State Street Corp.'s (STT) fourth-quarter earnings rose 23% as
higher servicing fees helped to offset lower trading-services and
securities finance revenue.
State Street is one of the country's largest trust banks, acting
as a custodian for investment firms' securities and handling other
back-office duties. As with many financial firms, the company's top
and bottom lines have been pressured by historically low interest
rates and declining trading volumes.
State Street also disclosed plans to cut about 630 positions
worldwide, which it said would better align its expenses with its
business outlook for 2013. The company had 29,740 employees at the
end of 2011.
State Street has taken cost-control measures, such as
withdrawing from its fixed-income-trading initiative and making
targeted staff reductions. It also bought Goldman Sachs Group
Inc.'s (GS) hedge-fund administration business for $550 million in
October, a deal that makes State Street the biggest manager of
behind-the-scenes activities for hedge funds, such as tax reporting
and accounting.
State Street reported a profit of $470 million, or $1 a share,
up from $381 million, or 76 cents a share, a year earlier.
Excluding items such as litigation, acquisition and restructuring
costs, adjusted earnings rose to $1.11 a share from 93 cents.
Revenue jumped 5.8% to $2.45 billion.
Analysts polled by Thomson Reuters had most recently forecast
earnings of $1 a share on revenue of $2.36 billion.
Servicing fees rose 8.8% to $1.15 billion.
Trading-services revenue, which includes foreign-exchange
trading revenue and brokerage and other fees, declined 11% to $243
million. Securities finance revenue dropped 18% to $74 million.
Total assets under management as of Dec. 31 were $24.371
trillion, up 12% from $21.807 trillion a year ago.
Shares closed Thursday at $50.38 and were inactive premarket.
The stock has gained 26% over the past 12 months.
Write to Melodie Warner at melodie.warner@dowjones.com.
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