State Street Corp., the financial industry's biggest recordkeeper, doesn't plan to be part of any consolidation trend that might spread through the custody services industry.
In a recent speech to the Greater Boston Chamber of Commerce and in an interview with the Boston Globe, State Street CEO Ron Logue said that staying independent makes sense not only to save jobs in Boston, but also for the company's shareholders. "We believe that our independence gives us our secret weapon -- our focus," he said.
Logue cited the example of Deutsche Bank, which bought longtime competitor Banker's Trust. "They didn't invest a penny in it," he said.
Industry analysts, however, expect considerable consolidation in the mutual fund servicing business, which now has four big players: State Street, Bank of New York, Mellon and Northern Trust. State Street's performance, they say, depends on its ability to grow revenue at above-average rates and curb expense growth, something it has struggled with in the past.
Logue, who took the helm after the departure of State Street's previous top executive, David Spina, last summer, said State Street's operating revenue grew 14% last year, faster than any of its competitors. He admitted that expenses remain a problem, but said there will be "no slashing and burning going on here."