State Street beats estimates on higher servicing fees
(Reuters) - State Street Corp (STT.N), the No. 2 global custody bank, reported a higher-than-expected quarterly profit as stronger equity markets and higher forex trading volumes boosted fees.
Net income rose to $445 million, or 98 cents per share, in the first quarter, from $417 million, or 85 cents per share, a year earlier.
On an operating basis, net income available to common shareholders rose to $443 million, or 96 cents per share, from $410 million, or 84 cents per share, a year earlier.
Analysts on average were expecting 93 cents per share on an adjusted basis, according to Thomson Reuters I/B/E/S.
"Overall, the environment continues to show signs of gradual improvement as reflected by investors shifting into equities. However, given the ongoing fragile state of the global markets, we continue to remain cautious for 2013," Chief Executive Officer Joseph Hooley said in a statement.
Total revenue rose 1 percent to $2.44 billion, while servicing fees rose 9 percent to $1.18 billion.
State Street's assets under management rose about 10 percent to $2.18 trillion from year-earlier levels. Expenses slipped marginally to $1.83 billion from $1.84 billion a year earlier.
Custody banks lend stocks, track mutual fund prices and collect and distribute dividend and interest payments for investors.
State Street shares closed at $56.51 on Thursday on the New York Stock Exchange.
(Reporting by Tanya Agrawal in Bangalore; Editing by Supriya Kurane)
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