The scramble to cut costs at State Street continues as the custody bank seeks to make up for declining fees and add revenue-generating businesses.
Net income at the Boston company fell 14.5% year over year to $319 million in the first quarter. Total revenue fell 4.5% to $2.5 billion.
The results included an after-tax charge of $62 million, or 15 cents per share, due to the restructuring plan called State Street Beacon. The job-elimination program is projected to generate at least $100 million in yearly, pre-tax net run-rate cost savings this year.
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The custody bank's $485 million purchase of GE Asset Management is consistent with its plan to invest in higher-growth, higher-return business lines. But analysts say the deal won't move the needle enough to alleviate short-term pressure on top-line growth.
April 11 -
An improvement in fees collected for trust and investment services at Northern Trust contributed to an increase in first-quarter profit.
April 19 -
The world knows JPMorgan's quarterly profits fell and that it flunked the living wills test. But underneath all that were solid first-quarter results in its core lending businesses that bode well for other banks at the start of earnings season.
April 13
Assets under custody and administration fell 5.4% to $26.9 trillion, with mutual funds falling 4.9% to $6.7 trillion, pension products declining 9.5% to $5.2 trillion and insurance falling 6.3% to $8 trillion. Assets under management fell 6% to $2.3 trillion.
Fee revenue fell 4.1% to $2 billion on lower servicing and management fees and diminished foreign exchange trading. Net interest revenue fell 6.2% to $512 million.
Total expense fell 2.2% to $2.1 billion on a $43.2 million decline attributed to lower securities-processing costs, deposit insurance premiums and travel expenses.
During the quarter State Street agreed to acquire GE Asset Management to bolster its presence in equity and fixed-income management.
