State Street has posted a net income available to common shareholders on a GAAP basis of $334m for the fourth quarter of 2017, a slump of 40% compared to $557m a year ago.
On a non-GAAP basis, the company’s net income available to common shareholders increased 19% to $687m from $577m in the fourth quarter of 2016.
The results included $133m in restructuring costs associated with Beacon, which is State Street’s multi-year transformation programme to digitally interconnect all of the company’s systems.
However, the firm also realised $150m in savings in 2017 through Beacon and expects $550m in savings by mid-2019 through the platform.
For the quarter ended 31 December 2017, the company’s revenue was $2.84bn, up 12% from $2.53bn a year ago.
Net interest income was $616m, a surge of 20% over $514m reported a year earlier. The firm’s return on average common equity stood at 6.9%, as against 12.1% a year ago.
State Street’s assets under management totalled $2.78 trillion at the end of December 2017, a 13% rise from $2.47 trillion in the year ago quarter. Assets under custody and administration increased 15% year-on-year to $33.12 trillion.
State Street chairman and CEO Joseph Hooley said: “Our strong fourth-quarter results included a 7% increase in servicing fees from the year-ago quarter. Excluding the impact related to the recent tax law changes, we achieved double-digit EPS growth as well as an increase in return on equity.
“We continue to benefit from our strong market position and our ability to deliver servicing solutions evidenced by the approximately $445 billion of new servicing commitments in the fourth quarter. Our business is well-positioned for growth in 2018 including the further advancement and benefits from Beacon. We now expect to realise Beacon’s financial objectives by the middle of 2019.
“We’ve maintained a strong capital position, enabling significant return of capital to shareholders. In 4Q17, we purchased approximately $350 million of our common stock and declared a quarterly common stock dividend of $0.42 per share.”