Net Income Falls At Northern Trust In Q1; Assets Under Custody Rise Vs Previous Quarter

Editorial Staff

26 April 2023

Northern Trust yesterday reported first-quarter net income per diluted common share of $1.51, rising from $0.71 in the fourth quarter of 2022 but down from $1.77 in the first quarter of 2022. Net income was $334.6 million, down from $155.7 million in the prior quarter and $389.3 million in the prior-year quarter.

“The recent disruptions in the banking sector reinforce the importance of Northern Trust’s 130-year track record of strength and stability. New and existing clients have consistently turned to us for their liquidity needs during periods of market stress, and the first quarter of 2023 was no exception,” Michael O’Grady, chief executive, said in a statement.

Total revenues stood at $1.757 billion in the first three months of this year, up from $1.725 billion a year earlier. Net interest income – buoyed by rising US interest rates – surged 40 per cent year-on-year to $544.4 million. Trust, investment and other servicing fees fell 9 per cent to $1.063 billion; other non-interest income dropped 11 per cent year-on-year, the Chicago-headquartered firm said.

Non-interest costs rose 7 per cent from a year ago to $1.285 billion; provision for credit losses was $15 million, against just $2 million in the same quarter a year before.

Total assets under custody/administration stood at $14.2 trillion at the end of March this year, down from $15.54 trillion a year earlier, but up from $13.6 trillion at the end of December 2022. Within that figure, wealth management assets under custody were $947.6 billion, down 7 per cent on a year before. Wealth management assets under management fell 11 per cent year-on-year to $1.33 trillion.

“Custody and fund administration fees increased sequentially primarily due to favorable markets, favorable currency translation and new business, partially offset by lower transaction volumes and nonrecurring fees in the prior quarter,” the firm said. Custody and fund administration fees decreased from the prior-year quarter primarily due to unfavorable markets and unfavorable currency translation.
Northern Trust said that at the end of March, its Common Equity Tier 1 Capital ratio was 11.3 per cent on a standardized measure; its Tier 1 leverage ratio was 7.3 per cent .