State Street (STT -1.30%) reported a 25% increase in first-quarter earnings compared to the same period last year, beating analysts' estimates.

The Boston-based asset manager and custody bank saw earnings per share jump to $1.62 in the quarter, a 37% increase over the first quarter of 2019. 

Revenue was up 4.5% to $3.1 billion year over year. While net interest income was down 1.3% due to rate cuts, fee revenue rose 6.2% to $2.4 billion. Fee revenue was boosted by higher servicing and management fees, up 3% and 7%, respectively, along with record-high foreign exchange trading services revenue due to market volatility. Foreign exchange trading fees soared 64%.

A sign post in Boston that marks the intersection of State Street and Congress Street

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Assets under custody/administration in the investment servicing arm decreased 2% to $31.9 billion, while investment manage assets under management dropped 4% to $2.7 trillion.

"Our operational resilience, experience, and business continuity plans, as well as our strong balance sheet and associated capital and liquidity positions, helped prepare us for these extraordinary times and have positioned us to confidently navigate volatile market conditions, serve our clients, and efficiently execute against our strategy," State Street Chairman and CEO Ronald O'Hanley said. "While our first-quarter results were somewhat impacted by the COVID-19 pandemic, our overall strong year-over-year performance reflects the strength, diversity and durability of our business model."

Provision of credit loss was $36 million for the asset manager and custody bank, up from essentially nothing a year ago due to the effects of the novel coronavirus pandemic. However, expenses were down about 2% to $2.2 billion. Occupancy expenses were down 6%.

The common equity tier 1 ratio was 10.7%, down from 11.5% in the first quarter of 2019 but still above the minimum standard for a bank's financial strength.