US – State Street Corp.’s fourth-quarter total fee revenue fell slightly to 706 million dollars, from 709 million dollars in the same period in 2001 – as the company announced a 500 million dollar share issue that will help fund its acquisition of Deutsche Bank’s custody unit.

State Street’s fee revenues are broken down by category: servicing, management, brokerage, foreign exchange and processing. Servicing fees – which include custody, accounting, administration and securities lending, among other activities, rose to 427 million dollars, from 421 million dollars. Investment management fees, delivered via State Street Global Investors, declined to 126 million dollars from 129 million dollars.

It posted a net income of 477 million dollars in the quarter. But the figure was boosted by the sale of its corporate trust unit. Excluding that gain of 296 million dollars it would have earned 181 million dollars, which was in line with analysts’ expectations. It earned 171 million dollars in the 2001 quarter.

Overall its revenues were 1.5 billion dollars – which includes the 495 million dollar corporate trust gain, compared to 998 million dollars in the fourth quarter of 2001.

Assets under custody and assets under management also fell in the fourth quarter. It had 6.17 trillion dollars in assets under custody as at December 31 2002, down from 6.20 trillion a year earlier. Assets under management declined to 763 billion from 775 billion dollars.

Chief executive David Spina said: “This was a year of outstanding accomplishment for State Street, achieved in a very challenging environment. We won important new business mandates, continued to strengthen out client relationships and expanded our product range.”

He said the company’s decision to buy Deutsche Bank’s Global Securities Services business “was a defining moment for our company”. He added the deal is to close soon and the integration team is working to ensure a successful transition.