State Street Investors Want Changes At The Top

Some of the investors told the Financial Times that they had 'communicated their discontent to the board, directly and indirectly, and that they wished to see either Joseph 'Jay' Hooley, Chief Executive, or Edward Resch, Chief Financial Officer, replaced with 'new blood''.

In the meantime, Bloomberg reports that State Street said Tuesday that third-quarter profit fell 0.6% as revenue from foreign-exchange trading declined and low interest rates continued to depress earnings.

Net income on an operating basis declined to $473m, from $476m a year earlier when there were more shares outstanding, the Boston-based company. Excluding certain items, State Street beat the average estimate of 22 analysts surveyed by Bloomberg.

Hooley said: 'Our third-quarter results reflect continued resilience across both asset servicing and asset management, partially offset by weakness in trading services. In a difficult environment, we were able to achieve positive operating leverage by controlling expenses and by continuing to implement our Business Operations and Information Technology Transformation program'.

Hooley continued, 'Although equity markets have improved, clients remain conservative in their investment allocations which adversely affects our revenue. We continue to see demand for our solutions as evidenced by $211bn of new asset servicing wins, net new assets of $78bn to be managed by State Street Global Advisors and a strong pipeline'.

'We look forward to integrating the recently closed acquisition of the Goldman Sachs Administration Services business and introducing these clients to our broad range of products and services. While acquisitions are consistent with our long-term growth strategy, one of our highest priorities in the current environment is returning capital to our shareholders. During the third quarter, we purchased $480 million of common stock, leaving $840m remaining under our $1.8bn common stock authorization, which we plan to complete in March of 2013'.

'We remain confident in the long-term growth prospects of our business and continue to execute against our priorities of leveraging the power of our core franchise, managing our expenses carefully, delivering value to our clients through innovation and returning capital to our shareholders'.