2Q17 performance and expected increase
In 2Q17, State Street (STT) posted NII (net interest income) of $617.0 million, which was a substantial rise of 13.0% on a YoY (year-over-year) basis. The rise was mainly due to an improvement in its liability mix, the company’s approach to liability pricing, and the interest rate market in the United States. According to State Street’s top management, NII could rise in 3Q17 on the back of the Fed’s rate hike in June 2017.
Compensation and employee benefits
State Street’s (STT) total expenses rose 7.0% YoY in 2Q17. Of that, 3.0% relates to expenses for the acquisition of GE Asset Management.
Compensation and employee benefits have also risen 8.0% YoY, largely due to incentive compensation and new business activities. Expenses for the acquisition of GE Asset Management, merit increases, and expenses related to regulatory initiatives have also contributed to the YoY rise in compensation and employee benefits.