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State Street 1Q net income up 9 percent

BOSTON (AP) -- State Street Corp. said Friday that its net income grew 9 percent in the first three months of the year, as a strong appetite for stocks helped drive the custody bank's fee revenue.

In addition to the equity markets, management credited higher volumes and increased volatility in foreign-exchange trading for boosting fee revenue.

State Street, which announced in January plans to cut 360 jobs, or about 2 percent of its worldwide workforce, also noted that it continued to work on controlling expenses in the latest quarter.

Expenses marginally declined, falling to $1.83 billion from $1.84 billion in the first quarter last year.

"Overall, the environment continues to show signs of gradual improvement as reflected by investors shifting into equities," said Joseph Hooley, State Street's chairman, president and chief executive. "However, given the ongoing fragile state of the global markets, we continue to remain cautious for 2013."

Like many other banks, State Street has been pressured by persistently low interest rates.

The company reported net income after paying preferred dividends of $455 million, or 98 cents per share, compared with net income of $417 million, or 85 cents per share, in the first quarter of last year.

Total revenue edged about 1 percent higher to $2.44 billion.

The results fell short of analysts' consensus forecast, which called for earnings of $1.10 per share and revenue of the $2.48 billion, according to FactSet.

State Street shares fell 34 cents to $56.17 in afternoon trading. The stock has gained about 19 percent so far this year.