We are driving a combination of growth and returns by investing in the
future functionality of our products and services and expanding our
geographic reach, which is resulting in better outcomes for our clients.
Eric Aboaf
Vice Chairman and Chief Financial Officer
Markets and Financing at State Street encompasses the Global Markets and
Global Credit Finance businesses, which deliver industry-leading solutions
to institutional investors globally.
Markets and Financing spans foreign exchange (FX) trading and securities
finance solutions, and credit lending across many client types, including
corporations, insurance companies, and investment advisors. Our lending
products range from private credit lending and fund finance, to commercial
real estate lending and municipal finance. Through these business units, we
aim to be the premier global provider of liquidity, financing, research, and
credit for institutional clients.
ACHIEVING STRONG PERFORMANCE IN VOLATILE MARKETS
We have grown our Markets and Financing businesses by efficiently deploying
capital and investing in technology across our FX trading, securities
finance, and credit lending capabilities. Our Global Markets and Global
Credit Finance franchises are leading providers of value-added solutions
designed to enhance our clients' investment processes.
Global Markets recorded strong results, with FX trading services revenues
increasing 14 percent in 2022 compared to 2021, demonstrating the benefits
of our diversified business model. Once again, Global Markets earned
considerable industry recognition. In the 2022 Euromoney FX survey,
we were ranked No. 1 in Real Money Market Share and No. 1 Best Service for
Real Money clients (up from No. 2 in 2021), and our FX business ranked
fourth largest globally, across all client types.
Throughout the year, Global Markets provided clients with much-needed
liquidity across a number of our products, including the Direct, Indirect,
and StreetFX℠ trading solutions, GlobalLink, and our algorithmic
trading offerings. We expanded our FX trading capabilities with private
market clients, where we see significant growth opportunities, and our
industry-leading currency management solutions continued to garner strong
client demand in their 30th year of business.
Our securities lending businesses, Agency Lending and Enhanced Custody,
offer distinctive solutions. Our Agency Lending business ranks third
globally in terms of on-loan balances, underscoring our noteworthy supply
and distribution capabilities. Moreover, clients benefit from the ability to
borrow and lend with our principal arm, Enhanced Custody, creating
incremental utilization.
Similarly, our sponsored repo volumes (through the Fixed Income Clearing
Corporation) reached over $100 billion, benefiting from a rising interest
rate environment.
These products have served clients well over the past year and further
demonstrate our commitment in this space. Collectively, our aggregate
efforts in the financing space are aimed at advancing solutions for the buy
side.
We are providing innovative liquidity, financing, and research solutions
to investment professionals across the investment management process, on
a global scale.
Anthony Bisegna
Head of State Street Global Markets
Global Credit Finance performed well, increasing profitability and
generating strong return on capital. Our lending business is synergistic
with our overall custody core business and serves as yet another way to meet
client needs, thus generating value for shareholders.
We are a market leader in providing liquidity and financing to real money
funds, and continue to expand our presence in alternatives, including
private equity funds and business development companies. The steady growth
of our loan portfolio in 2022 helped us further gain recognition as a
leading global provider of financing, while our diversified capital call
financing remains a compelling financing offering in a world where bank
capital is in short supply. These offerings have helped enhance our core
alternatives servicing products, as well as attract fund administration
clients to State Street.
DRIVING BETTER CLIENT OUTCOMES WITH INNOVATIVE SOLUTIONS
We are focused on providing clients with specialized solutions and tools to
help them better serve their clients. In 2022, our Global Markets business
continued to innovate, expand our capabilities, and leverage technology to
increase productivity, including through our new peer-to-peer repo platform,
Venturi.
Venturi is a first-of-its-kind, peer-to-peer financing platform specifically
designed to connect buy-side firms with new sources of liquidity in the
global repo space. We believe Venturi will empower our clients to discover
new liquidity pools and make better, data-driven investment —
especially important in times of elevated market volatility and changing
environments for liquidity and rates.