of drove assets loans understand Any question, think, quite end quarter in did -- total that big on your that obviously period-end, color is portfolio what quarter-to-quarter, And But is a down, the the guys or deposits were I the but I you I Great.

Eric Aboaf

Yes.

volatility. bit always of getting a little We’re

are I a think of one the as of is overdrafts the loan, that things had at how right, the the that, spike of I we as end the -- up a mentioned coming well, that’s so one book, And have part of quarter. that through one. just

more we that’s nice is bit -- that we’ve of seasonal added a firm do. one those that late on for call one growth those quarter, capital there’s see a to those loans, and a part -- way, start start capital up in we’ve nice good continued work, lending And we to as draws funds and in balances effect we we’d putting that’s is -- other private loan financing then more to the The and seen the good book these of had our a us. have have equity draws the in have the the have reasons some of and started

Operator

question Mayo Mike Securities. your with And next Wells from Fargo comes

open. is line Your

Mike Mayo

and specific a question I big picture had question.

managers, about proceeding? asset to and for that’s go with Do sell River, something big just a is time picture Charles the that have still talking that is you a to would you client SSGA that How Let’s converting use first. could you flagship were to looking? that other contemplated that? frame be Originally,

Ron O’Hanley

Mike, describe some I of much the proceeding complex. of and much good one lot a to it’s been number it on track. would them was underway It’s -- that’s a big it’s yes, I And got way We’ve a it’s since very one. obviously Yes, it. project, underway. so exactly and But then, complex clients simpler mean other less client

Mike Mayo

to say, pandemic. "No, that. it as is then doors? it is And expansion do to a And internally, been you you the Now I the Because talk of talked that tough say, about new Or to that Or But to you new pandemic, do there -- It’s you when you it’s relates Okay. said generally, model to neutral. get "Well, is see -- more tougher customers?" just just environment? is takes the the have that improve? business on like you’d do guess it’s to better. have and you coverage knock time get execution

bar. the raising We’re

intensity." the raising We’re

Ron O’Hanley

that any the natural is If you’re their lot clients growth the than you right, choice. range. the closures, this very seeing of It’s a opening you this been growth quarters. that, on And industry with ago, ranges much of A over there’s fund of many few not latter. open new the Yes. Mike, already back choice, we’ve the not every there as world. more in years is go existing be desire more doing last is different XX parts right? for Much of less And longer, in funds, new fund distributor -- accomplished. opening narrowing cases, in would

think business a to talk front-to-back pay an not lot increasing and, but So off. can intensity, is we’re about about and Alpha, way see We it starting that to absolutely as We and Alpha to managers, the about core is this asset we’re which to with in continue insurance in see owners opportunity right? have existing doing to or, an penetration, grow, increase we medium-sized still penetration and an what increase asset companies.

medium a particularly So assignments as with it’s the to about land over being to the the and new provide continue yet to we those Alpha, more term. latter very able long as growth little bit much install

Mike Mayo

from ahead. I I’m lastly, $XX the so -- your net NII, quarter, a fee little and off the the then not cliff reading just wrong, guess, fee bit the And nearing was guidance lower guess, and to NII for the falling right? are you worse than -- bottom I unless in it waivers? the first is It’s waivers something million

do if Just NII you just more clarify bottoms? could And one you the time on fee and when we waivers? think hit

Eric Aboaf

at is rest and Mike, the that’s bottom, second it’s for per quarter why quarter Eric. the On to NII, be I’ve million year. to of said I think $XXX the likely the million $XXX

confident level, we’re that, we’ll more so and flattish second quarters. in in from know the that in forecasted think the think they’d balances few -- net when But we’re think we in what there. there, we rates are around for and the versus I or given offset pick does the days, So And -- it that? short range. where a is what bucks what waivers, quarter. level? flattish been plus at coming fee we’re XX that by of being is so question up long And we’ve the done stabilization net XX-or-so how minus today, or it know that’s now the but then on XX, and be they I first is And on we’re the that last at assumption. kind that’s the today, predicated XX-ish they’ve we’ve And quarter,

the We’re short supposed or flat move to way. up, stay obviously hoping rates go that’s actually other

it’s so just on And based that.

