State Street Corp (NYSE:STT) stock rose 1.36% (As on April 18, 11:11:35 AM UTC-4, Source: Google Finance) after the company reported a first-quarter profit that missed analysts’ estimates, hurt by a fall in fee income due to the recent U.S. banking crisis. State Street, the world’s largest custodian bank, saw its assets under custody or administration fall 10% to $37.6 trillion in the first quarter. The bank’s net interest income rose 50% to $766 million helped by the U.S. Federal Reserve’s aggressive interest rate hikes. Along with a number of other large U.S. banks, State Street provided $1 billion of liquidity to First Republic Bank last month. State Street has set aside $44 million as provision for credit losses in the reported quarter as steep rate rises stoke fears of an economic slowdown. Fee revenue decreased 9%, primarily reflecting the impact of lower average market levels on servicing and management fees, lower FX trading services and lower Front office software and data revenue, partially offset by higher Securities finance revenue and Other fee revenue. Software and processing fees decreased 18% and 24% compared to 1Q22 and 4Q22, respectively, primarily driven by lower front office software and data revenue associated with CRD.

STT in the first quarter of FY 23 has reported the adjusted earnings per share of $1.52, missing the analysts’ estimates for the adjusted earnings per share of $1.64, according to Refinitiv IBES data. The company had reported the adjusted revenue growth of 1 percent to $3.1 billion in the first quarter of FY 23, missing the analysts’ estimates for revenue by 0.60%. Net interest income (NII) increased 50%, primarily due to higher short-term market rates from global central bank hikes, an increase in long-term interest rates, and balance sheet positioning, partially offset by lower average deposits.

Moreover, Standardized common equity tier 1 (CET1) ratio at quarter-end of 12.1% increased 0.2% points compared to 1Q22. Compared to 4Q22, CET1 ratio at quarter-end decreased 1.5% points primarily driven by the continuation of common share repurchases and the expected normalization of risk weighted assets (RWAs). Tier 1 leverage ratio of 5.9% at quarter-end was relatively flat compared to both 1Q22 and 4Q22.

Additionally, in 1Q23, State Street returned a total of $1.5 billion of capital, consisting of $1.25 billion in common stock repurchases and declared common dividends of $0.63 per share