The tone of the recent first quarter 2020 results statement issued by State Street was more sombre than usual, being overshadowed by coronavirus considerations.

Ron O'Hanley, Chairman and Chief Executive Officer, said: "The COVID-19 pandemic is an unprecedented challenge for the global economy. I am immensely proud of our employees for their outstanding performance on behalf of our clients while working under trying conditions.

"State Street operated effectively and responded quickly to help stabilize the financial markets and support our employees, clients and communities.

"Our operational resilience, experience, and business continuity plans, as well as our strong balance sheet and associated capital and liquidity positions, helped prepare us for these extraordinary times and have positioned us to confidently navigate volatile market conditions, serve our clients, and efficiently execute against our strategy.

"While our first quarter results were somewhat impacted by the COVID-19 pandemic, our overall strong year-over-year performance reflects the strength, diversity and durability of our business model.

"Compared to 4Q19, market valuations and client flows impacted servicing and management fees, offset by significant client activity, with heightened volatility levels driving strong fee revenue growth in our foreign exchange trading services business.

"Similarly, while lower rates were a headwind for net interest income during the quarter, we also saw significant deposit inflows and greater client usage of our strong balance sheet. Our costs remain contained, with expenses down 2 percent year-over-year.

"Although the near-term outlook for financial markets is uncertain and we must be cautious about the pace and timing of the economic recovery, State Street's commitment and ability to be an essential partner to its clients in these challenging days is unwavering and creates a strong foundation for future growth."

For the record, the key numbers include the following.

Assets under custody or administration as of quarter-end decreased (2) percent to US$31.9 trillion, primarily due to lower end of period equity market levels and a previously announced client transition, partially offset by higher end of period fixed income market levels.

Assets under management as of quarter-end decreased (4) percent to $2.7 trillion, primarily due to lower end of period equity market levels, partially offset by net inflows.

New business

Investment servicing mandates announced in 1Q20 totalled $171 billion with quarter-end servicing assets remaining to be installed in future periods of $1.1 trillion.

Investment management net inflows in 1Q20 of $39 billion were driven by cash and institutional inflows, partially offset by ETF (exchange-traded fund) outflows.

Revenue

Fee revenue increased 6 percent reflecting higher servicing fees, management fees, and record foreign exchange trading services revenue amidst significant market volatility towards quarter-end, partially offset by lower software and processing fees and securities finance revenue.

Net interest income (NII) decreased 1 percent, primarily due to the impact of lower market rates, partially offset by stronger deposit balances, reflecting period-end 1Q20 inflows, and episodic market-related benefits.

Compared to 4Q19, NII increased 4 percent, largely driven by stronger deposit balances and episodic market-related benefits, partially offset by long-term debt issuances.

Provision for credit losses

Total provision for credit losses, calculated under the Current Expected Credit Loss (CECL) accounting standard adopted on January 1, 2020, increased $36 million primarily driven by the impact of COVID-19-driven changes in State Street's economic outlook as of quarter-end on estimated lifetime losses under the CECL standard.

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The tone of the recent first quarter 2020 results statement issued by State Street was more sombre than usual, being overshadowed by coronavirus considerations.

Ron O'Hanley, Chairman and Chief Executive Officer, said: "The COVID-19 pandemic is an unprecedented challenge for the global economy. I am immensely proud of our employees for their outstanding performance on behalf of our clients while working under trying conditions.

"State Street operated effectively and responded quickly to help stabilize the financial markets and support our employees, clients and communities.

"Our operational resilience, experience, and business continuity plans, as well as our strong balance sheet and associated capital and liquidity positions, helped prepare us for these extraordinary times and have positioned us to confidently navigate volatile market conditions, serve our clients, and efficiently execute against our strategy.

"While our first quarter results were somewhat impacted by the COVID-19 pandemic, our overall strong year-over-year performance reflects the strength, diversity and durability of our business model.

"Compared to 4Q19, market valuations and client flows impacted servicing and management fees, offset by significant client activity, with heightened volatility levels driving strong fee revenue growth in our foreign exchange trading services business.

"Similarly, while lower rates were a headwind for net interest income during the quarter, we also saw significant deposit inflows and greater client usage of our strong balance sheet. Our costs remain contained, with expenses down 2 percent year-over-year.

"Although the near-term outlook for financial markets is uncertain and we must be cautious about the pace and timing of the economic recovery, State Street's commitment and ability to be an essential partner to its clients in these challenging days is unwavering and creates a strong foundation for future growth."

For the record, the key numbers include the following.

Assets under custody or administration as of quarter-end decreased (2) percent to US$31.9 trillion, primarily due to lower end of period equity market levels and a previously announced client transition, partially offset by higher end of period fixed income market levels.

Assets under management as of quarter-end decreased (4) percent to $2.7 trillion, primarily due to lower end of period equity market levels, partially offset by net inflows.

New business

Investment servicing mandates announced in 1Q20 totalled $171 billion with quarter-end servicing assets remaining to be installed in future periods of $1.1 trillion.

Investment management net inflows in 1Q20 of $39 billion were driven by cash and institutional inflows, partially offset by ETF (exchange-traded fund) outflows.

Revenue

Fee revenue increased 6 percent reflecting higher servicing fees, management fees, and record foreign exchange trading services revenue amidst significant market volatility towards quarter-end, partially offset by lower software and processing fees and securities finance revenue.

Net interest income (NII) decreased 1 percent, primarily due to the impact of lower market rates, partially offset by stronger deposit balances, reflecting period-end 1Q20 inflows, and episodic market-related benefits.

Compared to 4Q19, NII increased 4 percent, largely driven by stronger deposit balances and episodic market-related benefits, partially offset by long-term debt issuances.

Provision for credit losses

Total provision for credit losses, calculated under the Current Expected Credit Loss (CECL) accounting standard adopted on January 1, 2020, increased $36 million primarily driven by the impact of COVID-19-driven changes in State Street's economic outlook as of quarter-end on estimated lifetime losses under the CECL standard.