By Ben Fox Rubin
State Street Corp.'s (STT) first-quarter profit rose 9.1% as the
bank cut costs and saw its servicing fees revenue improve.
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
results have been pressured by historically low interest rates.
The bank continues to take a hard line on expenses despite
improving business trends. In January, it disclosed plans to cut
about 630 positions world-wide and take a $139 million
restructuring charge, actions it said would better align its
expenses with its business outlook for 2013.
State Street's cost-control measures have included withdrawing
from its fixed-income-trading initiative and making targeted staff
reductions. It is undergoing a multiyear effort to streamline
technology and reduce costs, anticipating $220 million of cost
savings this year as part of that program.
State Street reported a profit of $455 million, or 98 cents a
share, up from $417 million, or 85 cents a share, a year earlier.
Excluding certain items, earnings rose to 96 cents a share from 84
cents. Revenue was up about 1% to $2.44 billion.
Analysts polled by Thomson Reuters had most recently forecast
adjusted earnings of 93 cents a share on revenue of $2.48
billion.
On an operating basis, servicing fees revenue rose 9% to $1.18
billion. Trading-services revenue, which includes foreign-exchange
trading revenue and brokerage and other fees, edged up 0.4% to $281
million. Securities finance revenue sank 20% to $78 million.
Expenses edged down to $1.83 billion from $1.84 billion.
Total assets under management were $2.176 trillion, up 9.9% from
$1.98 trillion a year ago.
Shares closed Thursday at $56.51 and were inactive premarket.
The stock has risen 20% since the start of the year.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
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