State Street Corp.'s (STT) third-quarter earnings jumped 65% as
the institutional money-management company benefited from strong
servicing-fee revenue growth and cost controls that resulted in a
12% decline in overhead costs.
Trust-and-custody banks have seen historically low interest
rates weigh on their results lately, though a rising stock market
has boosted assets under management. Rival Bank of New York Mellon
Corp. (BK) earlier Tuesday reported higher fee revenue and assets
under management.
Firms like State Street may benefit as corporate pension
managers search for less-risky returns. State Street in August was
one of two investment firms chosen by The Retiree Medical Benefits
Trust for the United Auto Workers union to handle $6 billion of its
investments--split evenly with BlackRock Inc. (BLK)
State Street reported a profit of $540 million, or $1.08 a
share, up from $327 million, or 66 cents a share, a year earlier.
Analysts polled by Thomson Reuters most recently forecast 83
cents
Assets under management rose 9.7% from a year earlier to $1.9
trillion and 6.8% during the quarter amid a surging stock
market.
Shares of State Street, which affirmed its 2010 earnings view,
closed Monday at $41.21 and were inactive premarket. The stock is
down 21% in the past year amid some lackluster results in recent
quarters.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com;