State Street sees AUC/A increase after achieving $240bn investment servicing wins
19 October 2020 Boston
Image: denphumi/Adobe Stock
State Street’s Q3 results revealed investment servicing of assets under custody and/or administration (AUC/A) has increased by 11 percent from the same period last year to $36.6 trillion. Q3 2020 report.
The increase was primarily put down to higher period-end market levels, net new business growth, and client flows.
The Q3 figures showed that investment servicing mandates totalled $249 billion with approximately one-third of wins driven by State Street Alpha.
Quarter-end servicing assets remaining to be installed in future periods totalled $486 billion.
In addition, results revealed that Charles River Development (CRD) new bookings reached $17 million with a strong front-to-back State Street Alpha pipeline.
Investment management assets under management (AUM) as of quarter-end increased 7 percent to $3.1 trillion, mainly driven by higher period-end market levels and net inflows from exchange-traded funds, partially offset by institutional net outflows.
Revenue for servicing fees was up 2 percent compared to Q3 2019, which the Boston-based bank said was primarily driven by higher average market levels, net new business and client activity, partially offset by moderating pricing headwinds.
Servicing fees were up 2 percent compared to Q2 2020, largely due to higher average market levels, partially offset by lower client activity.
Further highlights from the Q3 report found foreign exchange trading services increased 4 percent compared to Q3 2019, reflecting higher client foreign exchange (FX) volume and volatility.
Meanwhile, securities finance decreased 28 percent compared to Q3 2019, primarily driven by lower balances and spreads, State Street revealed.
Securities finance decreased 9 percent compared to the previous quarter, which the bank explained was primary driven by lower agency reinvestment rates.
Ron O'Hanley, chairman and CEO of State Street, said: "These results reflect year-over-year growth in nearly all fee revenue lines and continued advancement of our strategy amid a difficult and complex operating environment. Despite the challenges, we achieved strong new business wins, maintained pricing discipline, and saw continued demand for Charles River Development and State Street Alpha, our front-to-back servicing platform, including the signing of a large new client.”
“Though persistent low rates depressed net interest income during the quarter, deposit levels remain strong, allowing us to lend more to our clients and reinvest in our investment portfolio. Furthermore, our laser focus on enhancing productivity and reducing expenses continues."
O'Hanley added: "I am proud of what we are accomplishing in support of our clients, our people, the financial markets and the communities where we live. I am confident that while we work our way through this challenging time, we are creating a strong foundation for growth and remain well positioned to return capital to shareholders."
The increase was primarily put down to higher period-end market levels, net new business growth, and client flows.
The Q3 figures showed that investment servicing mandates totalled $249 billion with approximately one-third of wins driven by State Street Alpha.
Quarter-end servicing assets remaining to be installed in future periods totalled $486 billion.
In addition, results revealed that Charles River Development (CRD) new bookings reached $17 million with a strong front-to-back State Street Alpha pipeline.
Investment management assets under management (AUM) as of quarter-end increased 7 percent to $3.1 trillion, mainly driven by higher period-end market levels and net inflows from exchange-traded funds, partially offset by institutional net outflows.
Revenue for servicing fees was up 2 percent compared to Q3 2019, which the Boston-based bank said was primarily driven by higher average market levels, net new business and client activity, partially offset by moderating pricing headwinds.
Servicing fees were up 2 percent compared to Q2 2020, largely due to higher average market levels, partially offset by lower client activity.
Further highlights from the Q3 report found foreign exchange trading services increased 4 percent compared to Q3 2019, reflecting higher client foreign exchange (FX) volume and volatility.
Meanwhile, securities finance decreased 28 percent compared to Q3 2019, primarily driven by lower balances and spreads, State Street revealed.
Securities finance decreased 9 percent compared to the previous quarter, which the bank explained was primary driven by lower agency reinvestment rates.
Ron O'Hanley, chairman and CEO of State Street, said: "These results reflect year-over-year growth in nearly all fee revenue lines and continued advancement of our strategy amid a difficult and complex operating environment. Despite the challenges, we achieved strong new business wins, maintained pricing discipline, and saw continued demand for Charles River Development and State Street Alpha, our front-to-back servicing platform, including the signing of a large new client.”
“Though persistent low rates depressed net interest income during the quarter, deposit levels remain strong, allowing us to lend more to our clients and reinvest in our investment portfolio. Furthermore, our laser focus on enhancing productivity and reducing expenses continues."
O'Hanley added: "I am proud of what we are accomplishing in support of our clients, our people, the financial markets and the communities where we live. I am confident that while we work our way through this challenging time, we are creating a strong foundation for growth and remain well positioned to return capital to shareholders."
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