State Street’s Logue to step down

The news was a surprise to many, coming just a day after Logue reported positive earnings for the third quarter, in a conference call to Wall Street analysts and investors. He has been chief executive since 2004. He helped expand its reach around the globe, solidifying its place among the largest providers of recordkeeping and accounting services to investment firms. It is also a large money manager.

“The volatility, and the global financial meltdown we’ve experienced over the last few years, certainly has had a tough effect on the company, and it certainly may have taken a toll on Ron as well,’’ said Gerard Cassidy, a longtime banking analyst at RBC Capital Markets in Portland, Maine.

Logue was chief through the rapid rise and subsequent dive in the financial markets that generated huge losses for investors around the world, including in numerous State Street investments. The company, known for its steady hand over decades, came under attack from investors and customers, and it sought to assure them that its financial management and risk-taking were under control. And State Street was pulled into the nation’s massive bank bailout last fall, forced by government regulators to take a $2 billion capital infusion, even though it’s not a commercial lender, because of its role serving financial markets.

In a statement, Gregory L. Summe, the lead director on State Street’s board, said, “Ron Logue has done an outstanding job as State Street’s chairman and CEO, leading the company through significant global expansion and most recently, through a period of unprecedented market turmoil.’’

Summe, who also is chairman of the board’s nominating and governance committee, added, “Jay Hooley is a proven leader, with more than two decades of experience at State Street, who is ideally suited to assume the role of CEO and guide State Street’s growth in the years to come.’’

Neither Logue nor Hooley was available for comment.

The succession was “long planned,’’ according to a company spokeswoman. Logue will remain nonexecutive chairman until Jan. 1, 2011.

Hooley is a familiar face to investors, having presented at numerous analyst conferences. He was head of investor services for State Street, which includes its largest businesses, for six years before moving into his current role, in April 2008. He is a Boston College graduate and joined the company in 1986.

Hooley is taking over as State Street’s financial picture is improving. While the company didn’t lose money over the difficulties of the past three years, Logue has often seemed a man under siege during that period.

As the mortgage and credit markets began to crash, State Street lost money in supposedly risk-free debt funds and was sued by pension clients; the company had to set aside $618 million in early 2008 to cover legal claims related to mortgage securities that had plummeted in value. And in a small business of generating extra cash for mutual fund clients, State Street suddenly found itself drowning in $9 billion of potential losses because trading markets for otherwise safe securities froze.

The stock took a beating and the company laid off 1,800 people as it sought to cut costs.

Logue was there as the company climbed out of the worst of these troubles. Despite the calamity in financial markets, State Street posted $1.8 billion in profits in 2008, a company record.

Logue was at the table when the heads of the nation’s largest institutions gathered in Washington to discuss mending the financial markets with President Obama in the first days of his presidency. And in the spring State Street easily raised $2.8 billion in new capital from investors, part of which it used to repay the government’s $2 billion infusion, weeks later in June.

State Street shares have fallen 4.8 percent on Logue’s watch, slightly worse than the 4.2 percent drop of the Standard & Poor’s 500 Index during that period. Its shares closed yesterday at $46.68, up 18.7 percent for 2009. On Wednesday, Logue had told analysts that the second half of the year - while on target to meet Wall Street estimates - was turning out to be slower than the company had expected. The stock fell in response to his news.

Cassidy, the analyst, said, “Logue wasn’t his usual self on the call yesterday. He wasn’t his usual optimistic self.’’

Beth Healy may be reached at bhealy@globe.com.