Institutional investment manager State Street Corp. (STT) earned $513 million, or $1 a share, for the second quarter, up from $432 million, or 87 cents a share, a year ago on growth in fee revenue. Revenue for the three months ended June 30 rose 8% to $2.5 billion from $2.3 billion a year earlier. For the first quarter of 2011, State Street reported earnings of 93 cents a share on revenue of $2.4 billion. "In the second quarter we achieved strong growth in fee revenue due to continued momentum in servicing and management fee revenues driven by global client demand, and supported by seasonal factors affecting securities finance," State Street CEO Joseph Hooley said. One positive factor was net interest revenue from discount accretion related to asset-backed commercial paper conduit securities consolidated onto the balance sheet in 2009. The ABCP market, offering short-term funding, has struggled since the middle of 2008 when assets worldwide began to lose value. State Street expects to record a pretax gain about $1.25 billion in interest over the remaining terms of the former conduit securities. However, operating expenses and servicing fees are increasing greatly, in some case more than 20% per year. Write to Jacob Gaffney. Follow him on Twitter @jacobgaffney.