State Street Sees 16% YoY Jump in Q2 FX Trading Services Revenues

​State Street Corporation has released its second-quarter (Q2) 2022 financial results on Friday. The company witnessed a total revenue of $2,953 billion in Q2 2022, rising 2.7% and 4.2% compared to 2Q21 and 1Q22.

According to the report, the total fee income reached $2,370 billion, up 5.7% on a yearly basis and 7.9 % compared to Q1 2022.

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Specifically, foreign exchange trading services increased 16% compared to 2Q21, primarily reflecting higher FX spreads, partially offset by lower client FX volumes. Compared to 1Q22, such services decreased 8% , mainly due to lower client FX volumes, partially offset by higher FX spreads. Besides, Securities finance decreased 2% compared to 2Q21, largely from lower Agency and Enhanced Custody balances, partially offset by higher spreads. Such part increased 11% compared to 1Q22, primarily driven by higher spreads, partially offset by lower Agency and Enhanced Custody balances.

In addition, net interest income (NII) increased 25% compared to 2Q21, primarily driven by higher short and long term interest rates and growth in loan balances. Compared to 1Q22, NII increased 15%, mainly due to higher short and long term interest rates, partially offset by lower investment portfolio balances.

However, other income decreased compared to 2Q21, reflecting the absence of a gain on sale of a majority interest in our Wealth Manager Services business in 2Q21.

Ron O'Hanley, Chairman and Chief Executive Officer, commented: "Our second-quarter results reflect the strength and durability of our business model as strong growth in net interest income and improved FX trading performance enabled us to partially offset significant fee revenue headwinds from weaker equity and fixed income markets. Operating expenses continued to be well-controlled as we remained committed to expense discipline, while managing inflationary pressures and investing back into our businesses, resulting in a healthy pre-tax margin for the quarter."

To boost further growth, State Street strengthened its leadership this year. In May, the company announced two key senior appointments in its digital department. Prior to that, it named Jessica Donohue as Global Head of Asset Owner Segment Business. Meanwhile, it enlarged strategic partnership with K2 Asset Management, Paxos, etc.