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July 20, 2020updated 16 Oct 2020 3:33pm

State Street shows resilience amid Covid-19; net income surges 18%

State Street Q2 2020 net income surged 18% on a year-on-year basis, despite the impact of the Covid-19 crisis.

The firm’s net income in the three-month period ended 30 June 2020 was $694m, compared with $587m a year ago.

Total revenue rose 2% to $2.94bn from $2.87bn over Q2 2020 for State Street.

Fee revenue rose 5% to $2.38bn, mainly due to strong Charles River Development revenues.

Net interest income of $559m in Q2 2020 was 9% lower than the previous year. The fall was said to be driven by lower market rates.

Total expenses dropped 3% to $2.08bn from $2.15bn. This was attributed to the firm’s ongoing cost management efforts.

Total provision for credit losses increased $47m to $52m, due to COVID-19 driven changes in the firm’s economic outlook.

The firm’s assets under management were $3.05trn at the end of June 2020, up 5% from $2.92bn from a year ago. This was driven by net inflows from cash and ETFs.

Assets under custody and/or administration increased 2% to $33.52trn from $32.75trn.

State Street chairman and CEO Ron O’Hanley said: “Amid a very challenging operating environment, we achieved growth in servicing fees year-on-year, strong business wins, and continuing demand for Charles River Development solutions and our State Street Alpha front-to-back asset servicing platform.

“With volatility still heightened, foreign exchange trading services revenue also increased year-on-year.”

 

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