State Street Corp.'s (STT) third-quarter profit jumped 8.2% on
prior-year charges as the money manager recorded gains in the
latest period from investment securities.
The latest results, which were slightly better than expected,
further highlighted stabilization seen by the parent of State
Street Global Advisors, which raised capital to repay its
taxpayer-funded capital investment.
State Street reported earnings of $516 million, or $1.04 a
share, compared with $477 million, or $1.09 a share, a year
earlier. State Street had fewer shares outstanding in the year-ago
period. Excluding investment and other impats, earnings fell to
$1.05 from $1.24.
Revenue slid 11% to $2.27 billion as servicing fees declined
14%.
Analysts surveyed by Thomson Reuters expected per-share earnings
of $1.04 on revenue of $2.2 billion.
Unrealized mark-to-market losses at State Street's investment
portfolio dropped 37% from the previous quarter.
The company's tangible common equity ratio, which measures how
much of a bank's hard assets its common shareholders actually own,
was 5.73%, up from 4.96% in the prior quarter and 4.8% in the prior
year. In July, State Street projected the TCE ratio to be 6.5% by
the end of the year, up from its February view of 4.91%. The figure
shrunk to troubling levels last year when the firm was forced to
support some complicated off-balance-sheet businesses tied to the
credit markets, which froze amid the financial crisis.
Total assets under management grew 11% to $1.74 trillion from
the second quarter and jumped 2.9% from a year ago.
State Street's shares were down 0.8% to $51.86 in premarket
trading. The stock is up about a third this year.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com