Asset servicing is State Street’s golden egg for Q3
18 October 2012 Massachusetts
Image: Shutterstock
State Street released its 3Q 2012 results, which revealed decreased revenue, but $211 billion in new asset servicing mandates.
Revenue of $2.36 billion fell 3 percent from $2.42 billion seen in the second quarter, and net interest revenue, of $619 million, decreased 8 percent from $672 million in the second quarter of 2012, and increased 7 percent from $578 million in the third quarter of 2011.
GAAP results included a net post-tax benefit of $166 million, composed of a $362 million benefit related to claims associated with the 2008 Lehman Brothers bankruptcy; partially offset by a $60 million provision for previously disclosed litigation arising out of asset management and securities lending businesses.
As well as seeing $211 billion in new mandates, $78 billion of net new assets has been gained to be managed by State Street Global Advisors (SSgA).
A further coup for the firm was the completed acquisition of Goldman Sachs Administration Services, cementing State Street as a major player in hedge fund administration.
Joseph Hooley, State Street's chairman, president and chief executive officer, said that the results reflected continued resilience across both asset servicing and asset management, which was partially offset by weakness in trading services.
"Although equity markets have improved, clients remain conservative in their investment allocations which adversely affects our revenue. We continue to see demand for our solutions as evidenced by new asset servicing wins, and net new assets of $78 billion to be managed by State Street Global Advisors and a strong pipeline."
"We look forward to integrating the recently closed acquisition of the Goldman Sachs Administration Services business and introducing these clients to our broad range of products and services. While acquisitions are consistent with our long-term growth strategy, one of our highest priorities in the current environment is returning capital to our shareholders."
Revenue of $2.36 billion fell 3 percent from $2.42 billion seen in the second quarter, and net interest revenue, of $619 million, decreased 8 percent from $672 million in the second quarter of 2012, and increased 7 percent from $578 million in the third quarter of 2011.
GAAP results included a net post-tax benefit of $166 million, composed of a $362 million benefit related to claims associated with the 2008 Lehman Brothers bankruptcy; partially offset by a $60 million provision for previously disclosed litigation arising out of asset management and securities lending businesses.
As well as seeing $211 billion in new mandates, $78 billion of net new assets has been gained to be managed by State Street Global Advisors (SSgA).
A further coup for the firm was the completed acquisition of Goldman Sachs Administration Services, cementing State Street as a major player in hedge fund administration.
Joseph Hooley, State Street's chairman, president and chief executive officer, said that the results reflected continued resilience across both asset servicing and asset management, which was partially offset by weakness in trading services.
"Although equity markets have improved, clients remain conservative in their investment allocations which adversely affects our revenue. We continue to see demand for our solutions as evidenced by new asset servicing wins, and net new assets of $78 billion to be managed by State Street Global Advisors and a strong pipeline."
"We look forward to integrating the recently closed acquisition of the Goldman Sachs Administration Services business and introducing these clients to our broad range of products and services. While acquisitions are consistent with our long-term growth strategy, one of our highest priorities in the current environment is returning capital to our shareholders."
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