State Street reported a boost from asset servicing fees in the first quarter, as increased client activity and record foreign exchange trading revenues propelled its earnings.
The Boston-based global custodian recorded a 3% increase in asset servicing fee revenues to $1.3 billion driven by higher client activity and flows and new business, while foreign exchange trading revenues jumped nearly 64% to $459 million. Total fee revenue increased over 6% to nearly $2.4 billion.
State Street also announced investment servicing mandates totalled $171 billion by the end of the first quarter, with another $1.1. trillion of assets remaining to be installed in future periods.
However, assets under custody and administration (AUC/A) dropped 2% to $31.9 trillion due to lower equity market levels and a previously announced client transition.
“Compared to 4Q19, market valuations and client flows impacted servicing and management fees, offset by significant client activity, with heightened volatility levels driving strong fee revenue growth in our foreign exchange trading services business,” said Ron O’Hanley, chairman and CEO, State Street.
Meanwhile securities lending revenues continued their decline, dropping 22% to $92 million due to lower spreads and enhanced custody balance.
Earlier this week, BNY Mellon reported revenue increases across the board for the first quarter, as increased trading volumes sparked by the coronavirus pandemic drove fees.
Asset servicing revenues increased 8% in comparison to the first quarter last year to $1.5 billion driven by foreign exchange and other trading activity.
Meanwhile JP Morgan reported an increase of 6% in securities services revenues to $1.1 billion driven by balance and fee growth, and Citi’s securities services revenues lifted slightly by 1% to $645 million.