State Street Corporation (NYSE:STT) shares declined 3.51% on Friday after the financial services firm posted fourth-quarter 2025 results that topped market expectations but were overshadowed by sizable repositioning charges.
The Boston-based group reported adjusted earnings per share of $2.97 for the quarter, beating analyst forecasts of $2.78. Revenue totaled $3.67 billion, ahead of the consensus estimate of $3.59 billion and representing a 7% increase year over year.
Despite the stronger-than-expected earnings and revenue, investor sentiment was weighed down by $226 million in net repositioning charges recorded during the quarter. These included $111 million tied to workforce rationalization and $69 million related to optimizing the company’s real estate footprint.
“2025 marked another year of strong performance and strategic progress for State Street,” said Ron O’Hanley, Chairman and CEO. “We delivered robust financial results, achieving positive operating leverage, expanding pre-tax margin, and generating higher returns.”
Total fee revenue increased 8% year over year to $2.86 billion, supported by growth across several segments, including servicing fees (up 8%), management fees (up 15%), and foreign exchange trading services (up 13%). Net interest income also rose 7% to $802 million.
Assets under custody and/or administration climbed 16% from a year earlier to $53.8 trillion, while assets under management rose 20% to $5.7 trillion, largely reflecting higher market valuations.
State Street ended the quarter with a solid capital position, reporting a standardized common equity tier 1 ratio of 11.7%, up 0.8 percentage points compared with the prior year.
During the quarter, the company also recorded $87 million in new servicing fee revenue wins, with an additional $320 million in servicing fee revenue expected to be installed in future periods.