State Street Corp. (STT) rebounded from a year-earlier loss
caused by mortgage-backed securities as the institutional
money-management company this time reported stronger fees and
assets under management.
State Street had turned in lackluster results in the first
quarter as trading revenue dropped 10%. The decline came while some
big Wall Street banks posted frothy increases as investors returned
to stock and bond markets.
For the second quarter, State Street reported a profit of $432
million, or 87 cents a share, compared with a prior-year loss of
$3.31 billion, or $7.12 a share. The latest period included net
investment losses of $50 million and a $10 million provision for
loan losses related to its commercial real-estate holdings. The
prior year included $3.68 billion in losses related to
conduits--instruments used to buy asset-backed and mortgage-backed
securities.
Revenue increased 9% to $2.3 billion as total fee revenue jumped
12% and net interest revenue was up 13%.
The company earlier this month projected earnings of 93 cents,
excluding investment losses and other charges, above analysts views
at the time, on $2.2 billion in revenue.
Assets under management rose 15% to $1.782 trillion but fell
7.6% during the quarter amid the falling stock market.
Shares closed Monday at $37.35 and were inactive premarket. The
stock is down 23% this year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com