State Street Corporation

State Street Corporation is a multinational financial services and bank holding entity based in Boston at One Congress Street. Established in 1792 originally as Union Bank, it stands as the second-oldest bank continuously operating in the United States. By 2024, State Street ranks among the globe’s leading asset managers and custodians, overseeing roughly US$4.7 trillion in assets under management and US$46.6 trillion in assets under custody and administration.

The firm’s worldwide operations are organized into three primary segments: Global Services (focused on custody and fund administration), Global Advisors (specializing in asset management), and Global Markets (providing trading and research services). It has been classified as a systemically important bank by the Financial Stability Board and is recognized as one of the "Big Three" index fund managers alongside BlackRock and Vanguard.

For the year 2024, State Street reported revenues of US$13.00 billion with a net income of US$2.687 billion, managing assets worth US$353.2 billion and holding equity capital of US$25.33 billion. The corporation employs more than 52,600 individuals across its global operations.

In 2022, State Street was ranked 316th on the Fortune 500 list, noted for its dominant presence in asset management and custody services markets. It is also listed among banks considered "too big to fail" by the Financial Stability Board, with 91.2% of its deposits uninsured, underscoring its critical importance within the financial sector.

Current operations

Investment servicing: State Street Global Services

State Street Bank and Trust Company, operating as State Street Global Services, represents the securities services arm delivering custody, corporate actions processing, fund accounting, and administration solutions including financial reporting, tax compliance, and legal support. This division manages a wide range of asset categories such as equities, derivatives, ETFs, fixed income instruments, private equity, and real estate investments. Additionally, it offers outsourcing for operational functions and supervises US$10.2 trillion in middle-office assets.

Investment management: State Street Investment Management

State Street Investment Management provides asset management along with research and advisory offerings to clients including corporations, mutual funds, insurance firms, and institutional investors. Its Global Advisors segment crafts both passive and active investment strategies employing quantitative analysis alongside fundamental approaches.

1993 SPDR innovation

State Street pioneered the exchange-traded fund industry in 1993 by introducing the SPDR S&P 500 Trust ETF (SPY), positioning itself as a top global provider of ETFs.

State Street Global Markets

Global Markets is the securities division delivering research, trading services, and securities lending across asset classes such as foreign exchange, equities, fixed income, and derivatives. To comply with regulatory requirements and prevent conflicts of interest, this segment refrains from proprietary trading activities. Its trading desks operate internationally from locations including Boston, Hong Kong, London, Singapore, Sydney, Toronto, Tokyo, and São Paulo.

History

The company traces its origins to Union Bank founded in 1792 by Massachusetts Governor John Hancock; it was Boston’s third banking institution. Following acquisition of a national charter in 1865, it was renamed National Union Bank of Boston and later established headquarters at Washington and State streets. The corporation derives its name from Boston’s State Street, historically known as a key maritime commercial center.

In 1891, State Street Deposit & Trust Co was created; this name was shortened to State Street Trust Company in 1897. In 1924, it became custodian for the first U.S. mutual fund—the Massachusetts Investors Trust.

20th century

In October 1925, State Street combined with National Union, retaining the State Street name while operating under National Union’s charter, thereby maintaining its position as one of the oldest banking institutions in the United States.

Subsequent consolidations included the acquisitions of Second National Bank in 1955 and Rockland-Atlas National Bank in 1961. The company erected the State Street Bank Building in 1966, marking Boston’s first high-rise office structure in its downtown area.

The firm’s international footprint expanded with the establishment of an office in Munich in 1972. The following year, State Street partnered with DST Systems to create Boston Financial Data Services, a joint venture delivering shareholder record maintenance and regulatory compliance solutions, powered by IBM mainframe systems.

With William Edgerly serving as CEO from 1975 onward, the organization shifted its emphasis away from traditional commercial banking toward investment services and securities processing. Throughout the 1980s and 1990s, State Street broadened its global presence by opening offices in cities including Montreal, Toronto, Dublin, London, Paris, Dubai, Sydney, Wellington, Hong Kong, Tokyo, and Singapore (which launched in 1997).

By 1992, revenues generated from fees related to securities custody and trade settlement had become the primary contributors to the company’s financial results. In 1994, State Street inaugurated State Street Global Advisors to provide asset management services.

In 1995, the company acquired Investors Fiduciary Trust based in Kansas City for $162 million from DST Systems and Kemper Financial Services. The following year, it divested its unit investment trust servicing operations to Bank of New York.

