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July 23, 2020

Northern Trust Q2 2020 net income plunges 20%

American asset manager Northern Trust has reported a net income of $313.3m in Q2 2020, a 20% slump from $389.4m in the prior year.

Total revenue remained almost stable at $1.51bn.

The firm showed resilience in Q1 2020 despite the Covid-19 pandemic, managing to register a 4% year-on-year rise in net income to $360.6m.

The group’s assets under custody/administration as at 30 June 2020 were $12.1trn, up 7% from $11.32trn a year ago

Assets under custody/administration in wealth management rose 8% to $751.2bn to $698.4bn.

The group’s assets under management were $1.25trn at the end of June 2020, a 7% rise from the previous year.

Assets under management in wealth management increased 4% to $303.8bn from $293.2bn.

Total consolidated trust, investment and other servicing fees were $961.5m, up 1% on a year-over-year basis.

Wealth management trust, investment and other servicing fees dropped 3% to $395.3bn from $406.1bn, driven by unfavourable lagged markets.

C&IS trust, investment and other servicing fees of $566.2m were 3% higher than the prior year.

Unfavourable lagged markets hit custody and fund administration fees.

However, new business led to growth in investment management fees while higher spreads supported a rise in securities lending fees.

Northern Trust chairman and CEO Michael O’Grady said: “Northern Trust’s performance in the second quarter of 2020 resulted in revenue consistent with the prior year, diluted earnings per share of $1.46, and a return on average common equity of 12.2%.

“Non-interest-related revenue grew 4% compared to the prior year and offset an 11% decline in net interest income reflecting the low interest rate environment. Expense in the quarter increased 3% from the prior year. As announced yesterday, our Board of Directors maintained our dividend of $0.70 per share for the third quarter, reflecting the strength of our capital position and balance sheet.”

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