State Street on track after crisis, CEO says
Bank sees promise in new markets
State Street Corp. has “turned the page’’ on the financial crisis, its chief executive, Jay Hooley, said yesterday, following news last week that the Boston financial giant would restore its stock dividend and buy back stock.
Hooley’s remarks during an interview followed a Greater Boston Chamber of Commerce speech, in which he acknowledged how difficult the markets and business environment were in late 2008 and 2009. Now, he said, “It’s time to move beyond recovery and face the future with confidence.’’
State Street, which manages $2 trillion for large clients and handles record keeping and services for mutual funds, hedge funds and other institutions, plans to raise its quarterly dividend to 18 cents per share next month, after slashing it to a penny in early 2009. State Street is one of the 19 largest US banks recently stress-tested by the Federal Reserve to ensure they have sufficient capital to withstand a serious downturn. The Fed approved the company’s plan to raise its dividend and buy back up to $675 million of its own stock this year — a strategy companies use to improve their stock’s value.
Hooley said political and economic volatility are at a high around the world, from Japan, where the company has 450 employees, to the Middle East, but he sees long-term opportunity for State Street in handling retirement funds. With states and municipalities in the United States and Europe under pressure to shift from costly traditional pensions, he said, State Street aims to capture growth in 401(k)-type plans and individual retirement accounts that rise in their place.
Asia is a nascent market for retirement saving, he said. And Latin America and South America are giant markets that State Street has yet to penetrate. He called Latin America “perhaps the next entry point for us.’’
Hooley declined to comment on the plans of Fidelity Investments — a State Street client — to shutter its Marlborough facility and shift many of the 1,100 jobs there to New Hampshire and Rhode Island. He said State Street, with 12,000 employees in the state and 8,000 of those in Boston, is committed to Massachusetts because its roots are here and it continues to mine talent in the area.
While the company has offices around the world that employ thousands, Hooley said he is often criticized when he travels for being “too Boston-centric.’’
Hooley declined to comment on legal challenges the company is facing from pension clients alleging it improperly charged them for foreign currency trades. Such trading is part of many large investment portfolios.
“We offer a very competitive and transparent foreign exchange service,’’ Hooley said. “We think it’s a great value to the customer.’’
Beth Healy can be reached at bhealy@globe.com. 