In 1999, State Street sold off its retail and commercial banking divisions to Citizens Financial Group, thereby reinforcing its strategic commitment to investment services and international operations.

21st century

State Street Bank Luxembourg was established in 1990 and had grown by 2018 to become the leading entity in Luxembourg’s fund industry by asset size.

In 2003, State Street purchased Deutsche Bank’s securities services division for $1.5 billion. That same year saw the sale of its corporate trust business to U.S. Bancorp for $725 million and the divestiture of its private asset management segment to U.S. Trust. In July 2007, the company expanded further by acquiring Investors Bank & Trust for $4.5 billion.

During the financial crisis of 2008, the U.S. Treasury invested $2 billion into State Street under the Troubled Asset Relief Program; by July 2009, State Street became the first major financial institution to fully repay these funds.

In 2010, growth continued through acquisitions including Mourant International Finance Administration and Intesa Sanpaolo’s securities services group for $1.87 billion. That year also involved workforce reductions and salary adjustments aimed at improving financial outcomes.

By November 2011, State Street was classified among the world’s 29 systemic banks. In 2012, it acquired Goldman Sachs Administration Services—a hedge fund administration business—for $550 million but subsequently sold its hedge fund unit SSARIS Advisors to senior management in 2014.

The company introduced its Beacon initiative in 2016 with goals of reducing expenses and upgrading reporting technology; this included downsizing its U.S.-based workforce to increase profitability beyond $2.5 billion as reported in 2018. The same year also saw the acquisition of General Electric’s asset management operations.

Leadership changes occurred in 2017 when CEO Jay Hooley retired and Ronald P. O’Hanley assumed leadership of State Street Global Advisors.

In 2018, State Street finalized a $2.6 billion acquisition of Charles River Development, an investment management software firm headquartered in Burlington, Massachusetts. Financing this deal involved halting share repurchases and issuing new equity; initially, this caused a nearly 10% decline in share price.

Early in 2019, State Street announced workforce reductions totaling approximately 2,300 employees alongside a hiring freeze within the United States; however, recruitment efforts intensified overseas in China, India, and Poland resulting in a net global employment increase exceeding 3,000 staff members.

In September 2021, State Street agreed to acquire Brown Brothers Harriman & Co.’s investor-services business for $3.5 billion; nonetheless, due to regulatory obstacles, both parties mutually terminated the agreement in November 2022.

In February 2025, plans were unveiled for State Street to acquire Mizuho Financial Group’s global custody and related businesses outside Japan—managing roughly $580 billion in assets under custody and $24 billion under administration—with completion anticipated by late 2025.

Controversies

Fraud in currency trading

In 2009, the state of California, acting on behalf of pension funds CalPERS and CalSTRS, accused State Street of fraudulent activities related to foreign exchange transactions overseen by the custodian bank.

Failure to disclose short positions

On February 28, 2012, State Street Global Advisors entered into a consent agreement with the Massachusetts Securities Division concerning its oversight of a $1.65 billion hybrid collateralized debt obligation (CDO). The company was penalized $5 million for neglecting to reveal certain initial investors' short positions on segments of the CDO.

Shareholder grievances

During the annual shareholders meeting in May 2012, CEO Jay Hooley encountered opposition from attendees raising issues about outsourcing and other corporate matters.

Hidden commission payments

On January 18, 2017, State Street consented to a $64.6 million settlement to conclude U.S. investigations into a scheme involving undisclosed commissions on multi-billion dollar trades that defrauded six clients.

Fearless Girl sculpture

In March 2017, State Street Global Advisors commissioned Kristen Visbal to create the Fearless Girl statue, which was temporarily installed in Manhattan’s Financial District. The statue aimed to highlight an index fund focused on companies with greater female representation in senior leadership roles. Although intended to champion women in business, it attracted criticism as an example of "corporate feminism." Later that year, State Street resolved a $5 million lawsuit alleging pay disparities affecting female and Black executives.

Environmental responsibility

In January 2020, State Street Global Advisors pledged to vote against board members of firms within major stock indices that fail to meet environmental, social, and governance (ESG) standards. During the 2020 proxy season, the firm supported most shareholder proposals related to climate change disclosures, underscoring its strategic commitment to sustainable investing integrated into its business approach.

Investments in China

In February 2025, seventeen U.S. state attorneys general criticized State Street for insufficient transparency regarding its investments in China, reflecting heightened regulatory examination affecting its international operations and disclosure practices.

Financials

Financials in billions of US$
Year	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018
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

References

External links

Archives and records

State Street Bank archival materials housed at Harvard Business School.