State Street Results Slide on Lower Fee Revenue

State Street Corp. reported a decline in earnings and revenue in the first quarter as weaker global markets dented the fees generated by the trust bank.

The Boston-based bank reported earnings of $319 million, or 79 cents a share, down from $373 million, or 89 cents a share, a year earlier. Excluding certain one-time items, per-share profit fell to 98 cents from $1.16.

Revenue declined 4.5% to $2.48 billion.

Analysts projected 90 cents in per-share earnings on $2.56 billion in revenue, according to Thomson Reuters.

Chief Executive Joseph Hooley said fee revenue was hurt by a challenging market environment, especially at the beginning of the year, but added he was encouraged by signs of stability in March.

Assets under custody and administration declined 5.4% to $26.94 trillion, and assets under management dropped 6% to $2.3 trillion from a year before.

Lower assets, the market decline and the stronger dollar also cut into fee revenue with servicing fees declining 2.1% and management fees falling 10% from a year earlier. Fees, which represent most of the bank's top line, slipped to $1.97 billion, down 4.1% from a year earlier and 3.6% sequentially.

In recent quarters State Street has focused on managing expenses. Late last year, the bank said it was accelerating its cost-cutting plan as it grappled with a challenging environment. It said Wednesday that layoffs and other measures announced in the third quarter are on track to result in about $100 million in cost savings this year.

Total expenses in the first quarter fell 2.2% from a year earlier to $2.05 billion.

State Street shares, up 20% in the last three months, were inactive premarket.

Write to Austen Hufford at [e-mail]

(END) Dow Jones Newswires

April 27, 2016 09:15 ET (13:15 GMT)

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