By Michael Calia
State Street Corp. said its profit rose 2.1% as growth in fee
revenue boosted its top line.
The bottom line exceeded analysts' expectations sending shares
about 4.5% higher in early trading.
"Despite the current challenges we face from low interest rates,
we have leveraged our strong market positions and capabilities to
generate profitable top-line growth," Chief Executive Joseph L.
Hooley said.
The Boston trust bank had been concerned about continued low
levels of interest rates and volatility, along with regulatory
compliance costs. Last month, State Street released stress test
data that indicated it would have weaker capital levels under a
potential economic downturn than it had estimated last year.
The company said Friday that its overall expenses rose 9.9% to
$1.89 billion year-over-year, while they grew 2.2% in comparison to
the previous period.
State Street posted earnings of $542 million, or $1.26 a share,
up from $531 million, or $1.17 a share, in the prior-year period.
On an operating basis, per-share earnings were $1.35, compared with
$1.19 a year earlier.
Revenue rose 6.2% to $2.58 billion, and operating revenue rose
8.5% to $2.68 billion.
Analysts had projected earnings of $1.21 a share and revenue of
$2.62 billion.
State Street said it had $2.42 trillion in assets under
management at the end of the most recent period, compared with
$2.24 trillion in the year-ago quarter. Assets under custody and
administration improved to $28.46 trillion from $26.03
trillion.
Servicing fees rose 7.5% to $1.3 billion, mainly because of
stronger global equity markets and new business. Management fees
increased more than 14% to $316 million, benefiting from new
business, higher fees and strength in equity markets.
Write to Michael Calia at michael.calia@wsj.com
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