State Street third-quarter profit rises, but FX revenue plummets

Reuters

State Street Corp , the No. 2 global custody bank, said Tuesday that third-quarter net income rose 20 percent, but revenue from trading foreign currencies fell sharply, pulling down overall revenue.

Third-quarter foreign exchange revenue dropped 44 percent to $115 million from the year-ago level of $204 million. Total operating revenue was $2.35 billion, down 2.7 percent from the year-ago quarter.

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State Street, which is fighting several lawsuits that claim it overcharged on forex trades, blamed lower volatility for the decline in revenue.

Boston-based State Street's net income rose to $654 million, or $1.36 a share, after a benefit related to the 2008 bankruptcy filing by Lehman Brothers. In the year-ago period, it earned $543 million, or $1.10 a share, in the year-ago quarter.

On an operating basis, State Street earned 99 cents a share. Analysts, on average, expected 96 cents a share, according to Thomson Reuters I/B/E/S.

(Reporting by Tim McLaughlin; Editing by Jeffrey Benkoe)