State Street Corporation

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State Street Corporation is an American global<ref>Template:Cite magazine</ref> financial services and bank holding company headquartered at One Congress Street in Boston with operations worldwide. It is the second-oldest continually operating United States bank; its predecessor, Union Bank, was founded in 1792. State Street is ranked 14th on the list of largest banks in the United States by assets. It is one of the largest asset management companies in the world with US$4.7 trillion under management and US$46.6 trillion under custody and administration in 2024.<ref name="Reuters 2023">Template:Cite news</ref> It is the second largest custodian bank in the world, providing securities services<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> and it is considered a systemically important bank by the Financial Stability Board.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> Along with BlackRock and Vanguard, State Street is considered to be one of the Big Three index fund managers that dominate retail investing.<ref>Template:Cite journal</ref><ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

The company is ranked 316th on the Fortune 500 as of 2022.<ref name=Fortune500>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> The company is on the list of the banks that are too big to fail published by the Financial Stability Board.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> It is rated by Visual Capitalist as the third U.S. bank by uninsured deposits, with 91.2% of deposits being uninsured.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

The company is named after State Street in Boston, which was known as the "Great Street to the Sea" in the 18th century as Boston became a flourishing maritime capital. The company's logo formerly included a clipper ship to reflect the maritime industry in Boston during this time.

Current operations

Investment servicing: State Street Global Services

{{#invoke:Labelled list hatnote|labelledList|Main article|Main articles|Main page|Main pages}} State Street Bank and Trust Company, also known as State Street Global Services, is the securities services division of State Street that provides asset owners and managers with securities services (e.g. custody, corporate actions), fund accounting (pricing and valuation), and administration (financial reporting, tax, compliance, and legal) services. Global Services handles assets from many classes, including stocks, derivatives, exchange-traded funds, fixed income assets, private equity, and real estate. Global Services also provides outsourcing for operations activities and handles US$10.2 trillion of middle-office assets.<ref name="10K" />

Investment management: State Street Global Advisors

{{#invoke:Labelled list hatnote|labelledList|Main article|Main articles|Main page|Main pages}} State Street Global Advisors is the investment management division of State Street that provides asset management, research, and advisory services to corporations, mutual funds, insurance companies, and other institutional investors. Global Advisors develops both passive management and active management strategies using both quantitative and fundamental approaches.<ref name=10K />

1993 SPDR innovation

In 1993,<ref>Template:Cite news</ref><ref>Template:Cite news</ref> the company created the SPDR S&P 500 Trust ETF, the first exchange-traded fund (ETF), and is now one of the largest ETF providers worldwide.<ref>Template:Cite press release</ref> Trading on SPDR began January 29, 1993.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

State Street Global Markets

Global Markets is State Street's securities business that offers research, trading, and securities lending services for foreign exchange, equities, fixed income, and derivatives. To avoid a conflict of interest, the company does not run proprietary trading books. Global Markets maintains trading desks in Boston, Hong Kong, London, Singapore, Sydney, Toronto, Tokyo and São Paulo .<ref name=10K />

History

The company traces its roots to Union Bank, which received a charter in 1792 from Massachusetts Governor John Hancock. It was the third bank to be chartered in Boston and its office was at the corner of State and Exchange Streets.<ref name="best">Template:Cite news</ref><ref name="History">FundingUniverse, 2014, History of State Street Corporation, retrieved 22 June 2014</ref> In 1865, Union Bank received a national charter and became the National Union Bank of Boston. The bank later built a headquarters at Washington and State streets.<ref>Template:Cite news</ref>

State Street Deposit & Trust Co opened in July 1891. The name was shortened to State Street Trust Company in 1897. It became the custodian of the first U.S. mutual fund in 1924, the Massachusetts Investors Trust (now MFS Investment Management).<ref name="History" />

20th century

State Street and National Union merged in October 1925.<ref name="best" /> The merged bank took the State Street name, but National Union was the nominal survivor, and it operated under National Union's charter, thus giving the current entity its rank among the oldest banks in the United States.

The company merged with Second National Bank in 1955 and with the Rockland-Atlas National Bank in 1961.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref>Template:Cite news</ref>

In 1966, the company completed construction of the State Street Bank Building, a new headquarters building, the first high-rise office tower in downtown Boston.

