US – State Street Corp. has reported flat second-quarter earnings as expenses have risen by 8% to more than $1bn (€835m).
The Boston-based bank said net income for the period was $220m – the same as a year before, although it was down from the first quarter’s $226m. Total revenue was up 6% at $1.36bn.
Total expenses rose by $75m to $1.03bn, from $953m a year ago. This was partly due to a $26m charge for a subleasing agreement.
Assets under management at investment management arm State Street Global Advisors rose 12% to $1.4trn, with investment management fees up 13% at $173m.
Total assets under custody rose 5% to $9.6trn. Servicing fees were up 8% at $618m. It said: “The increase is attributable to new business from existing and new clients in 2005 and higher equity market valuations.”
Securities lending revenue gained 27% at $113m – “reflecting improved spreads and an increase in demand”.
The bank said “strong transition management business” drove an 8% increase in trading services revenue to $169m.
"We are pleased with the results of the quarter, which were driven by continued strong fee revenue growth in investment servicing and management,” said chairman and chief executive Ronald Logue.
He added: “We are also pleased with our progress in creating opportunities to more actively manage our balance sheet in the face of a challenging interest-rate environment."