:max_bytes(150000):strip_icc()/GettyImages-1928832411-fc213ead44a747a98ea7b227f161a6c4.jpg "State Street Stock Climbs as Assets Rise, Profit Beats Estimates")
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Key Takeaways
- State Street posted records for both assets under control/administration and assets under management. Its quarterly profit and sales beat estimates.
- The financial services firm reported higher interest income and fee revenue.
- State Street shares rose to their highest level in more than a year.
Shares of State Street (STT) rose after the financial services firm reported record-high numbers for two key measures of assets held and its results beat forecasts, aided by rising interest income and management fees.
The bank posted assets under custody/administration (AUC/A) of $44.31 trillion, and and assets under management (AUM) of $4.42 trillion, both record highs, in its latest quarterly release. (AUC and AUM essentially measure assets for which it does, and doesn’t, make allocation decisions, respectively.)
Earnings per share (EPS) came in at $2.15, with revenue higher by 2.6% to $3.19 billion. Both were above Visible Alpha’s consensus estimates.
Interest income was up 6.4% to $735 million, and fee revenue increased 1.5% to $2.46 billion, boosted by an 11% jump in management fees.
CEO Ron O’Hanley said that the company’s strong revenue growth and “well-controlled expenses” resulted in an 11.9% return on equity (ROE).
State Street raised its provision for credit losses to $145 million from $136 million a year earlier. The firm said that reflected “an increase in loan loss reserves associated with certain commercial real estate loans.”
State Street shares traded at their highest level in more than a year, rising some 3% in recent trading.
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