State Street completed the consolidation of its final operations joint venture in India, which is expected to unlock efficiency savings and improve client experience. This consolidation, along with a prior one in October 2023, increased headcount by approximately 26% as of June 30, 2024.

State Street announced new asset servicing mandates totaling approximately $291 billion of AUC/A in Q2 2024. Servicing assets remaining to be installed in future periods totaled approximately $2.39 trillion as of June 30, 2024.

AUM increased 15% YoY to $4.4 trillion as of June 30, 2024, primarily due to higher quarter-end market levels and net inflows.

State Street returned a total of approximately $407 million to shareholders in Q2 2024 through common share repurchases and common stock dividends. Declared aggregate common stock dividends of $0.69 per share, totaling $207 million.

State Street's standardized CET1 capital ratio decreased to 11.2% as of June 30, 2024, compared to 11.6% as of December 31, 2023, primarily driven by the expected normalization of RWA.

State Street's Tier 1 leverage ratio decreased to 5.3% as of June 30, 2024, compared to 5.5% as of December 31, 2023, primarily due to higher consolidated average assets.

The company recorded a $10 million provision for credit losses in Q2 2024, primarily reflecting an increase in loan loss reserves associated with certain commercial real estate loans.

As previously disclosed, one of State Street's large asset servicing clients is moving a significant portion of its ETF assets to other providers, with the transition expected to continue through 2025. The second quarter of 2024 reflected approximately two-thirds of the revenue impact of the exiting business.

The Basel III Endgame Proposal would maintain the current Basel III rule's dual-requirement structure, whereby State Street and State Street Bank would be required to calculate their risk-based capital ratios under both the expanded risk-based approach and the existing standardized approach.

Servicing fees decreased 2% in Q2 2024 compared to Q2 2023, reflecting higher average equity market levels and net new business being offset by pricing headwinds, a client transition, and lower client activity.

Management fees increased 11% in both the three and six months ended June 30, 2024, compared to the same periods of 2023, as higher average market levels and net inflows from prior periods were partially offset by the impacts of a strategic ETF repricing initiative.

Foreign exchange trading services revenue increased 11% in the second quarter of 2024, compared to the same period of 2023, primarily due to higher client FX volumes, partially offset by lower spreads associated with subdued FX volatility.

Total headcount increased 23% as of June 30, 2024 compared to June 30, 2023, primarily reflecting the consolidation of two operations joint ventures in India.

Compensation and employee benefits expenses decreased 2% in the three months ended June 30, 2024, compared to the same period of 2023, mainly due to lower contractor spend associated with the joint venture consolidations in India and lower salaries, partially offset by higher incentive compensation and employee benefits costs.

Continued business investments and revenue-related costs were partially offset by productivity savings.

Information systems and communications expenses increased 12% and 8% in the three and six months ended June 30, 2024, respectively, compared to the same periods of 2023, reflecting higher technology and infrastructure investments.

Software and processing fees revenue decreased 3% in the three months ended June 30, 2024 compared to the same period of 2023, primarily driven by lower on-premises renewals in front office software and data.

State Street continues to develop and complete new products and services, including State Street Alpha.

On January 31, 2024, State Street issued 1.5 million depositary shares, each representing a 1/100th ownership interest in a share of fixed rate reset, non-cumulative perpetual preferred stock, Series I, without par value per share, with a liquidation preference of $100,000 per share.

On March 15, 2024, State Street redeemed an aggregate $1.0 billion, or all 7,500 outstanding shares, of its non-cumulative perpetual preferred stock, Series D and all 2,500 of the outstanding shares of its noncumulative perpetual preferred stock, Series F.

On July 24, 2024, State Street issued 850 thousand depositary shares, each representing a 1/100th ownership interest in a share of fixed rate reset, non-cumulative perpetual preferred stock, Series J, without par value per share, with a liquidation preference of $100,000 per share.

Our businesses may be adversely affected by increased and conflicting political and regulatory scrutiny of asset management stewardship and corporate sustainability or Environmental, Social and Governance (ESG) practices.

We have significant global operations and clients that can be adversely impacted by disruptions in key global economies, including local, regional and geopolitical developments affecting those economies.

Our investment securities portfolio, consolidated financial condition and consolidated results of operations could be adversely affected by changes in the financial markets, governmental action or monetary policy.

Our fee revenue represents a significant portion of our revenue and is subject to decline based on, among other factors, market and currency declines, investment activities and preferences of our clients and their business mix.