Chicago-based asset and wealth manager Northern Trust (NTRS.O) exceeded Wall Street’s first-quarter profit estimates on Tuesday, sending its shares up more than 5.5%. The firm, which services assets for institutional clients globally, benefits significantly from heightened market activity and portfolio reshuffling. This robust performance was primarily driven by strong market conditions that boosted assets under custody and administration, alongside a substantial increase in fee income.
Northern Trust reported a profit of US$2.71 per share, comfortably surpassing analysts’ average estimate of US$2.32, according to LSEG data. Total revenue for the quarter rose to US$2.21 billion, also outperforming expectations of US$2.13 billion. CEO Michael O’Grady noted during a call with analysts that the past quarter provided a “very constructive environment,” adding that “the level of volatility is attractive for our capital markets business.” Market swings across asset classes, partly influenced by geopolitical events, have spurred increased trading activity as investors adjust portfolios.
The company’s assets under custody and administration saw a 10% increase to US$18.55 trillion as of March 31, while assets under management reached US$1.78 trillion. Fee income jumped 11% to US$1.34 billion, reflecting higher transaction volumes. Net interest income, representing the difference between what the bank earns on assets and pays on liabilities, surged 15% in the quarter to US$662 million. These results mirrored those of peers BNY (BK.N) and State Street (STT.N), which also reported higher profits, aided by volatile markets. Northern Trust’s shares have gained over 16% so far this year, following substantial gains in the prior period.
