State Street Notifies Asset Servicing Clients about Billing Review

Thursday, December 17, 2015 6:30 am EST

Dateline:

BOSTON

Public Company Information:

NYSE:
STT
US8574771031

BOSTON--(BUSINESS WIRE)--State Street Corporation announced today that it is informing clients about a review that it initiated into the manner in which it invoiced certain expenses to asset servicing clients. The review, which is not complete, addresses the amounts invoiced for specific categories of expenses. Based on the results of the review to date, State Street believes that it has incorrectly invoiced certain expenses to asset servicing clients, primarily in the United States. State Street deeply regrets this matter. At the conclusion of its review, State Street will compensate affected clients fully, including interest, and make any required improvements to its billing practices.

Based upon the Company’s preliminary assessment, over the 18-year period for which it has accessible records, approximately $200 million or more of expenses may have been incorrectly invoiced. During this 18-year period, State Street estimates that it has invoiced asset servicing clients a total of approximately $400 million for expenses falling within the categories being reviewed. Annual amounts invoiced for these expenses ranged from approximately $9 million in the early years to approximately $36 million in 2014. The actual amount to be reimbursed to clients will not be known until the review is completed, and that amount could differ materially from the Company’s preliminary assessment. In fiscal year 2014, the categories of expenses under review represented approximately 0.7 percent of State Street’s total asset servicing fee revenue of $5.1 billion.

The Company will provide additional information on this matter in its scheduled fourth quarter 2015 earnings release and call on January 27, 2016.

About State Street Corporation

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 $27.3 trillion in assets under custody and administration and $2.2 trillion* in assets under management as of September 30, 2015, State Street operates in more than 100 geographic markets worldwide, including the US, Canada, Europe, the Middle East and Asia. For more information, visit State Street’s website at www.statestreet.com.

* Assets under management include approximately $25 billion as of September 30, 2015, for which State Street Global Markets, LLC, an affiliate of SSGA, serves as the distribution agent.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of U.S. securities laws, including statements about State Street’s goals and expectations regarding its review into the manner in which it invoiced certain expenses to asset servicing clients, including the potential results of that review and related matters. Terminology such as “believe,” “will,” “estimate,” “may,” “expect,” “intend,” “priority,” “outlook,” “objective,” “plan,” “forecast,” “anticipate,” “seek,” “trend,” “target,” “strategy” and “goal,” or similar statements or variations of such terms, are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. These statements are not guarantees of future results or 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 State Street’s expectations or beliefs as of any date subsequent to December 17, 2015.

Important factors that may also affect future results and outcomes include, but are not limited to:

  • the findings and conclusions, and the other results of, State Street’s review of the way that it invoiced certain expenses to asset servicing clients, including the ultimate timing of concluding such review, the amounts of any expenses determined to be reimbursable, either in the aggregate or to any one or more specific clients, and other results of such review and the outcomes of communications with clients, and of State Street’s responses to any regulatory inquiries, regarding such review and related matters;
  • the results of, and costs associated with, governmental or regulatory inquiries and investigations, litigation and similar claims, disputes, or proceedings; and
  • adverse publicity, whether specific to State Street or regarding other industry participants or industry-wide factors, or other reputational harm.

Other important factors that could cause actual results to differ materially from those indicated by any forward-looking statements are set forth in State Street’s 2014 Annual Report on Form 10-K and its subsequent SEC filings. State Street encourages investors to read these filings, particularly the sections on risk factors, for additional information with respect to any forward-looking statements and prior to making any investment decision. The forward-looking statements contained in this news release speak only as of the date hereof, December 17, 2015, and State Street does not undertake efforts to revise those forward-looking statements to reflect events after that date.

Contact:

State Street Corporation
Anthony Ostler, +1 617-664-3477
or
Carolyn Cichon, +1 617-664-8672

Media Contacts

Contact a member of the State Street Media Relations Team.

Social Media

State Street on the App Store

State Street on Twitter

We would like to thank de Blasio and those who have responded enthusiastically to what the Fearless Girl… https://t.co/7AyHUeuGMm-1 hour 48 min ago
Innovation and regulation might not be the foes you once thought they were. #FinanceReimagined https://t.co/1ebIuM1LS6-3 hours 13 min ago
From a monumental notion to a political reality. What you need to know following the triggering of #Article50. https://t.co/tGxjwCnx2M-5 hours 27 min ago
The question everyone’s asking – what’s next? #Article50 #Brexit https://t.co/vWwVBWqc5u-22 hours 7 min ago
Business Wire NewsHQ℠