BOSTON (Reuters) - State Street Corp said on Friday third-quarter net income was little changed as low equity values and interest rates hurt revenue, and said it plans to cut 600 jobs worldwide.
The Boston-based custody bank also plans to accelerate other cost-saving measures after declines in foreign markets during the quarter held back results.
On an operating basis State Street earned $1.16 per share, below average analyst expectations it would earn $1.23 per share according to Thomson Reuters I/B/E/S.
Shares in State Street were down 3.6 percent in morning trading to $66.74.
Edward Jones analyst James Shanahan wrote in a note to investors that rivals such as Bank of New York Mellon Corp have done better lately. “We were disappointed with today’s results, especially given stronger results reported earlier this week by State Street’s custody bank peers,” Shanahan wrote.
Speaking with analysts on a conference call after the results were announced, State Street executives said the company continues to return capital to investors through share repurchases and that it aims to save $500 million a year in expenses through changes like more integration of computer systems.
Chief Executive Joseph Hooley said on the call that while foreign market declines hurt the bank’s results, “I do believe that over the long term a relatively higher exposure to global equities in emerging markets will benefit us.”
For the three months ended Sept. 30 State Street reported net income of $543 million, or $1.32 per share, compared with net income of $542 million, or $1.26 a share, in the same period a year earlier.
The most recent quarterly results included $75 million of pre-tax severance costs, relating to its plans to cut about 600 workers worldwide by the end of 2016. The bank currently has 32,219 employees, and will partially offset the job cuts by hiring 400 new workers by the end of next year, a spokeswoman said.
Reporting by Ross Kerber; Editing by Bernadette Baum and Chizu Nomiyama