Boston
27 April 2017
Reporter: Stephanie Palmer

State Street reports double-digit custody and administration growth


State Street has seen a 10.7 percent increase in assets under administration and custody, ending Q1 2017 with just shy of $30 trillion.

In its Q1 results, State Street revealed assets under custody and administration of $29.83 trillion, up 10.7 percent on Q1 2016, which reach a total of $26.94 trillion.

This also represents a 3.7 percent on the bank’s Q4 2016 results, which reported assets under custody and administration of $28.77 trillion.

The total figure includes assets under custody of $22.51 trillion, marking an increase from $20.79 trillion in the same quarter last year, and from $21.73 trillion in Q4 2016.

According to Joseph Hooley, State Street’s chairman and CEO, these results reflect “stronger markets, improved client flows and the contribution of our new business wins over the past year, which benefited from our investments in solutions for clients’ most complex needs”.

Asset servicing fees also saw a slight increase, totalling $1.3 billion, up 4.3 percent on Q1 last year, which saw fees of $1.24 billion. This is also a marginal 0.5 percent increase on asset servicing fees recorded in Q4 2016, which totalled $1.29 billion.

State Street attributed the 4.3 percent increase primarily to higher global equity markets and net new business, however this was offset by hedge fund outflows and the negative effects of a stronger US dollar.

Securities finance revenues did not see the same success, however, reaching $133 million in Q1 2017, marking a very slight decrease of 0.7 percent compared to Q1 2016, which saw revenues of $134 million.

This is also a 2.2 percent decrease compared to $136 million in securities finance revenues taken in Q4 2016.

State Street attributed this slight decline to lower short interest in equity markets in Q1 2017.

The bank’s assets under management increased in Q1 2017, totalling $2.56 trillion at the end of the quarter, 11.5 percent more than the $2.3 trillion recorded at the same time in 2016.

This is also up 3.8 percent on Q4 2016, which closed with assets under management of $2.47 trillion.

Of the total assets under management at the end of Q1 2017, $1.56 trillion were equity products. Fixed-income assets made up $381 billion and cash assets made up $335 billion.

Multi-asset class solutions and alternative investments accounted for $132 billion and $154 billion, respectively.

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