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Key Takeaways
- State Street on Friday reported first-quarter revenue that exceeded forecasts as the financial institution made more on fees.
- Servicing, management, and software and processing fees all increased.
- The bank’s assets under custody/administration (AUC/A) and assets under management (AUM) both set record highs.
Shares of State Street (STT) rose in intraday trading Friday after the financial services provider posted better-than-expected revenue on higher fees.
The bank reported overall first-quarter revenue rose 1.2% to $3.14 billion, beating estimates. Fee revenue was up 3.7% to $2.42 billion. Earnings per share (EPS) of $1.37 was slightly below forecasts.
State Street’s assets under custody/administration (AUC/A) climbed 16.7% to $43.9 trillion, and assets under management (AUM) jumped 19.8% to $4.3 trillion. Both were record highs.
Fee revenues rose for servicing (+1%), management (+12%), and software and processing (+25%). They declined for currency trading (-3%) and securities finance (-12%).
Chief Executive Officer (CEO) Ron O’Hanley explained that the fee revenue growth “reflected robust performance across our Global Advisors and Front office solutions businesses, which, along with growth in Servicing fees, more than offset lower trading revenues as volatility remained muted.”
He added that the firm will “continue to focus on driving positive fee operating leverage through fee revenue growth.”
State Street shares were up 2.4% to $75.64 around 10:45 a.m. ET Friday but remain nearly 3% lower in 2024.