UPDATE 1-State Street's profit lifted by buoyant stock markets

Jan 24 (Reuters) - State Street Corp, the world's second-largest standalone custody bank, said fourth-quarter profit rose 17 percent as its asset servicing business got a boost from stronger global stock markets.

Net income rose to $545 million, or $1.22 per share, from $468 million, or $1.00 per share, a year earlier.

On an operating basis, the company earned $514 million, or $1.15 per share.

Analysts on average had expected a profit of $1.19 per share, according to Thomson Reuters I/B/E/S.

Total operating revenue rose 2.6 percent to $2.53 billion.

State Street manages cash for companies and handles back-office processing of securities and banking transaction for fund managers, among its other businesses, but does not have retail branches.

Revenue at the asset servicing business, the bank's largest, rose 7.1 percent to $1.23 billion, while it increased 5.9 percent to $125 million in foreign exchange trading.

Assets under custody and administration rose 12.5 percent to $27.43 billion as of Dec. 31.

Compensation and employee benefit costs increased 2.1 percent to $934 million.

Rival BNY Mellon Corp, the world's largest custody bank, reported a modest increase in fourth-quarter profit last Friday.

State Street shares closed at $72.76 on the New York Stock Exchange on Thursday.