Northern Trust reveals YoY increase for AUC/A
21 January 2021 US
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Northern Trust’s total assets under custody/administration (AUC/A) totalled $14.5 trillion for Q4 2020 marking a 21 per cent year-on-year (YoY) increase from its Q4 2019 results.
Breaking the total figure down, total assets under custody stood at $11.2 trillion as of 31 December 2020, while assets under management reached $1.4 trillion.
The Chicago-based bank explains that AUC/A and assets under management are a driver of the Corporation’s trust, investment and other servicing fees, the largest component of noninterest income.
Meanwhile, looking at corporate and institutional services (C&IS) trust, investment and other servicing fees, Northern Trust noted a 5 per cent increase in Q4 2020 when compared to the same period for the year prior.
Overall the total results for C&IS stood at $596.1 million for Q4 2020, which also marks an increase of 2 per cent when compared to Q3 2020’s figure of $584.9 million.
Within this overall $596.1 million figure, custody and fund administration totalled $419.9 million, up 6 per cent respectively compared to both Q4 2019 and Q3 2020.
YoY custody and fund administration fees increased, which the bank says is primarily due to new business, higher transaction volumes, favourable currency translation and markets.
Northern Trust says custody and fund administration fees increased YoY primarily due to new business and favourable currency translation, partially offset by unfavourable non-US markets.
Securities lending decreased in Q4 2020 when compared to the same period for the year prior. For Q4 2020, securities lending came in at $17.6 million, a 22 per cent decrease compared to $22.6 million in Q3 2019. This is also an 11 per cent decrease compared with Q3 2020’s figure of $19.7 million.
According to Northern Trust, securities lending fees decreased due to lower spreads.
The total amount for wealth management trust, investment and other servicing fees stood at $430 million, which is a 1 per cent increase compared to Q4 2019. The figure represents a 3 per cent increase when compared to Q3 2020.
Discussing Q4 2020 versus Q3 2020, Northern Trust says C&IS and Wealth Management trust, investment and other servicing fees are impacted by both one month and one-quarter lagged asset values.
Commenting on the Q4 2020 results, Michael O’Grady, chairman and CEO, says: “Throughout the year, our strong capital base and liquidity profile enabled us to continue to support the needs of our clients.”
“Full year 2020 performance resulted in revenue consistent with the prior year. Execution on our growth strategies and overall favourable equity markets drove fees and other non-interest income growth of 6 per cent, while net interest income declined by 14 per cent in 2020 due to persistently low interest rates.”
O’Grady concludes: “During the fourth quarter we recognized a charge of $55.0 million associated with a reduction in force, which will allow us to improve the alignment of our operational expenses with the current economic environment. We continue to focus on serving our clients with excellence, executing on our long-term priorities, driving operating efficiency and investing wisely for future profitable growth to deliver long-term value to our various stakeholders.”
Other industry players such as State Street, BNY Mellon, and Citi have also revealed their Q4 2020 results.
Breaking the total figure down, total assets under custody stood at $11.2 trillion as of 31 December 2020, while assets under management reached $1.4 trillion.
The Chicago-based bank explains that AUC/A and assets under management are a driver of the Corporation’s trust, investment and other servicing fees, the largest component of noninterest income.
Meanwhile, looking at corporate and institutional services (C&IS) trust, investment and other servicing fees, Northern Trust noted a 5 per cent increase in Q4 2020 when compared to the same period for the year prior.
Overall the total results for C&IS stood at $596.1 million for Q4 2020, which also marks an increase of 2 per cent when compared to Q3 2020’s figure of $584.9 million.
Within this overall $596.1 million figure, custody and fund administration totalled $419.9 million, up 6 per cent respectively compared to both Q4 2019 and Q3 2020.
YoY custody and fund administration fees increased, which the bank says is primarily due to new business, higher transaction volumes, favourable currency translation and markets.
Northern Trust says custody and fund administration fees increased YoY primarily due to new business and favourable currency translation, partially offset by unfavourable non-US markets.
Securities lending decreased in Q4 2020 when compared to the same period for the year prior. For Q4 2020, securities lending came in at $17.6 million, a 22 per cent decrease compared to $22.6 million in Q3 2019. This is also an 11 per cent decrease compared with Q3 2020’s figure of $19.7 million.
According to Northern Trust, securities lending fees decreased due to lower spreads.
The total amount for wealth management trust, investment and other servicing fees stood at $430 million, which is a 1 per cent increase compared to Q4 2019. The figure represents a 3 per cent increase when compared to Q3 2020.
Discussing Q4 2020 versus Q3 2020, Northern Trust says C&IS and Wealth Management trust, investment and other servicing fees are impacted by both one month and one-quarter lagged asset values.
Commenting on the Q4 2020 results, Michael O’Grady, chairman and CEO, says: “Throughout the year, our strong capital base and liquidity profile enabled us to continue to support the needs of our clients.”
“Full year 2020 performance resulted in revenue consistent with the prior year. Execution on our growth strategies and overall favourable equity markets drove fees and other non-interest income growth of 6 per cent, while net interest income declined by 14 per cent in 2020 due to persistently low interest rates.”
O’Grady concludes: “During the fourth quarter we recognized a charge of $55.0 million associated with a reduction in force, which will allow us to improve the alignment of our operational expenses with the current economic environment. We continue to focus on serving our clients with excellence, executing on our long-term priorities, driving operating efficiency and investing wisely for future profitable growth to deliver long-term value to our various stakeholders.”
Other industry players such as State Street, BNY Mellon, and Citi have also revealed their Q4 2020 results.
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