Northern Trust's Q4 2024: Conflicting Signals on Expense Control, Operational Efficiency, and Deposit Trends
Earnings DecryptThursday, Jan 23, 2025 8:01 pm ET
1min readStrong Financial Performance:
- Northern Trust Corporation reported net income of $455 million for the fourth quarter, with earnings per share of $2.26, and a 15.3% return on equity.
- Revenue grew by 13% year-over-year, while expenses were up 5.5%, resulting in positive trust fee and total operating leverage.
- The growth was supported by strong market performance and progress in implementing the One Northern Trust strategy.
Asset Management Growth:
- Asset Management reported positive inflows for the year, with 13% growth in liquidity assets surpassing $300 billion in AUM, and positive long-term flows in the second half of the year.
- This growth was driven by strategic investments in the platform and products, leveraging cross-functional capabilities, and aligning with secular industry trends.
Wealth Management Expansion:
- Wealth Management reported An increase in wealth deposits by 9% and expanded its segment pretax margin by nearly 400 basis points year-over-year.
- This was due to foundational investments in sales talent, lead flow channels, and key strategic hires, leading to a steady improvement in organic growth trajectory.
Asset Servicing Business Strategy:
- The Asset Servicing business achieved a 9% year-over-year increase in assets under custody and administration, with Custody and Fund Administration fees up 9%.
- The strategic pivot to pursue scalable growth and disciplined criteria for new business generation led to improved organic growth and positive operating leverage.
- Northern Trust Corporation reported net income of $455 million for the fourth quarter, with earnings per share of $2.26, and a 15.3% return on equity.
- Revenue grew by 13% year-over-year, while expenses were up 5.5%, resulting in positive trust fee and total operating leverage.
- The growth was supported by strong market performance and progress in implementing the One Northern Trust strategy.
Asset Management Growth:
- Asset Management reported positive inflows for the year, with 13% growth in liquidity assets surpassing $300 billion in AUM, and positive long-term flows in the second half of the year.
- This growth was driven by strategic investments in the platform and products, leveraging cross-functional capabilities, and aligning with secular industry trends.
Wealth Management Expansion:
- Wealth Management reported An increase in wealth deposits by 9% and expanded its segment pretax margin by nearly 400 basis points year-over-year.
- This was due to foundational investments in sales talent, lead flow channels, and key strategic hires, leading to a steady improvement in organic growth trajectory.
Asset Servicing Business Strategy:
- The Asset Servicing business achieved a 9% year-over-year increase in assets under custody and administration, with Custody and Fund Administration fees up 9%.
- The strategic pivot to pursue scalable growth and disciplined criteria for new business generation led to improved organic growth and positive operating leverage.
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