State Street Profit Declines
October 26 2016 - 9:01AM
Dow Jones News
By Austen Hufford
State Street Corp. said its quarterly profit declined on higher
costs and lower fee revenue, while its asset-management business
logged $36 billion in net outflows, excluding a recent
acquisition.
The Boston-based trust bank reported earnings of $507 million,
or $1.29 a share, down from $539 million, or $1.31 a share, a year
ago. On an operating basis, earnings rose to $1.35 a share from
$1.15. Revenue increased 0.2% to $2.62 billion.
Analysts polled by Thomson Reuters had expected $1.25 a share in
earnings on $2.72 billion in revenue.
Fees, which represent about 80% of the bank's top line, fell
1.1% to $2.08 billion. Lower assets, domestic and international
market declines and lower foreign exchange trading volumes cut into
fee revenue.
Expenses increased 1.1% from a year earlier to $1.98 billion, on
higher information technology and acquisition costs as compensation
and occupancy expenses fell.
In July State Street completed its $485 million acquisition of
General Electric Co.'s asset-management unit. Wednesday, State
Street said client retention rates were exceeding its
expectations.
Excluding that purchase, State Street had net outflows of $36
billion during the quarter of 2016, with net inflows of $12 billion
to exchange-traded funds being offset by outflows from cash and
institutional clients.
Assets under custody and administration increased 7% to $29.18
trillion and assets under management increased 11% to $2.45
trillion from a year ago.
State Street shares, up 22% in the past three months, were
inactive premarket.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
October 26, 2016 08:46 ET (12:46 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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