State Street reported asset servicing and asset management fee revenue growth for the full-year 2013, up 10% from full-year 2012.
Fourth quarter earnings per common share (EPS) of $1.22 increased from $1.17 in the third quarter of 2013 and from $1.00 in the fourth quarter of 2012. EPS for the fourth quarter of 2013 reflected the impact of an out-of-period income tax benefit of $71 million, or $0.16 per share, associated with the completion of a multi-year data enhancement process related to State Street’s deferred income tax accounts.
Net income available to common shareholders of $545 million increased from $531 million in the third quarter of 2013 and from $468 million in the fourth quarter of 2012.
Revenue of $2.46 billion increased from $2.43 billion in the third quarter of 2013 and from $2.45 billion in the fourth quarter of 2012.
Net interest revenue of $585 million increased from $546 million in the third quarter of 2013 and decreased from $622 million in the fourth quarter of 2012.
2013 revenue increased 2.4% to $9.88 billion from $9.65 billion in 2012.
New asset servicing mandates during the fourth quarter of 2013 totaled $392 billion and net new assets to be managed were $5 billion.
State Street’s Business Operations and Information Technology Transformation program achieved incremental pre-tax expense savings of approximately $220 million in 2013, resulting in total pre-tax expense savings of approximately $420 million since the program’s inception in 2010 through the end of 2013.
Reporting its operating basis revenue on a non-GAAP basis revenue, State Street says servicing fees of $1.23 billion in the fourth quarter of 2013 increased 1.7% and 7.1% from the third quarter of 2013 and fourth quarter of 2012, respectively. The increase in both periods was primarily due to stronger global equity markets and net new business, says State Street.
Foreign-exchange trading revenue decreased 15% from the third quarter of 2013 primarily due to lower volatility. Compared to the fourth quarter of 2012, foreign exchange trading revenue increased 5.9% due to higher volumes and volatility. Brokerage and other fees decreased 5.5% from the third quarter of 2013 to $103 million, primarily due to lower transition management revenue. Compared to the fourth quarter of 2012, brokerage and other fees decreased 17.6% primarily due to a decrease in distribution fees associated with the SPDR® Gold ETF.
Securities finance revenue of $76 million in the fourth quarter of 2013 increased 2.7% from the third quarter of 2013 and fourth quarter of 2012, respectively.
Jay Hooley, State Street’s chairman, president and chief executive officer, said: 2013 was a very good year for State Street despite both the ongoing headwinds created by the low rate environment and the increasing regulatory cost and complexity. Importantly, for the full year, we grew our core asset servicing and asset management fees by almost 10% compared to 2012.”
Hooley added: “Our results for 2013 also demonstrated our commitment to controlling expenses which enabled us to achieve 171 basis points of positive operating leverage for full-year 2013 compared to full-year 2012. Our Business Operations and IT Transformation program continues to deliver expected improved efficiencies and enhanced client solutions.”
State Street Grows Asset Servicing and Asset Management Fee Revenue by 10% in 2013
State Street reported asset servicing and asset management fee revenue growth for the full-year 2013, up 10% from full-year 2012.
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