State Street reported increased profits for the first quarter on Friday, driven by heightened client activity and fee income resulting from market volatility.

The Boston, Massachusetts-based bank primarily offers custody and servicing for institutional investors such as asset managers and pension funds. Significant market swings, triggered by the Iran conflict and widespread selling of AI-related software stocks, prompted investors and asset managers to reposition their portfolios, boosting fee revenue for State Street.

For the three months ended March 31, net income reached $764 million, or $2.49 per share, up from $644 million, or $2.04 per share, in the same period last year.

Total revenue rose 16% year-over-year to $3.8 billion, supported by a 15% increase in total fee revenue and a 17% rise in net interest income. Quarterly total fee revenue reached a record $2.96 billion. Growth in assets under custody and administration contributed to fee income, while foreign exchange trading services revenue increased 29% due to higher volumes, and securities finance revenue grew 2%.

As of March 31, State Street's assets under custody and administration totaled $54.52 trillion, up 17% from a year earlier. Assets under management stood at $5.62 trillion.

The results mirrored the performance of larger rival Bank of New York Mellon, which also reported a significant rise in first-quarter profit on Thursday.

State Street's CEO stated in a release that the future direction of the macroeconomic and geopolitical environment remains uncertain.