In 1972, the company opened its first international office in Munich.

In 1973, as a 50/50 joint venture with DST Systems, the company formed Boston Financial Data Services, a provider of shareholder record-keeping, intermediary and investor services, and regulatory compliance. More than 100 top staff from IBM were hired by State Street as it set about implementing IBM mainframe computer systems.

In 1975, William Edgerly became president and chief executive officer of the bank and shifted the company's strategy from commercial banking to investments and securities processing.<ref name="History" />

During the 1980s and 1990s, the company opened offices in Montreal, Toronto, Dublin, London, Paris, Dubai, Sydney, Wellington, Hong Kong, and Tokyo.<ref name="History" />

By 1992, most of State Street's revenue came from fees for holding securities, settling trades, keeping records, and performing accounting.<ref name="History" /> In 1994, the company formed State Street Global Advisors, a global asset management business.

In 1995, State Street acquired Investors Fiduciary Trust of Kansas City for $162 million from DST Systems and Kemper Financial Services.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref>Template:Cite press release</ref> In 1996, Bank of New York acquired the unit investment trust servicing business of Investors Fiduciary Trust Co., Kansas City, Mo.<ref>Template:Cite news</ref>

In 1997, State Street setup its office in Singapore.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

In 1999, State Street sold its retail and commercial banking businesses to Citizens Financial Group.<ref>Template:Cite news</ref>

21st century

In 1990, State Street Bank Luxembourg was founded, and Template:As of is the largest player in the country's fund industry by assets.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

In 2003, the company acquired the securities services division of Deutsche Bank for $1.5 billion.<ref>Template:Cite news</ref> The company also sold its corporate trust business to U.S. Bancorp for $725 million.<ref>Template:Cite press release</ref> Also in 2003, State Street sold its private asset management business to U.S. Trust.<ref>Template:Cite press release</ref>

In July 2007, the company acquired Investors Bank & Trust for $4.5 billion.<ref>Template:Cite press release</ref>

In October 2008, the United States Department of the Treasury invested $2 billion in the company as part of the Troubled Asset Relief Program and in July 2009, the company became the first major financial firm to repay the Treasury.<ref>Template:Cite news</ref>

In 2010, the company acquired Mourant International Finance Administration.<ref>Template:Cite news</ref> It also acquired the securities services group of Intesa Sanpaolo for $1.87 billion.<ref>Template:Cite news</ref> In December 2010, the company announced that it would be retrenching 5% of its workforce and effectively reducing the hourly wages of remaining employees by 10% via increased standard work hours.<ref>Template:Cite news</ref>

In November 2011, the company was named as amongst the world's 29 systemic banks.<ref>Template:Cite news</ref>

In 2012, the company acquired Goldman Sachs Administration Services, a hedge fund administrator, for $550 million.<ref>Template:Cite press release</ref>

In November 2014, the company sold SSARIS Advisors, its hedge fund unit, to senior management.<ref>Template:Cite news</ref>

In 2016, State Street launched a program called Beacon, focused on cutting costs and improving reporting technology.<ref>Template:Cite news</ref> Their main focus was to shrink their US workforce in order to bolster profits in excess of $2.5 billion (2018 figures).Template:Citation needed Also in 2016, the company acquired the asset management business of General Electric.<ref>Template:Cite press release</ref>

In 2017, the company announced that Jay Hooley, the chief executive officer of the company, would retire, to be succeeded by Ronald P. O’Hanley, then vice chairman, president and CEO of State Street Global Advisors.<ref>Template:Cite news</ref>

In 2018, State Street completed its acquisition of Charles River Development, a Burlington, Massachusetts provider of investment management software.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> The deal closed October 1, 2018, at a cost of approximately $2.6 billion that will be financed by the suspension of share repurchases and the issuing of common and preferred equity.<ref>Template:Cite news</ref> News of the acquisition led to a drop in State Street shares of nearly 10% with share prices remaining flat since the purchase.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

In January 2019, State Street announced that it planned to lay off 1,500 employees, increasing the number to 2,300 in July.<ref name=":0">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> During that period, the company shifted their workforce from the United States to countries like China, India and Poland and operated under a hiring freeze.<ref name=":0" /> The increased overseas hiring resulted in a net gain of employment of over 3,000.<ref>Template:Cite news</ref><ref>Template:Cite news</ref>

