State Street posts record Q4 Global Advisors inflows, profit drops on charges
Jan 19 (Reuters) - State Street reported record net inflows of $103 billion in its Global Advisors unit in the fourth quarter, which also saw a jump in fees earned from managing client assets, sending shares of the custodian bank up 5% in premarket trading on Friday.
However, its profit in the quarter fell 71%, to $210 million or 55 cents per share, due to one-time charges, including $387 million to replenish the Federal Deposit Insurance Corporation's insurance fund. The collapse of two mid-sized lenders in early 2023 drained State Street of roughly $16 billion.
In a bright spot, assets under custody and management climbed 14%, to $41.8 trillion, against the backdrop of a strong rally in the equity capital markets that helped the S&P 500 trade at near-record highs. The benchmark index had closed the year with a roughly 24% gain.
State Street services and manages investments for high-net-worth clients that include governments, institutions and investment companies. The bank had $4.13 trillion in assets under management (AUM) at the quarter-end, up 19% from $3.48 trillion last year.
"In Global Advisors, we achieved our strongest quarter of total net inflows on record, with particular strength in both our ETFs and Cash franchises," CEO Ron O'Hanley said in a statement.
Last week, closest rival Bank of New York Mellon beat fourth-quarter profit estimates, helped by a surge in net interest revenue.
In line with broader industry trends, State Street's net interest income (NII) in the quarter declined 14%, to $678 million in the three months ended Dec. 31, compared to a year earlier.
It forecast an NII decline of about 10% in 2024, compared to 2023 levels. (Reporting by Manya Saini in Bengaluru; Editing by Pooja Desai)