Operator

Your next question comes from Rob Wildhack with Autonomous Research.

line Your is open.

Rob Wildhack

managers. On the asset you call January, about to midsized talked in addressing sales

of maybe a one? key too. you differences? be talk but on that, any about And selling market between in helpful, so appreciate update progress the that would selling asset of early part I can and And to pretty some And large manager the challenges a in then your to it’s that midsized

Ron O’Hanley

don’t is medium-sized years -- the we’re built very whole need Rob, was of It’s not say large a managers. but the things couple of a they to customization, on our of this, asset sale around lot that part standardization. manager to servicing more over much success asset

as up to unit with to does us. and But product in way it capabilities. for what here service, time, scale doing the same sales at much to around of sell a required cost you including that to to, us recognized to standardizing serve they’re that expected way works sure that receiving we’ve we’ve such that make doing be the in coverage adding can been again, for at how we’re and of do much amount them, and we’re a way service has parallel having service as has right establish a done effect, a at appropriate So service cost model it a the in that to the delivering And that us. that

need what and that talked problem. to through at This service level, is products was also new range do a their and actually is we to to And be bit either sophistication pricing able -- is I higher the work a we’ve -- that do firms that model. So not about can a same of tolerate want this at through time, you mean, median many on of underway. there’s a their

will, our underserved their and really base truly the that is they lot of overserved. clients based understanding a satisfied client the are segmenting into if not what about this and they’re bucket, not sure and getting on right So you and needs they’re that making

Rob Wildhack

talk wondering of business in more there, Lat-Am, otherwise, you if expansion, potential too, the earlier America. you to international That’s year, source the about a Latin an for and expansion And was really this forward? helpful. opportunity of And could and announced then growth be I going

Ron O’Hanley

little people Very and investment of but Well, on elsewhere. shoots. had historically, few is growth massive we’ve veteran covering our the very our it, some client a a have seen people. America, green already we’re now, market from not but that attractive We put This few base small Latin We’ve though, seeing there. a from U.S. come really a loyal relatively put very skilled of part, we’ve actually a we’ve lot outside

So a intensified effort. already less this opportunity. happening, we see a to long-term as Activity this year is even though into medium- we’re than

a in place EMEA see so we and as to And we nice already APAC. it in supplement what have

Operator

Vivek Your next question comes with Juneja from JPMorgan.

open. line Your is

Vivek Juneja

Ron Hi, Eric, couple and folks. a of for you, questions

about down were linked which fees, FX X% management ex Asset translation. quarter

reallocation. You that onetime have? And how was to it asset mentioned was due it that a an Or was impact and thing? did client What of that? -- much

Ron O’Hanley

corporate -- Yes, the pension these it. it was would an client, best lot describe pension doing is and right, large corporate what a are a maybe it’s to way Vivek, extremely I derisking. It describe funds doing fund as idiosyncratic was of days,

made not a up move their more a schedule gone, derisked in I from the the fact show That’s result such or that allocation seen. it’s it as So has. mean quite was a the on it all plant of that’s it we’ve up but trend of results a that way high fee to much a asset a very that them, it environment new, happens content allocation. ask lower before very is our big

Vivek Juneja

you, growth there and on on liquidity that, want you’re drive earlier rates were to else do higher-yielding something into your an assets is quarter. linked Eric? move an would to basis to flattish securities? of this Eric, liquid NII just securities to Or see you before a follow-on in average willing level one question for your What do some of that you

Eric Aboaf

or really There really, two probably, triggers us. two three Vivek, break it’s Eric. for -- There points or

outright good of level in in not the rates is one we’ve XX, -- think movement we’ve movement I much some in seen seen that Xs.

