David Spina, State Street Corp.'s chief executive, is credited with tightening the firm's spending early.   (Globe File Photo)

Overcoming the global downturn

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t's no small coup that the company ranked number 10 in The Globe 100 for 2001. It was the toughest year in memory at the Boston financial firm, with global markets slumping for the second straight year and cost pressures mounting amid slowing revenues.

Chief executive David Spina managed to eke out a 24th straight year of double-digit earnings growth, a record he didn't want to break, particularly so early in his tenure at the helm of the investment and securities-safekeeping firm. State Street's operating earnings rose 11 percent last year, to $661 million, for a 10 percent gain in earnings per share, to $2. Those earnings were wrung from a historically lean 8 percent increase in annual revenues, to $3.91 billion.

"Given the plight of the equity markets, I actually think the year 2001 was a pretty commendable performance," said Lee Forker, a longtime investor in State Street and president of New England Research & Management, a Boston investment firm. He credited Spina with tightening spending well ahead of the pack. Had Spina not turned his attention to the slowing economy and sluggish markets as early as he did, analysts said, the company's employees and stock price would likely have suffered more than they have. State Street has laid off at least 440 employees in 2002, leaving a total of 19,500 worldwide.

State Street shares slumped 16 percent last year, in line with its rivals in the custodial banking business, in which companies such as Bank of New York Co., Northern Trust Corp., and Mellon Financial Corp. handle accounting and record keeping for pension funds and mutual funds. State Street has the largest share of US mutual fund clients, and many of those firms saw their assets slump, or grow far more slowly, last year than during the 1990s.

BETH HEALY