Custody and Fund Admin Fees Drives Northern Trust Q3 Revenues

Northern Trust reported revenues from custody and fund administration fees increased 15% year over year to $275 million during the third quarter, driving revenues for its corporate and institutional services (C&IS) division.

The global custodian saw revenues from the C&IS division increase 11% to almost $400 million.

As well custody and fund administration, revenue from investment management fees were up 6% to $75.4 million, however revenues from securities lending decreased 3% to $22 million.

“New businesses and higher equity markets contributed to strong growth in assets under custody and under management,” states Frederick Waddell, chairman and CEO, Northern Trust.

In the three months ending September 30, assets under custody increased 13% to $5.9 trillion, while assets under management rose 9% to $923.3 billion.

“This performance reflects ongoing efforts focused on growing our client franchise while achieving sustainable improvements in productivity,” Waddell adds.

Overall revenue was $1.08 billion, up 3%, however net income fell from $206.5 million in the third quarter last year to $204.5 million.

Northern Trust is the latest global custodian to report its third quarter earnings, after rival BNY Mellon reported a total revenue increase of 22% after recording strong performances in its investment services and investment management businesses.

BNY Mellon’s investment services, which include global custody, broker-dealer and global collateral services, increased 5% to $1.8 billion.

During the third quarter, BNY Mellon reported the highest assets under custody which increased 3% to $28.3 trillion, followed by J.P. Morgan which grew 8% to $21.2 trillion.