Northern Trust Records Net Income of $327.8M with 17% YoY Decline for Q3 2023

Northern Trust, a leading financial services company, unveiled its financial results for the third quarter of 2023 (Q3 2023), reporting the net income of $327.8 million, 17% lower than $394.8 million in Q3 2022 and 1% lower than $331.8 million in Q3 2022. Net income per diluted common share was $1.49, down 4% compared to $1.56 in Q2 2023 and down 17% compared $1.80 in Q3 2022.

Total revenue for the three months came in at $1.740 billion, reflecting a marginal decrease of 2% compared to $1.770 billion in Q2 2023 and $1.767 billion in Q3 2022.

More specifically, revenue from Trust, Investment and Other Servicing fees totaled $1.112 billion, rising by 1% compared to $1.096 billion in the prior quarter and rising by 3% compared to $1.079 billion in the quarter a year ago.

Net interest income on an FTE (Fully Taxable Equivalent) basis amounted to $469.4 million, dropping by 10% compared to $524.6 million in the previous quarter and dropping by 11% compared to $525.3 million in Q3 of last year. The net interest margin on an FTE basis was 1.45%, 12 bps lower on a quarterly basis and 13 bps lower on a yearly basis. Meanwhile, the average earning assets stood at $128.254 billion, down 4% compared to $134.116 billion in the prior quarter and down 3% compared to $132.147 billion in the same quarter of 2022.

Other noninterest income totaled $158.4 million for the quarter, up 6% QoQ (Q2 2023: $149.3 million) and down 3% YoY (Q3 2022: $163.1 million). Among tham, forex trading income reported $51.8 million for the period, 3% higher than $50.1 million in Q2 2023 but 20% lower than $64.7 million in Q3 2022. Treasury Management Fees were $7.5 million, 6% lower than $7.9 million in Q2 2023 and 18% lower than $9.3 million in Q3 2022. Security commissions and trading income was $30.9 million, 14% lower than $36.1 million in Q2 2023 and 4% lower than $32.1 million in Q3 2022. Other operating income was $68.2 million, 23% higher than $55.2 million in Q2 2023 and 19% higher than $57.3 million in Q3 2022.

Michael O'Grady, Chairman and Chief Executive Officer at Northern Trust, commented: "Northern Trust's third quarter results showcased the resilience of our business model in the midst of a challenging stage of this unprecedented interest rate cycle. We grew trust fees, expanded our client base, made further progress on our productivity initiatives, and enhanced our regulatory capital metrics. Our foundation remains strong and clients continue to place their trust in us. We are successfully navigating the challenging operating environment while positioning the company to capitalize on growth opportunities that will deliver value for our shareholders over the long term."