Northern Trust said trust, investment and other servicing fees from Corporate & Institutional Services (C&IS) in the second quarter were up 29% to $227.1 million from the year-ago quarter reflecting revenues from FSG, strong growth in all products and services, improved equity markets and new business.
C&IS’ second quarter results include $28.5 million of fees from FSG, contributing to a 53% increase in custody and fund administration fees, which totaled $105.4 million for the quarter. Securities lending fees totaled $46.9 million, up 29% compared with last year’s second quarter, primarily reflecting higher volumes. Fees from asset management grew 6% to $59.7 million. C&IS assets under custody totaled $2.48 trillion at June 30, 2005 compared with $2.41 trillion at March 31, 2005 and $2.02 trillion at June 30, 2004. C&IS assets under management totaled $478.3 billion compared with $477.5 billion at March 31, 2005 and $422.5 billion at June 30, 2004. Assets under custody include $1.08 trillion of global custody assets, an increase of 35% compared with $800.6 billion one year ago.
Trust, investment and other servicing fees from Personal Financial Services (PFS) in the quarter increased 9% and totaled $175.0 million compared with $160.0 million a year ago. The second quarter results include $2.1 million of fees from FSG. The increase in PFS fees resulted primarily from improved equity markets and new business. Revenue growth continued to be broad-based, with all states and our Wealth Management Group reporting year- over-year increases in fees. PFS assets under custody totaled $213.9 billion at June 30, 2005, compared with $209.9 billion at March 31, 2005 and $194.3 billion at June 30, 2004. Of the total assets under custody, $111.5 billion is managed by Northern Trust compared with $111.1 billion at March 31, 2005 and $104.9 billion at June 30, 2004.
The results from C&IS helped the overall figures as Northern Trust Corporation reported record net income per common share of $.68 for the second quarter, an increase of 15% from $.59 per share earned a year ago. Net income also increased 15% to a record $150.0 million, up from $130.8 million earned in the second quarter of last year. This performance resulted in a return on average common equity of 17.84%.
William A. Osborn, Chairman and Chief Executive Officer, commented, “We are very pleased with this quarter’s outstanding performance. Double digit revenue and earnings growth was driven by record trust, investment and other servicing fees and net interest income, while operating expenses continued to be closely managed. We achieved record levels of assets under custody, which rose 22% to $2.7 trillion, and assets under management, which increased 12% to $590 billion, reflecting our continued success in the marketplace. The strength of our business continued to build at the same time we began to successfully integrate the new capabilities and people associated with our acquisition of the Baring’s Financial Services Group.”