BOSTON--(BUSINESS WIRE)--Aug. 25, 2003--
Company Also Announces Expanded Presence in New York CityState Street Corporation (NYSE: STT), the world's leading
specialist in meeting the needs of institutional investors, announced
today its progress in transitioning U.S.-based clients following its
acquisition of Deutsche Bank's global securities services businesses
(GSS). Clients who have recently transitioned to State Street include
Anheuser-Busch, Army & Air Force Exchange Service, Frank Russell,
Burlington Northern Santa Fe Railroad, Catholic Healthcare West, Johns
Hopkins University, Kaiser Permanente, Lamb-Weston, PacifiCorp,
Teledesic, LLC, The Brookings Institution and Welch Foods.
State Street also announced that it has secured a lease for 80,000
square feet of office space at 2 World Financial Center in lower
Manhattan, which it will occupy beginning in January 2004. As the
company announced in its integration blueprint in February 2003, it
will consolidate existing GSS offices into these new premises as well
as house client service and relationship management teams from its
securities finance, wealth management services, global markets and
institutional investor services divisions. In total, over 300 State
Street employees will operate out of the New York facility.
Ronald E. Logue, State Street's president and chief operating
officer, said, "We continue to make excellent progress against our
goal of retaining 90% of the client revenue associated with the GSS
business. Nowhere is this more evident than in the United States where
our significant leadership in investor services, our commitment to the
business, the ease with which the former GSS clients have transitioned
to State Street, and the economies of scale we have achieved have all
contributed to making the acquisition a great success."
State Street anticipates that the full GSS integration will be
completed on schedule by the middle of 2004. To date, State Street has
completed over 375 client conversions with over 300 more scheduled to
take place over the next two months. With clients in the United States
nearing the end of their decision process regarding transition to
State Street, as of August 25th, only 6.7% of the client revenue has
been awarded to other providers - an increase of about 1.5% since July
and within the company's range of expectation. State Street has also
secured over $60 million in annualized "out of scope revenues" in
addition to its mandate to provide investment services to Deutsche
Asset Management for over $350 billion in assets.
Based on the first five months' operating results through June 30,
2003, excluding "out-of-scope" revenue and expenses, State Street
believes it will meet its previously-disclosed expectation that the
acquisition will be dilutive to operating earnings per share by
approximately $0.01 to $0.03 in 2003. The merger and restructuring
costs associated with the acquisition in 2003 are expected to be
$90-110 million on a pre-tax basis.
Logue continued, "We're also very pleased to announce our expanded
presence in New York, a global financial center. We continue to win
significant new mandates from pension funds, foundations and
endowments, and these new offices will help us continue our tradition
of serving our clients close to their base of operations. It also
underscores our continuing success in growing our wealth manager
services business as well as our outstanding leadership in securities
lending and research and trading."
State Street Corporation (NYSE: STT) is the world's leading
specialist in providing sophisticated global investors with investment
servicing, investment management, research & analytics and trading
services. With $8.5 trillion in assets under custody and $901 billion
in assets under management, State Street operates in 23 countries and
over 100 markets worldwide. For more information, visit State Street's
web site at www.statestreet.com.
This news announcement contains forward-looking statements as
defined by United States securities laws, including statements about
the financial outlook and business environment. Those statements are
based on current expectations and involve a number of risks and
uncertainties, including those related to the pace at which State
Street adds new clients or at which existing clients use additional
services, the value of global and regional financial markets, the pace
of cross-border investment activity, changes in interest rates, the
pace of worldwide economic growth and rates of inflation, the extent
of volatility in currency markets, consolidations among clients and
competitors, State Street's business mix, the dynamics of markets
State Street serves, and State Street's success at integrating and
converting acquisitions into its business. Other important factors
that could cause actual results to differ materially from those
indicated by any forward-looking statements are set forth in State
Street's 2002 annual report and subsequent SEC filings. State Street
encourages investors to read the corporation's annual report,
particularly the section on factors that may affect financial results,
and its subsequent SEC filings for additional information with respect
to any forward-looking statements and prior to making any investment
decision. The forward-looking statements contained in this press
release speak only as of the date hereof, August 25, 2003, and the
company will not undertake efforts to revise those forward-looking
statements to reflect events after this date.
CONTACT: State Street CorporationHannah Grove, 617-664-3377 (Media)
or
State Street CorporationArlene Roberts, 617-664-3933 (Media)
or
State Street Corporation
Kelley MacDonald, 617-664-3477 (Investors)
SOURCE: State Street Corporation