State Street's Top and Bottom Lines Fall on Challenging Equity Markets
January 27 2016 - 8:13AM
Dow Jones News
By Lisa Beilfuss
State Street Corp. reported a decline in fourth quarter revenue
as weaker global equity markets dented the fees generated by the
trust bank.
The New York-based bank reported earnings of $547 million, or
$1.34 a share, up from $469 million, or $1.11 a share, a year
earlier. Excluding certain one-time items, per-share profit fell to
$1.21 from $1.36.
Revenue declined 4.8% to $2.59 billion. Analysts projected $1.18
in per-share earnings on $2.64 billion in revenue, according to
Thomson Reuters.
Chief Executive Joseph Hooley said the bank's performance during
the fourth quarter reflected challenging global equity markets,
particularly in emerging markets.
Declines across global equity markets, which have extended into
the new year, drove down the bank's assets, with assets under
custody and administration slipping 2.4% to $27.51 trillion and
assets under management dropping 8.3% to $2.25 trillion. Fellow
trust banks Bank of New York Mellon Corp. and Northern Trust Corp.
similarly reported drops in assets under management during the
fourth quarter.
Lower assets, coupled with more cautious risk sentiment, cut
into fee revenue. Fees, which represent most of the bank's top
line, slipped 0.3% from a year earlier and 2.8% sequentially.
In light of the pressure on revenue, Mr. Hooley said State
Street has focused on managing expenses. Late last year, State
Street said it was accelerating its cost-cutting plan as it
grappled with a challenging environment. The bank said Wednesday
that layoffs and other measures announced in the third quarter
would result in about $550 million in cost savings by 2020, up from
an earlier target of $500 million.
Total expenses in the fourth quarter fell 9.7% from a year
earlier and 5.4% sequentially, to $1.86 billion.
State Street shares, down 17% since the start of the year, were
inactive premarket.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
January 27, 2016 07:58 ET (12:58 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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