State Street CEO: 'All Engines Were Firing' During Second Quarter
27 July 2017 - 6:24AM
Dow Jones News
By Justin Baer
State Street Corp.'s second-quarter profits beat Wall Street's
estimates as rising interest rates and a market rally lifted
revenue.
State Street's shares jumped 2% in Wednesday afternoon trading
after the company posted nearly double-digit revenue growth and
raised expectations for full-year results.
"It was driven by revenue, which is nice," said Joseph Hooley,
State Street's chairman and chief executive, in an interview "All
engines were firing."
State's Street's net profit of $584 million was little changed
from $585 million a year earlier. But including certain pretax
gains, State Street earned $1.67 a share, exceeding the $1.57
per-share profit analysts expected.
Total revenue rose 9.2% to $2.8 billion.
Servicing and management fees rose along with trading revenue.
Net interest income -- or how the bank profits from the spread
between its borrowings and the portfolio of securities it holds --
also improved as the U.S. Federal Reserve moved to raise the
benchmark federal-funds rate.
Net interest income totaled $575 million, up 10.4% from a year
ago and 12.7% from the first quarter.
Rival Bank of New York Mellon Corp. said last week its net
interest revenue rose 4% sequentially, to $826 million. At Northern
Trust Corp., revenue on interest fell 7% from the same period.
The increase in net interest income offset what Mr. Hooley
called an "OK" quarter for State Street's money-management
business. Clients pulled $28 billion in net funds from that
division, State Street Global Advisors.
Higher asset prices pulled total assets under management up to
$2.6 trillion as compared with $2.56 trillion in March and $2.3
trillion in the year-ago period.
State Street on Wednesday lifted its full-year forecasts for
both fee revenue and net interest income. The company now expects
fees will rise 6% to 7% this year, compared with a previous target
of 4% to 6% growth, and said income from interest should be up by
as much as 13% in 2017.
Write to Justin Baer at justin.baer@wsj.com
(END) Dow Jones Newswires
July 26, 2017 16:09 ET (20:09 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
State Street (NYSE:STT)
Historical Stock Chart
From Apr 2024 to May 2024
State Street (NYSE:STT)
Historical Stock Chart
From May 2023 to May 2024