In September 2021, State Street agreed to buy Brown Brothers Harriman & Co.'s investor-services business for $3.5 billion in cash.<ref>Template:Cite news</ref> Following continued scrutiny in receiving regulatory approvals, the deal was mutually agreed to be dropped in November 2022.<ref>Template:Cite news</ref>

Controversies

Currency trade fraud

In 2009, California alleged on behalf of its pension funds CalPERS and CalSTRS that State Street had committed fraud on currency trades handled by the custodian bank.<ref>Template:Cite newsTemplate:Subscription required</ref><ref>Template:Cite news</ref>

Non-disclosure of short position

On February 28, 2012, State Street Global Advisors entered into a consent order with the Massachusetts Securities Division. The Division was investigating the firm's role as the investment manager of a $1.65 billion (USD) hybrid collateralized debt obligation. The investigation resulted in a fine of $5 million (USD) for the non-disclosure of certain initial investors taking a short position on portions of the CDO.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

Shareholder complaints

During the May 2012 annual shareholders meeting, chairman and chief executive Jay Hooley was shouted down on numerous occasions by protesters in relation to the outsourcing and other grievances.<ref>Template:Cite news</ref>

Undisclosed commissions

On January 18, 2017, State Street agreed to pay $64.6 million to resolve U.S. investigations into what prosecutors said was a scheme to defraud six clients through secret commissions on billions of dollars of trades.<ref>Template:Cite press release</ref><ref>Template:Cite news</ref>

Fearless Girl statue

In March 2017, State Street Global Advisors commissioned a statue called Fearless Girl by Kristen Visbal and placed it temporarily in the Financial District, Manhattan, in front of the Wall Street icon Charging Bull. The statue is an advertisement for an index fund which comprises gender diverse companies that have a higher percentage of women among their senior leadership.<ref>Template:Cite news</ref> While some have seen it as an encouragement of women in business, some women criticized the statue as "corporate feminism" that violated their own feminist principles.<ref>Template:Cite newsTemplate:Subscription required</ref><ref>Template:Cite news</ref><ref>Template:Cite news</ref><ref>Template:Cite news</ref> In October 2017, the company paid $5 million to settle a lawsuit charging that it had paid certain female and black executives less than their male and white peers.<ref>Template:Cite news</ref>

Climate change

State Street announced in January 2020 that State Street Global Advisors will vote against directors of companies in major stock indices that do not meet targets for environmental, social, and governance changes.<ref>Template:Cite news</ref> According to Morningstar Proxy Data, State Street, "supported a majority of the climate-related disclosure requests that shareholders placed on the ballot," during the 2020 proxy season.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

Investments in China

In February 2025, a group of 17 U.S. state attorneys general criticized State Street for making improper or inadequate disclosures about investments in China.<ref>Template:Cite news</ref>

Financials

citation

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Revenue	3.577	3.827	4.396	4.734	4.951	5.473	6.311	8.336	10.69	8.640	8.953	9.594	9.649	9.884	10.30	10.36	10.21	11.17	11.98
Net income	0.595	0.628	1.015	0.722	0.798	0.838	1.106	1.261	1.811	−1.881	1.556	1.920	2.061	2.136	2.037	1.980	2.143	2.177	2.599
Assets	69.30	69.85	85.79	87.53	94.04	97.97	107.4	142.5	173.6	157.9	160.5	216.8	222.6	243.3	274.1	245.2	242.7	238.4	244.6
Assets under management	420	667	800	1,000	1,150	1,320	1,610	1,705	1,650	1,830	2,000	2,159	2,190	2,215	2,230	2,245	2,468	2,782	2,511
Headcount thousands	17.6	19.75	19.5	19.85	19.67	20.97	21.7	27.11	28.48	27.31	28.67	29.74	29.65	29.43	29.97	32.36	33.78	36.64	40.14

See also

• State Street Bank & Trust Co. v. Signature Financial Group, Inc. is a case in which the United States Court of Appeals for the Federal Circuit ruled on July 23, 1998, that a computer algorithm can be patented to the extent that it produces "a useful, concrete and tangible result".

External links

Archives and records

• State Street Bank records at Harvard Business School.