US financial services firm State Street has recorded a 36% increase in net interest income (NII) during the third quarter of 2022 to $660m from $487m during the year-ago period.

The rise in NII was attributed to higher short-term interest rates from the US and international central bank rate hikes.

Total revenue saw a marginal decline of 1% year-on-year (YoY) from $2.99bn to $2.95bn during the quarter that ended on 30 September 2022.

Total fee revenues during the period under review fell 8.2% to $2.30bn. The fall was attributed to a decline in servicing fees and management fees.

Diluted earnings per share in Q3 2022 dropped by 8% to $1.8 from $1.91 during the year-ago period.

The total assets under custody and administration (AUC/A) at the end of the third quarter plummeted 17.7% YoY to $25.7 trillion.

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The decline was triggered by lower equity and fixed-income market levels, previously disclosed client transition and unfavourable currency translation.

It was partially offset by net new businesses.

The assets under management (AUM) were down 15.5% to $3.3 trillion, reflecting lower equity and fixed-income market levels and institutional net outflows that were partially offset by ETF and cash net inflows.

The third quarter of 2022 also saw the announcement of $233bn of investment servicing mandates.

In the next quarter, State Street intends to repurchase approximately $1bn of common stock.

State Street chairman and CEO Ron O’Hanley said: ” We delivered strong net interest income growth, which enabled us to partially offset fee revenue headwinds from significantly weaker equity and fixed income markets.

“Operating expenses were well-controlled, as we carefully manage inflationary pressures, and invest in our people and innovative solutions for our clients, resulting in a healthy pre-tax margin for the quarter.

“Our continued strong results generated excess capital, which we are committed to returning to our shareholders as evidenced by our intention to repurchase approximately $1bn of common stock in the fourth quarter of 2022. This plan for significant share repurchases, coupled with the recently announced 10% per share increase in our quarterly common stock dividend underscores our earnings strength.”