State Street has revealed a 2 percent decrease in investment servicing assets under custody and/or administration totalling $31.9 trillion for Q1 2020.
According to State Street, the decrease was largely due to lower end of period equity market levels and a previously announced client transition, partially offset by higher end of period fixed income market levels.
Investment management assets under management also suffered a decrease of 4 percent to $2.7 trillion as of Q1 2020. State Street explained that this was mainly due to lower end of period equity market levels, partially offset by net inflows.
Further highlights from the report found that servicing fees revenue increased by 3 percent compared to Q1 2019, which the Boston-headquartered bank said was primarily driven by client activity and flows, higher average market levels, and net new business, partially offset by pricing headwinds.
Compared to Q4 2019, servicing fees were down 1 percent, which was largely due to lower average market levels and pricing headwinds, partially offset by higher client activity, according to the bank.
Elsewhere, securities finance dropped 22 percent compared to Q1 2019 driven by lower spreads and enhanced custody balances, according to State Street.
Year-on-year securities finance decreased 17 percent compared to Q4 2019 driven by lower spreads and balances.
State Street reported a total fee revenue increase by 6 percent year-on-year for its Q1 2020 earnings releases.
State Street noted that this was driven by higher than usual foreign trading services revenue of $459 million, up 64 percent year on year.
The report also showed that new investment servicing mandates announced in Q1 2020 totalled $171 billion, with quarter-end servicing assets remaining to be installed in future periods of $1.1 trillion.
Commenting on the report, Ron O'Hanley, chair and CEO of State Street, said: "The COVID-19 pandemic is an unprecedented challenge for the global economy. I am immensely proud of our employees for their outstanding performance on behalf of our clients while working under trying conditions. State Street operated effectively and responded quickly to help stabilise the financial markets and support our employees, clients and communities.”
In response to the COVID-19 pandemic, State Street provided liquidity to clients by facilitating more than 50 percent of Money Market Mutual Fund Liquidity Facility usage and providing administrative and custodial services to the Federal Reserve's Commercial Paper Funding Facility.
O'Hanley added: "While our Q1 results were somewhat impacted by the COVID-19 pandemic, our overall strong year-over-year performance reflects the strength, diversity and durability of our business model.”
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