Assets rise but profits fall at State Street

graph up downAssets under management at State Street Global Advisors, part of State Street bank, rose more than 9% year on year in the first quarter of 2014 to reach $2.4 trillion (€1.7 trillion).

However, State Street reported earnings per share that were a third lower than in the fourth quarter of 2013, a result the bank blamed on paying severance costs for staff reductions.

“We are responding to the challenges presented by low interest rates and conservative investor risk appetite by realigning our staffing to support our goal of positive operating leverage for the full year,” says Joseph L Hooley, State Street's chairman and chief executive.

The company recently said it would make 400 layoffs this year in a fourth round of job cuts that brings the total number of redundancies to nearly 3,000 since 2010.

State Street Global Advisors is among the world's largest asset managers, though it trails the largest, BlackRock, by some margin. BlackRock recently reported that its assets under management at the end of the first quarter were $4.4 trillion, an increase of 12% compared with the same quarter in 2013.

In its first-quarter statement, BlackRock said its earnings per share had increased more than 20% in a year.

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