Northern Trust has reported a 23% fall in net income in Q3 2020, which included a $43.4m pre-tax charge for a corporate action processing error.

Key metrics

The asset manager’s net income for the three months to September 2020 stood at $294.5m, versus $384.6m a year ago.

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Total revenue dropped 3% to $1.49bn from $1.54bn over the period.

Net interest income slumped 21% to $336.5m from $425.3m, mainly due to a lower net interest margin.

The group’s assets under custody/administration as at 30 September 2020 reached $13.1trn, up 13% from $11.5trn in the prior year.

Assets under custody/administration in wealth management increased to $814.4bn from $701.2bn.

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Total assets under management at the group reached $1.31trn at the end of September 2020, a 9% rise from a year earlier.

Assets under management in wealth management grew to $318.5bn from $300.5bn.

Total consolidated trust, investment and other servicing fees in Q3 2020 was $1bn, up 3% from $975.5m in the previous year.

Wealth management trust, investment and other servicing fees rose 1% year-on-year to $418.9m, driven by favourable markets.

Northern Trust chairman and CEO Michael O’Grady said: “Our performance in the quarter resulted in a return on average common equity of 10.5%. Noninterest revenue grew 3% compared to the prior year, while net interest income declined 21%, as we navigated the low interest rate environment.

“Assets Under Custody and Administration and Assets under Management performed well, ending the quarter at $13.1 trillion, up 13% and $1.3 trillion, up 9% from the prior year, respectively.

“Our balance sheet and capital strength, which support our clients’ liquidity
needs, continued to evidence resilience through the recent market turbulence.”