State Street has reported a significant rise in assets under management (AUM), spurring an increase in its management fees and resulting in a 1.6% lift in its share price. The firm caters to affluent clients, investment firms, and institutions, including governments. The end of the first quarter saw State Street’s AUM reach a record $4.3 trillion, a jump from $3.6 trillion the previous year.
Despite a quarterly rise of 1.2% in revenue to $3.14 billion, outperforming analyst predictions of $3.06 billion, as per LSEG data, the bank’s quarterly profits saw a 16% drop to $463 million. The decline equated to $1.37 per share and was primarily due to a rise in expenses by 6%, which incorporated a $130 million allocation to top up the Federal Deposit Insurance Corporation’s insurance fund.
Contrary to its overall growth, the bank’s net interest income for the quarter shrank by 6.5% to $716 million compared to the prior year. CEO Ron O’Hanley attested that the growth in fee revenues, achieving a strong performance across global advisors and front office solutions, managed to cover the reduced trading revenues, with market volatility subdued.