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State Street’s “hard work” pays off in Q4

AUM riseState Street reported higher assets in both its custody and asset management business last week, with Ron O’Hanley, chief executive and chairman, saying performance was improving across the business.

Assets under custody reached $34.4 trillion (€31 trillion) at the end of 2019, up 9% from the end of 2018, while assets under management were a record $3.1 trillion, up 24%.

The firm – reporting its fourth quarter results on Friday - said the growth was partly down to higher market asset levels, but also client inflows, which included net inflows of $103 billion into the asset management business.

New investment servicing mandates announced in the final quarter of 2019 totalled $294 billion.

Total headcount was down by over 1,000 people, or 3% compared to the last quarter in 2018, primarily driven by “productivity savings”. State Street cited automation as a factor.

Over the full year, the firm reduced headcount by 3,400 in higher-cost locations, exceeding the original 2019 target of 1,500.

Total revenue for the end of the fourth quarter was $3,048 million, a year-on-year increase of 0.8%.

O’Hanley said: “We are pleased with these results and our improving performance which reflect hard work and better execution across the organisation.

“2019 began with significant industry challenges, including market weakness and increased pricing pressure. We acted aggressively to offset these headwinds, improve value to clients, stabilise revenues and reduce expenses.”

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