State Street Results Slide on Lower Fee Revenue
April 27 2016 - 09:30AM
Dow Jones News
State Street Corp. reported a decline in earnings and revenue in
the first quarter as weaker global markets dented the fees
generated by the trust bank.
The Boston-based bank reported earnings of $319 million, or 79
cents a share, down from $373 million, or 89 cents a share, a year
earlier. Excluding certain one-time items, per-share profit fell to
98 cents from $1.16.
Revenue declined 4.5% to $2.48 billion.
Analysts projected 90 cents in per-share earnings on $2.56
billion in revenue, according to Thomson Reuters.
Chief Executive Joseph Hooley said fee revenue was hurt by a
challenging market environment, especially at the beginning of the
year, but added he was encouraged by signs of stability in
March.
Assets under custody and administration declined 5.4% to $26.94
trillion, and assets under management dropped 6% to $2.3 trillion
from a year before.
Lower assets, the market decline and the stronger dollar also
cut into fee revenue with servicing fees declining 2.1% and
management fees falling 10% from a year earlier. Fees, which
represent most of the bank's top line, slipped to $1.97 billion,
down 4.1% from a year earlier and 3.6% sequentially.
In recent quarters State Street has focused on managing
expenses. Late last year, the bank said it was accelerating its
cost-cutting plan as it grappled with a challenging environment. It
said Wednesday that layoffs and other measures announced in the
third quarter are on track to result in about $100 million in cost
savings this year.
Total expenses in the first quarter fell 2.2% from a year
earlier to $2.05 billion.
State Street shares, up 20% in the last three months, were
inactive premarket.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
April 27, 2016 09:15 ET (13:15 GMT)
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