First-quarter profits at State Street got a big boost from new agreements to service more than $100 billion of assets.
Profit at the $237 billion-asset company rose 40% year over year to $446 million. Earnings per share of $1.15 were a nickel better than the average estimate of analysts compiled by FactSet Research Systems.
Assets under custody and administration rose 11% to $29.8 trillion, including the $110 billion of new asset-servicing business won in the quarter. Meanwhile, assets under management increased 11% to $2.6 trillion.
The sharp increase in assets under custody and administration “reflect[ed] stronger markets, improved client flows and the contribution of new business wins over the past year,” Chairman and CEO Joseph Hooley said in a news release Wednesday.
Fee revenue rose 12% to $2.2 billion. Servicing fees rose 4% to $1.3 billion due to the new agreements.
Management fees rose 42% to $382 million because of $71 million obtained through the GE Asset Management acquisition, as well as higher global equity markets.
Processing fees more than doubled to $112 million on a $30 million gain from the sale of State Street’s stake in the Boston Financial Data Services joint venture to DST Systems in Kansas City, Mo.
Net interest income was little changed at $510 million as higher interest rates were offset by lower-interest earning assets.
Noninterest expense rose 2% to $2.1 billion on higher compensation and employee benefits.