State Street Corp. (STT) could make further acquisitions in Europe, President and Chief Executive Jay Hooley said Tuesday, as the custody bank and asset manager looks to tap into shifts in the way people in the region save for retirement.

At a briefing with journalists on the Boston-based company's ambitions in Europe, Hooley said he sees opportunities to buy custody businesses that might be sold by European banks seeking to raise capital, and to make select additions to State Street's investment arm along the lines of its EUR57 million purchase of Bank of Ireland Asset Management last month.

Despite a current macroeconomic picture that "isn't great," Hooley said Europe's move to employee-contribution retirement plans and more outsourcing by investment managers "are music to our ears" that should help State Street meet a goal to double its non-U.S. revenue in the next five years.

Non-U.S. revenue in 2009 was $2.88 billion, 36% of total revenue.

European acquisitions this year include Bank of Ireland Asset Management, adding EUR26 billion in assets to State Street Global Advisors; and the securities services business of Italy's Intesa Sanpaolo SpA (ISP.MI), for which it paid EUR1.28 billion to acquire EUR369 billion in assets under custody. Late last year, it agreed to buy Mourant International Finance Administration, an alternative fund administrator with $170 billion under administration at the time.

Hooley said operating margins in Europe are roughly the same to slightly better than in the U.S., but that the prospects for consolidation and changing savings and pensions landscape make it a "more exciting" opportunity than the U.S. right now.

Europe's pension programs are in the midst of a massive shift to defined contribution plans, where employees pay in, and away from defined benefit, or "final salary," plans where employees are promised retirement payouts based on their salary history and number of years with a company.

State Street's briefing came a day after the company was appointed administrator and custodian to the U.K.'s National Employment Savings Trust, a new government-backed program for workers with no retirement provision that is expected to grow to GBP100 billion within 30 years.

-By Margot Patrick, Dow Jones Newswires; +44 (0)20 7842 9451; margot.patrick@dowjones.com
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