State Street has just reported its fourth quarter results.

Fee revenue increased 2 percent reflecting higher servicing, management and software and processing fees, partially offset by lower FX trading services and securities finance revenue.

The increase in servicing fees primarily reflects higher average market levels and net new business, partially offset by fee pressure.

Net interest income (NII) decreased 9 percent primarily due to lower market rates and mix shift from non- interest bearing to interest-bearing deposits, partially offset by asset growth.

Compared to 3Q19, NII decreased 1 percent driven by the absence of episodic market-related benefits and lower market rates, partially offset by increased deposit balances.

Investments under custody or administration as of quarter-end increased 9 percent to $34.4 trillion, primarily due to higher end of period market levels and client flows, partially offset by a previously announced client transition.

In investment management, assets under management as of quarter-end increased 24 percent to a record $3.1 trillion primarily due to higher end of period market levels and net inflows of $103 billion in 2019.

New Business

Investment Servicing mandates announced in 4Q19 totaled $294 billion with quarter-end servicing assets remaining to be installed in future periods of $1.2 trillion.

Investment management net outflows in 4Q19 of $3 billion were driven by institutional and cash outflows, partially offset by ETF inflows.

Four front-to-back State Street Alpha platform wins for FY 2019 in multiple client segments and Charles River Development (CRD) new bookings, excluding affiliates, of $23 million and $37 million for 4Q19 and FY 2019, respectively.

• Total expenses were down 9 percent, primarily reflecting the impact of lower repositioning charges in 4Q19 as well as savings from resource discipline, process re-engineering and automation initiatives.

Excluding notable items, total expenses were down 2 percent compared to 4Q18 and flat to 3Q19.

4Q19 repositioning charge of $110 million to further drive process automation, information technology optimization and organization rationalization in 2020.

The expense savings programme announced in January 2019 achieved approximately $415 million total savings in the year through resource discipline, process re-engineering and automation benefits.

• Total headcount was down 3 percent, or over 1,000, compared to 4Q18, primarily driven by productivity savings.

4Q19 was the fourth sequential quarterly decline in total headcount, while strengthening client service through quality initiatives and automation.

Higher-cost location headcount reductions of 3,400 exceeded the original target of 1,500 for FY 2019.

Said Ron O'Hanley, Chairman and Chief Executive Officer: "We are pleased with these results and our improving performance which reflect hard work and better execution across the organization.

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

"As a result, we realized approximately $415 million in expense savings, enhanced client service through the establishment of our new coverage model and continued to build our front-to-back Alpha platform, which is producing results for our clients and for State Street.

"We were also able to deliver a total capital payout of 108 percent to our shareholders."

O'Hanley added: "Looking ahead, we will continue to drive innovation, automation and productivity to achieve our goal of becoming the very best provider to our clients.

"While we have made measurable progress towards our revenue and cost savings targets, we have more to do to improve margins and reach our medium-term goals by optimizing our technology infrastructure and client-centered revenue growth as key drivers.

"We are confident in the trajectory of our business and focused on continuing to improve our performance."

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State Street has just reported its fourth quarter results.

Fee revenue increased 2 percent reflecting higher servicing, management and software and processing fees, partially offset by lower FX trading services and securities finance revenue.

The increase in servicing fees primarily reflects higher average market levels and net new business, partially offset by fee pressure.

Net interest income (NII) decreased 9 percent primarily due to lower market rates and mix shift from non- interest bearing to interest-bearing deposits, partially offset by asset growth.

Compared to 3Q19, NII decreased 1 percent driven by the absence of episodic market-related benefits and lower market rates, partially offset by increased deposit balances.

Investments under custody or administration as of quarter-end increased 9 percent to $34.4 trillion, primarily due to higher end of period market levels and client flows, partially offset by a previously announced client transition.

In investment management, assets under management as of quarter-end increased 24 percent to a record $3.1 trillion primarily due to higher end of period market levels and net inflows of $103 billion in 2019.

New Business

Investment Servicing mandates announced in 4Q19 totaled $294 billion with quarter-end servicing assets remaining to be installed in future periods of $1.2 trillion.

Investment management net outflows in 4Q19 of $3 billion were driven by institutional and cash outflows, partially offset by ETF inflows.

Four front-to-back State Street Alpha platform wins for FY 2019 in multiple client segments and Charles River Development (CRD) new bookings, excluding affiliates, of $23 million and $37 million for 4Q19 and FY 2019, respectively.

• Total expenses were down 9 percent, primarily reflecting the impact of lower repositioning charges in 4Q19 as well as savings from resource discipline, process re-engineering and automation initiatives.

Excluding notable items, total expenses were down 2 percent compared to 4Q18 and flat to 3Q19.

4Q19 repositioning charge of $110 million to further drive process automation, information technology optimization and organization rationalization in 2020.

The expense savings programme announced in January 2019 achieved approximately $415 million total savings in the year through resource discipline, process re-engineering and automation benefits.

• Total headcount was down 3 percent, or over 1,000, compared to 4Q18, primarily driven by productivity savings.

4Q19 was the fourth sequential quarterly decline in total headcount, while strengthening client service through quality initiatives and automation.

Higher-cost location headcount reductions of 3,400 exceeded the original target of 1,500 for FY 2019.

Said Ron O'Hanley, Chairman and Chief Executive Officer: "We are pleased with these results and our improving performance which reflect hard work and better execution across the organization.

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

"As a result, we realized approximately $415 million in expense savings, enhanced client service through the establishment of our new coverage model and continued to build our front-to-back Alpha platform, which is producing results for our clients and for State Street.

"We were also able to deliver a total capital payout of 108 percent to our shareholders."

O'Hanley added: "Looking ahead, we will continue to drive innovation, automation and productivity to achieve our goal of becoming the very best provider to our clients.

"While we have made measurable progress towards our revenue and cost savings targets, we have more to do to improve margins and reach our medium-term goals by optimizing our technology infrastructure and client-centered revenue growth as key drivers.

"We are confident in the trajectory of our business and focused on continuing to improve our performance."