State Street profit beats Street; compensation costs fall
BOSTON (Reuters) - State Street Corp's (STT.N) second-quarter profit rose 19 percent, beating Wall Street estimates, as compensation costs fell and revenue increased from managing money, servicing client assets and trading foreign currencies.
The Boston-based bank said on Friday it earned $571 million, or $1.24 a share, compared with $480 million, or 98 cents a share, a year earlier. Analysts, on average, expected $1.19 a share, according to Thomson Reuters I/B/E/S.
Revenue from foreign exchange surged 33 percent to $171 million as the Boston-based bank took advantage of more volume and volatility in global currency markets. Investment management fees rose 13 percent to $277 million.
Servicing fees, which provide the lion's share of revenue, rose 11 percent to $1.2 billion.
Total operating revenue was $2.58 billion, up 4.9 percent.
The bank cut compensation costs by 11 percent compared with the first quarter. Those expenses have been a bone of contention among some large State Street investors, who have complained about them being too high compared to peer banks.
Compensation and employee benefit expenses were $917 million in the quarter, down from $1.04 billion in the first quarter and 3 percent lower than the second quarter of 2012.
(Corrects year-ago profit figure and percent change)
(Reporting By Tim McLaughlin; Editing by Gerald E. McCormick and John Wallace)