ANEMIC GROWTH: Investors Bail on State Street Stock

Posted on 04/16/2021

State Street Corporation (ticker: STT) released its first quarter earnings. The stock dropped mid-day to US$ 80.91 per share, a 6.47% drop. State Street is seeing growth in its lower margin ETF business vs. traditional asset management. The 34% annual increase in AUM from the first quarter of 2020 to 1Q 2021, is reflecting higher period-end market levels and net inflows from ETFs and cash, partially offset by institutional net outflows.

Revenue for the first quarter of 2021 was US$ 2.95 billion vs. US$ 3.065 billion in the first quarter of 2020. State Street has witnesses revenue decreases in its foreign exchange trading services, while seeing gains in software and processing fee revenue. Expenses for the bank increased for the first quarter of 2021 to US$ 2.332 billion vs. US$ 2.255 billion in the first quarter of 2020. In the first quarter of 2020, State Street experienced an outflow of US$ 240 billion of AUM in long term funds.

State Street is banking on its CRD – Charles River Development acquisition to boost revenues.

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