State Street Shares Jump Amid Brighter Hopes for Lending Income
State Street Shares Jump Amid Brighter Hopes for Lending Income
(Bloomberg) -- State Street Corp. surged as much as 7.5%, the most in more than seven weeks, after saying net interest income probably won’t fall in the third quarter even as lower interest rates pressure revenue.
“We expect NII to come in flattish quarter over quarter, which is a bit better than what we had anticipated,” Chief Financial Officer Eric Aboaf said Tuesday at a conference in New York. “We’re seeing some downward pressure from the decline in long-end rates. Deposits are hanging in better this quarter than had been expected.”
State Street said in July that net interest income -- revenue from customers’ loan payments minus what the bank pays depositors -- could fall 1% to 3% this quarter compared with the three months through June. It declined 9% in the second quarter to $659 million.
“NII resilience is an important development,” Paul Gulberg, an analyst at Bloomberg Intelligence, said in a note. He said the forecast “signals stability.”
Shares of the company climbed 6.9% to $57.70 at 12:38 p.m. in New York, paring this year’s decline to 8.5%.
To contact the reporter on this story: Michelle F. Davis in New York at mdavis194@bloomberg.net
To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steve Dickson, Dan Reichl
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