State Street (STT) plans to raise dividend 10%

State Street Corporation (NYSE: STT) today announced its preliminary stress capital buffer (SCB) requirement, to be maintained at 2.5%, effective October 1, 2023, and the intention to increase its per share common stock dividend by 10% to $0.69 in the third quarter, subject to consideration and approval by its Board of Directors. It remains the Company’s intention to continue common share repurchases under its existing authorization for up to a total of $4.5 billion in 2023, subject to market conditions and other factors.

State Street’s well-positioned balance sheet and strong capital position were highly resilient under the severely adverse economic conditions of the 2023 CCAR exam. State Street’s calculated SCB under this year’s supervisory stress test was well below the 2.5% minimum, preliminarily resulting in a continued SCB at that floor, which maintains our common equity tier 1 (CET1) ratio requirement at 8%1.

“The latest CCAR results reinforce our strategy and confirm the resiliency and strength of our franchise, which enable us to support our clients and deliver for our shareholders,” said Chairman and Chief Executive Officer Ron O’Hanley. “As we continue to repurchase our stock this year, we are pleased to announce another planned increase to our quarterly common dividend, in line with our goal of returning meaningful capital to our shareholders,” O’Hanley added.

State Street’s Board of Directors will consider the common stock dividend at a regularly scheduled board meeting in the third quarter of 2023. State Street’s third quarter 2023 common stock and other stock dividends, including the declaration, timing and amount, remain subject to consideration and approval by State Street’s Board of Directors at the relevant times.

Stock purchases under State Street’s common share repurchase program may be made using various types of transactions, including open-market purchases, accelerated share repurchases or other transactions off the market, and may be made under Rule 10b5-1 trading programs. The timing and amount of any stock purchases and the type of transaction may not be ratable over the duration of the program, may vary from reporting period to reporting period and will depend on several factors, including State Street’s capital position and financial performance, investment opportunities, market conditions, the nature and timing of implementation of revisions to the Basel III framework and the amount of common stock issued as part of employee compensation programs. The common share repurchase program does not have specific price targets and may be suspended at any time.

The Company also announced today the results of its 2023 annual stress test, with its disclosure available on the Investor Relations section of its website at http://investors.statestreet.com.

Consistent with section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the results of State Street’s 2023 annual stress test released today are based on the supervisory severely adverse scenario and incorporate prescribed Dodd-Frank capital actions. State Street, like other institutions covered by the provisions of section 165 of the Dodd-Frank Act, is required to conduct company-run stress tests annually under its own methodology and to disclose summary results of those company-run stress tests under the severely adverse scenario.

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