State Street profit beats estimates as fee income, assets under management rise

(Reuters) – State Street beat analysts’ estimates for third-quarter profit on Wednesday, helped by a rise in fee income and assets under management at the custodian bank.

Global equity markets have rebounded this year after a downbeat 2022, helping boost the value of investments at banks and asset managers.

Peer Bank of New York Mellon Corp also surpassed estimates for quarterly profit on Tuesday benefiting from higher income from loans.

State Street shares, down about 13% this year as of last close, rose 3.8% in morning trading after the results.

The bank’s assets under custody or administration rose 12% to $40.0 trillion, primarily reflecting higher market values of holdings and increased client inflows, while investment assets under management rose 13% from last year.

Total fee income rose 2.7% to $2.36 billion from a year earlier.

Adjusted profit came in at $1.93 per share for the three months ended in Sept. 30, beating analysts’ average estimate of $1.81 per share, according to LSEG data.

“We intend to continue to execute on our common share repurchase authorization of up to $4.5 billion during 2023, subject to market conditions and other factors,” CEO Ron O’Hanley said in a statement.

The bank saw a 5.5% decrease in its net interest income (NII), in contrast with BNY Mellon which saw a 10% increase NII.

Net income fell 39% to $422 million in the third quarter, from a year earlier, while total revenue fell 9% to $2.69 billion.

(Reporting by Pritam Biswas in Bengaluru; Editing by Vinay Dwivedi)