State Street profit misses on lower fee income; shares fall
Reuters
Published Apr 17, 2023 08:40AM ET
(Reuters) - State Street Corp (NYSE:STT) reported a first-quarter profit on Monday that missed analysts' estimates, hurt by a fall in fee income due to the recent U.S. banking crisis, sending the company's shares down 10% in premarket trading.
The collapse of two regional lenders in the United States last month shook investor confidence, raised liquidity concerns and triggered fears over deposit safety.
State Street, the world's largest custodian bank, saw its assets under custody or administration fall 10% to $37.6 trillion in the first quarter.
Cushioning the blow, the bank's net interest income rose 50% to $766 million helped by the U.S. Federal Reserve's aggressive interest rate hikes.
Along with a number of other large U.S. banks, State Street provided $1 billion of liquidity to First Republic Bank (NYSE:FRC) last month.
State Street set aside $44 million as provision for credit losses in the reported quarter as steep rate rises stoke fears of an economic slowdown.
The company reported a profit of $1.52 per share. Analysts had expected State Street to earn $1.64 per share, according to Refinitiv IBES data.
"We are optimistic about client onboardings and we expect revenue growth in the coming quarter," State Street Chief Executive Officer Ron O'Hanley said.
The company's total quarterly revenue rose 1% to $3.1 billion.
The Boston-based lender's shares were trading at $71.95 before the bell.
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Written By: Reuters
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