State Street Corp. on Thursday said it incorrectly overcharged its asset servicing clients at least $200 million over the past 18 years.
The overcharges were not related to custody services, spokeswoman Anne McNally said. The excess charges were on “support equipment” used by its asset servicing clients, including hardware and software, Ms. McNally said.
The company said in a news release that most of the affected clients were based in the U.S. and that the firm is contacting those affected. It said all affected clients would get full compensation plus interest once the review has been completed.
The review will be completed “as soon as possible,” Ms. McNally said. “We expect to have an update during the first quarter 2016.”
State Street uncovered the overcharging during its own risk assessment review, Ms. McNally said. The $200 million in question is part of a total of $400 million the company charged clients for the support equipment from 1996 to 2014.
State Street said in a news release that the actual amount to be reimbursed to clients will not be known until the review is completed, and that amount could “differ materially” from the preliminary $200 million assessment.
The expenses under review represented about 0.7% of State Street's total asset servicing fee revenue of $5.1 billion in fiscal 2014, State Street said in the news release.