State Street Corp. (NYSE: STT) reported third-quarter earnings above analyst expectations on Thursday, as broad-based fee revenue growth supported strong results. However, shares declined around 3% in intra-day trading on Friday.
The Boston-based custody bank posted adjusted earnings per share of $2.78, beating the consensus estimate of $2.63. Total revenue rose 9% year-over-year to $3.55 billion, topping expectations of $3.46 billion. It marked the company’s seventh consecutive quarter of positive operating leverage.
Fee revenue climbed 8% to $2.83 billion, driven by increases across several business segments. Management fees rose 16% to $612 million, servicing fees increased 7.2% to $1.36 billion, and foreign exchange trading revenue grew 11.2% to $416 million. Securities finance revenue jumped 19% to $138 million.
Assets under custody and/or administration reached a record $51.7 trillion, up 10% from a year earlier, while assets under management climbed 15% to a record $5.4 trillion. Both were supported by higher market valuations and positive net inflows.
Net interest income slipped 1.1% year-over-year to $715 million, mainly due to lower short-term rates and changes in deposit mix, partly offset by continued loan growth and securities repricing.
