State Street Global Advisors, the second-largest ETF provider, posted a 14.8 percent rise in fourth-quarter net income in what the firm framed as a continued focus on servicing clients and returning capital to shareholders.
The Boston-based asset management firm earned $521 million in the fourth quarter, or $1.11 per common share, compared with $454 million, or $0.93 per share, in the same year-earlier quarter. State Street’s total revenue rose 7 percent in 2012 to $2.46 billion, with its total assets under management rising 2.7 percent to $2.089 trillion.
ETF assets climbed more quickly than AUM in general—by 24 percent, hitting $340 billion at the end of the fourth quarter, a figure that includes the SPDR Gold Fund (GLD). State Street isn’t the investment manager of that ETF, but acts as distribution agent.
“We achieved these results in a constrained revenue environment, generating positive operating leverage and continuing to invest in key markets that position us for further growth,” State Street’s Chairman and Chief Executive Officer Joseph Hooley said in a press release detailing the firm’s results.
“While equity markets improved in the fourth quarter, our clients remained cautious for most of the quarter given the uncertainty surrounding the global economic environment and the U.S. fiscal cliff,” Hooley added. “As we look ahead, we are encouraged by the recent market strength and early signs of client re-risking.”
State Street also announced today a “separate reduction in force to align our expenses with our business outlook for 2013.” Bloomberg News said the job cuts will total 630, or 2 percent of its workforce.
The firm also noted that the acquisition of the Goldman Sachs Administration Services, completed on Oct. 15, 2012, contributed $24 million to revenues and $13 million to expenses.
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