State Street chief sees Brexit positives

State Street’s CEO sees UK referendum outcome as a positive for State Street in Q2 earnings call due to Luxembourg and Ireland potential.
By Conner Guidry
The CEO of State Street has said that thanks to its presence in Dublin and Luxembourg, State Street is going to be better off following the Britain’s decision to leave the European Union.

Joseph Hooley said in a 2016 Q2 earnings call: “We view the Brexit event to be neutral, if not positive, given that we have the most comprehensive set of services across the most markets in Europe.”

The CEO attributed the positive outlook to the offshore domiciles of Luxembourg and Dublin. Hooley claimed that when State Street acquired Deutsche Bank’s securities services business some years ago, it really catapulted it into leading positions in Germany and Ireland.

In terms of global growth and broad-based interest rates, Hooley did see Brexit as a negative, but because State Street’s European strategy and business driven by asset pools, Hooley saw the outcome as an advantage.

Hooley claimed that as the Eurozone sees increasing economic pressure savings rates will grow, which would also drive assets out of banks and into investment products.

Hooley said that as there are several European markets as opposed to the US single market, this makes the notion of being able to passport products across the Eurozone extremely valuable in the wake of Brexit.

Hooley finished off by stating that US firms are more competent in the offshore centers of Luxembourg and Dublin than the European providers would be, and State Street is at the top of that pyramid. “Nobody has as comprehensive a servicing capability as we do in Europe. Hence, the enthusiasm”.