State Street seems to have abandoned its goal of retaining 90 per cent of the revenue of the Deutsche GSS acquisition. In a somewhat Delphic announcement on the first anniversary of the completion of the acquisition, the Boston-based bank says it is “retaining the available client revenue.”
Yet it is difficult to see what the bank is embarrassed about: in its annual results, State Street said that it had retained 88% of the Deutsche GSS client revenue. Falling 2 per cent short of the target is within acceptable margins of error. The bank added that it is “meeting, and in some cases exceeding, its major performance and financial goals associated with this strategic expansion.” These included operating the GSS business at a profit in 2003 (not including one time costs) and completing the majority of client conversions by mid-2004.
“The pace and excellence with which we have been able to integrate this business is a testament to our employees worldwide – including those who joined us during the acquisition,” says David A. Spina, chairman and chief executive officer of State Street. “We still have work to do in Europe, where client conversions are currently underway. However, it is already clear that we have realized the promise of this acquisition. We have expanded our market leadership across all of the client groups we serve including public funds, nonprofit entities, collective investments and pension funds. Today, State Street is stronger than ever before and dedicated to pursuing our proven strategy of focusing on the needs of institutional investors around the world.”