STT State Street Corporation

By Lisa Beilfuss 

State Street Corp. on Friday said it would slash jobs as choppy markets bite into the trust bank's bottom line.

Third-quarter results, wherein profit was flat and assets fell, reflect the decline in equity valuations globally, particularly in emerging economies, combined with prolonged low interest rates and a strong U.S. dollar, said Chief Executive Joseph Hooley.

Rattled by renewed concerns about the economy's health, markets turned volatile during the third quarter. Earlier this weak, fellow trust bank Bank of New York Mellon similarly pointed to unfavorable market conditions for its third-quarter profit decline, and several large money managers said they were bruised by market declines and investor outflows.

"In light of the continued challenging environment," Mr. Hooley said, State Street is accelerating its cost-cutting plan. During the quarter, the firm took a $75 million severance charge stemming from layoffs, and State Street said it plans to cut between 200 to 600 jobs globally. The company expects to save $50 million after the layoffs are completed by the end of next year.

For the period, State Street reported a profit of $543 million, little changed from a year earlier. Per-share earnings were $1.32 versus $1.26. On an operating basis, which excludes severance costs and a real-estate gain, among other items, earnings per share dropped to $1.16 from $1.35. Revenue inched up to $2.62 billion from $2.61 billion. Operating revenue, meanwhile, was $2.65 billion.

Analysts projected $1.23 in operating earnings per share on $2.67 billion in operating revenue, according to Thomson Reuters.

Assets under custody and administration declined 4.2% to $27.27 trillion while assets under management dropped 9% to $2.20 trillion. Fee revenue rose 4.8% to $2.11 billion.

Shares in the bank, down about 12% this year, were inactive premarket.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

(END) Dow Jones Newswires

October 23, 2015 08:06 ET (12:06 GMT)

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