Northern Trust profit falls on hit from debt investment sale



April 16 (Reuters) – Asset and wealth manager Northern Trust posted a 38% fall in first-quarter profit on Tuesday as a loss on the sale of some debt investments offset gains from higher fee income for servicing and managing client assets.

The company incurred a $189.4 million loss on the sale of certain debt securities, as it repositioned its portfolio.

It also booked a $12.5 million expense tied to the replenishment of a government deposit insurance fund, which was drained after Silicon Valley Bank and Signature Bank failed last year.

Shares of Northern Trust fell 1.2% in premarket trading. They have dipped 0.8% so far this year, compared to a 3.3% fall and 5.8% rise for peers State Street and Bank of New York Mellon, respectively.

Northern Trust said the 135-year-old company’s net interest income (NII) – the difference between what it earns on assets and pays on liabilities – fell 0.6% to $528.1 million due to higher deposit costs.

Equity markets have rallied in recent months amid hopes of a soft landing for the economy, resulting in assets under custody or administration jumping 16% to $16.47 trillion in the quarter.

Rivals State Street and Bank of New York Mellon also saw client assets drive up their fee-based income higher.

The company’s trust, investment, and other servicing fees rose 7% to $1.14 billion. Such fees, primarily determined by the market value of client assets managed and serviced, make up more than two-thirds of its total revenue.

Foreign exchange trading income rose 8% to $57 million, driven by higher client volumes.

Chicago, Illinois-based Northern’s total revenue fell 5.6% to $1.65 billion.

The company’s earnings allocated to common and potential common shares fell to $196.1 million, or 96 cents per share, in the three months ended March 31, from $315.2 million, or $1.51 per share, a year earlier.




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Edmund Shing, PhD

Global Chief Investment Officer
BNP Paribas Wealth Management

Edmund has over 29 years of experience in financial markets in a wide variety of positions, ranging from proprietary trading to portfolio manager in a number of financial institutions in London and Paris.  He previously held the role of Global Head of Equity and Derivative Strategy at BNP Paribas in London from 2015 to 2020, and has been Chief Investment Officer at BNP Paribas Wealth Management since November 2020.

Edmund is responsible for piloting our investment strategy and will continues to rollout out recommendations and themes with actionable advice that brings our expertise to our clients and support to our client-facing teams.  In this time of change, his expertise in following and anticipating markets is a true value added for both our customers and those at Wealth Management who serve them.

Edmund has a PhD in Cognitive and Computing Science from the University of Birmingham in the United Kingdom, and has done advanced studies in Knowledge-Based Systems and in Experimental Psychology.  He is an EFFAS-certified financial analyst. He has also authored the book “The Idle Investor” published by Harriman House in 2015, proposing 3 simple investment strategies that take only a few minutes to execute per month.

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