J.P. Morgan Comments On Legal Expenses For STT, BK

In commenting on trust and processors, J.P. Morgan says that “1Q earnings should be marked by few key drivers: 1) good performance in the equity markets should bode well for asset management and asset servicing.” “2) Some recovery in F/X volumes but volatility still down; 3) net interest margin pressures; 4) modest increase in securities lending spreads; and 5) seasonal impacts to revenues and expenses.” “The concerns about the impact of lawsuits and increased scrutiny on F/X revenues are not likely to show up in 1Q although we would expect that the scrutiny would hurt F/X revenues and margins over time - F/X is one of the higher margin revenues for trust banks,” J.P. Morgan writes. “However, this will pressure legal expenses for State Street Corp. STT and Bank of New York Mellon Corporation BK.”