State Street's securities finance revenue trumps Q1 2014's
27 April 2015 Boston
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State Street earned $101 million in securities finance revenue during Q1 2015, down on the previous quarter but up significantly on Q1 2014.
The bank’s securities finance revenue was down 4.7 percent on Q4 2014, primarily due to lower spreads, but was 18.8 percent higher than Q1 2014, thanks to new business from enhanced custody, its principal securities lending service for custody clients, and higher volumes.
New asset servicing mandates during Q1 2015 totalled $214 billion.
Servicing fees during Q1 2015 decreased 2.2 percent from Q4 2014, falling to $1.27 billion. State Street attributed the slight decline to the impact of the stronger US dollar, but fees were 2.8 percent higher than those earned in Q1 2014.
Joseph Hooley, chairman and CEO of State Street, said: “We are pleased with our first-quarter 2015 results, which reflect strong fee revenue growth compared to the first quarter of 2014, continued momentum of our core business, and our focus on managing expenses. We continue to benefit from our strong market position and client demand for our servicing solutions remains robust as evidenced by $214 billion of new servicing commitments.”
“Our fee revenue growth in the first quarter was supported by strong foreign exchange trading activity. The divergence in interest rate expectations for the US relative to most other major economies and the actions taken by several central banks around the world to increase their quantitative easing has contributed to an increase in volatility and volumes of foreign exchange trading.”
“The strengthening of the US dollar during the quarter reduced our fee revenue outside of the US, but the parallel reduction in expenses largely offset this impact on our bottom line.”
The bank’s securities finance revenue was down 4.7 percent on Q4 2014, primarily due to lower spreads, but was 18.8 percent higher than Q1 2014, thanks to new business from enhanced custody, its principal securities lending service for custody clients, and higher volumes.
New asset servicing mandates during Q1 2015 totalled $214 billion.
Servicing fees during Q1 2015 decreased 2.2 percent from Q4 2014, falling to $1.27 billion. State Street attributed the slight decline to the impact of the stronger US dollar, but fees were 2.8 percent higher than those earned in Q1 2014.
Joseph Hooley, chairman and CEO of State Street, said: “We are pleased with our first-quarter 2015 results, which reflect strong fee revenue growth compared to the first quarter of 2014, continued momentum of our core business, and our focus on managing expenses. We continue to benefit from our strong market position and client demand for our servicing solutions remains robust as evidenced by $214 billion of new servicing commitments.”
“Our fee revenue growth in the first quarter was supported by strong foreign exchange trading activity. The divergence in interest rate expectations for the US relative to most other major economies and the actions taken by several central banks around the world to increase their quantitative easing has contributed to an increase in volatility and volumes of foreign exchange trading.”
“The strengthening of the US dollar during the quarter reduced our fee revenue outside of the US, but the parallel reduction in expenses largely offset this impact on our bottom line.”
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