BOSTON (AP) — Weaker international markets dragged State Street Corp.'s second-quarter net income down by 4 percent.
The bank, which provides services to pension funds and other institutional investors, also said Tuesday that it's ramping up its regulatory compliance and risk management services for hedge funds with a $550 million deal for Goldman Sachs Group Inc.'s hedge fund administrative services business.
For the April-June quarter, State Street earned $480 million, or 98 cents per share, compared with $502 million, or $1 per share, a year ago.
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Excluding acquisition and litigation costs, a loss on Greek investments and other items, earnings were $1.01 per share. Analysts predicted earnings of 98 cents per share, according to a FactSet poll.
Revenue fell 3 percent to $2.42 billion from $2.49 billion as trading revenue and fees for services slumped. Revenue met Wall Street's expectations.
State Street CEO Joseph Hooley said the economic environment was "challenging," with "increasing weakness in international markets." The bank compensated by cutting employee compensation and controlling costs.
The long-running debt crisis in Europe and fears of economic growth slowing in Asia weighed on markets in the second quarter.
Trading services revenue dropped 18 percent to $255 million because of a decline in the currency trading unit and lower brokerage fees. Servicing fees fell 3 percent to $1.09 billion, due in part to the weaker euro.
State Street expects the Goldman acquisition to add to its earnings in the first full year of operation. The deal, which does not include the Goldman's prime brokerage business, will add a business that serves about 150 investment manager clients and administers about $200 billion. The unit's employees will join State Street when the deal closes, which the Boston company expects to happen early in the fourth quarter.
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