BlackRock reaches US$9 trillion in assets under management as the banking crisis and high interest rates take hold

By Silla Brush

BlackRock’s assets rose to US$9.09 trillion in the first quarter of this year against a backdrop of falling bank deposits and a rush for safer – and more profitable – assets in the face of high interest rates and caution following the collapse of Silicon Valley Bank and Signature Bank.

“The current crisis of confidence in the regional banking sector will further accelerate growth in the capital markets, and BlackRock will be a central player,” CEO Larry Fink said.

The group said net flows into the firm’s funds totaled US$110 billion.

Long-term investment products, which include mutual funds and index funds (ETFs), added US$103 billion, well above the average forecast of analysts consulted by Bloomberg of US$84.1 billion.

The company’s adjusted net income fell 18% from a year earlier to US$1.2 billion, or US$7.93 per share, beating Wall Street’s average estimate of US$7.67 per share.

Revenue fell 10% to US$4.24 billion, in line with analysts’ forecast.

Since early last year, the monetary tightening in place to tame inflation has tested small and mid-sized lenders, which have suffered deposit declines, especially after Silicon Valley Bank and Signature Bank collapsed in mid-March.

BlackRock weathered the turmoil, with clients contributing US$8 billion net to its highly liquid products in the first quarter.

BlackRock’s assets under management are up 5.8% since the end of last year when they totaled US$8.6 trillion, fueled in part by stock and bond market gains.

The S&P 500 rose 7% in the first quarter, while the Bloomberg US Aggregate Bond Index rose 3%.

BlackRock shares, down 5.3% year-to-date through Thursday, were up 1.2% at 7:22 am ET before markets opened in New York.

With information from Bloomberg