the so a to we’d be work, need to bit, -- little does volatility. we move because when of curve AOCI like money careful more duration is comes question our duration with put we a And little more because the to while broadly

so positive we it’d for good the need right that of to that bit -- be down make bit either curve that’s where get before quickly. it’s be rates, higher. in we the, to where treasuries that are them AOCI, helpful. right not rates, now, levels come And clean MBS, everything basis great off, whatever, were an XXs pay the to in higher at to to down at you rates And XX, see is see. good good it’s trade point nice Xs duration and so XXs, a higher if a to going back And higher XX benefit on we’re very level off come would range, or a But we’re so

before of an more a trade bit and And the forth, so we framing that of need really help. that’s little the It won’t actually upswing might we trade into probably lean slope but so and mean edges doesn’t we trade. around the

Vivek Juneja

quick One one.

costs Just of in Can processing million, a color transaction it -- but and and what little give million I was $XX info there? you had involved $XX you other was of systems. legal noticed on

Eric Aboaf

the number Yes. that that we this were Vivek, were costs that some they’re They were of on had. at the partners either we, reimbursable not did a this recently was There reimbursable. by or ago. a that legacy matter other thought and sheet, time, balance years conclusion we accumulate to dates came clients that

episodic And And be was the -- cleaned or RWA years, misspoke quarter. way we question. been still but not a as have about and so I so it XX.X% $X up, number up made an and said, in clarify, operator, in dates RWA effectively, of $X it million billion on, we I been his they expensed, accordingly. to to adjustment billion back for here. $XX.X is need ratio books Had would our on bit to XX.X% don’t But know if little a I CETX range. then just the the this up, Ken

Operator

Morningstar. with Your next Bhatia Rajiv question comes from

Rajiv Bhatia

quick question. Just a

on to firms retention can new outsource? Charles deciding competitive your environment takeaway And from For and of competitive how your trends? River, comment wins is versus much you

Ron O’Hanley

it’s I competitive. Yes. mean at the look it through in of penetration. I it’s competitiveness -- both terms its the of -- mean, its product, I can you mean

in the of R&D lay we’ve at just when you other You terms look the it development can competitors it. our into alongside and software it put

so as systems it’s anymore. takeaway in mix. proprietary opposed of be think to of strong on, big when OMSs it. be tends tends being attractive achieved, no out bit new is to going consolidating, business put market to existing proprietary it inherent that’s systems it in way, by supported. most competitors. some in I the longer were with a somebody In Which That not it’s it most tends for that replacing terms There’s the replacing our little of the supported many cases, And And aren’t analytics or the be of that just that makes a competitors. the or risk but is, what to something duking versus takeaway much typically, being is it doing as growth or market something really

Rajiv Bhatia

it. Got

like that competitive necessarily outlook, doesn’t like double-digit displacement? growth So your much

Ron O’Hanley

No.

Operator

Your comes from Kleinhanzl with Brian question KBW. next

open. Your line is

Brian Kleinhanzl

Eric waivers? that or kind revenue for that questions the the you questions of year quick around full two guidance. inclusive clarification Just was On of More here. money fee guidance exclusive fee that market gave,

Eric Aboaf

inclusive. was That

it’s in covers all update the on business, ins market outs of So the all including fees. guidance. the It money and

Brian Kleinhanzl

of And were of far? today, markets you the full then were and guidance, XQ as in of move quarter-to-date year, as the the thus equity or where as giving also obviously, end the quarter Okay. on that markets

Eric Aboaf

the I guidance. directional the difference -- we’re It’s think I’ve that. market’s trying moved so split on some to much, give

see the still I are, last the the think where the this point-to-point XX and we of period that in period and points. or not, -- we if the last We’ll equity year wrote year percentage this increase given markets, assuming stays we’re over week. for

line around well. So, as we’re that with now, also they where up assuming equity endpoint markets which stay would are

Operator

for this at Mr. further There are now turn it will time. remarks. back no questions closing O’Hanley to I

Ron O’Hanley

Thanks we speaking forward and look to thanks your and quarter. with to operator, for us, you, all Thank questions. joining the you for throughout

Operator

concludes This today’s for Thank conference participating. you call.

disconnect. now may You