US - Investment services group State Street Corporation has reported a 10% increase in 2005 revenues up to $5.5bn(E4.54bn) from $5bn for the previous year.
The growth in the group’s non-US revenue was even faster, increasing by 17% and now represents 39% of total revenue.
Ron Logue, chairman and CEO said that the increase in non-domestic revenue was moving closer to the “our goal of 50% over several years”.
On the cost side, operating expenses in 2005 came to $4bn, an increase of 8% from $3.8bn in 2004 on a reported basis and up 9% from $3.7bn on an operating basis.
Commenting that the group achieved the financial goals it set for 2005, Logue pointed out that “earnings per share from continuing operations are up 14% from operating earnings in 2004, exceeding our outlook”.
Asset management arm, State Street Global Advisors’ total assets under management rose to $1.44 trillion at year-end, up 6% from $1.35trn at end 2004. Management fees for SSGA for 2005’s fourth quarter at $213m were 28% up on the levels of the final quarter of 2004.
The manager’s continued growth drew the comment from Logue that SSGA is “becoming a more meaningful contributor to State Street’s results”.
The group says that servicing fees in 2005 were 9% up on 2004 at $2.5bn; management fees increased 21% to $751m; trading services were up 17% to $694m and securities finance revenue rose 27%.
Processing fees and other revenue, however, decreased by 2% to $302m, while taxable equivalent net interest was up 5% to $949m.
On the expenses side, which were up 8% overall, salaries and employee benefits costs rose 14% to $2.2bn. The cost for information systems and communications fell 8% to $486m.
Looking ahead, Logue said: “We are setting 2006 financial goals of revenue growth of 8 to 12% and earnings per share growth of 10 to 15%. We expect the return on equity to be between 14 and 17%. Our 2006 target is to achieve approximately the middle of those ranges.”