Northern Trust’s Q4 2018 results revealed that custody and fund administration fees, the largest component of corporate and institutional services (C&IS), were up $376 million, 2 percent, compared to the year prior and flat on a sequential basis.
Both the year-over-year and sequential performances were driven by new business, partially offset by the impacts of currency exchange rates and markets, it was revealed during the Q4 2018 conference call.
Assets under custody and administration for C&IS clients were $9.5 trillion at quarter end, down 6 percent year-over-year and down 7 percent sequentially.
Both the year-over-year and sequential declines were primarily driven by lower equity markets, and the impact of unfavourable moves in the currency exchanges rates, as well as the impact of one large domestic custody client, transitioning out during that quarter.
Meanwhile, return on average common equity was at 17 percent for the quarter, up from 15.1 percent in both the prior and prior year quarter.”
Assets under custody and administration of $10.1 trillion declined 6 percent compared to one year ago, and were down 7 percent on a sequential basis. Assets under custody of $7.6 trillion also declined 6 percent compared to one year ago, and were down 7 percent on a sequential basis.
Commenting on Northern Trust’s 2018 Q4 results, Michael O’Grady, chairman and CEO, commented: “Northern Trust’s performance in the fourth quarter 2018 produced revenue growth of 6 percent and earnings per share growth of 19 percent compared to the prior year.”
“For the full year 2018, the Company generated revenue growth of 11, earnings per
share growth of 35 percent and a return on average common equity of 16.2 percent. Our full year results also produced positive fee and total operating leverage, and solid improvements in profitability and returns.”
“We announced yesterday that we are increasing our quarterly dividend to $0.60 per share, representing an increase of 9 percent from the prior quarter and 43 percent compared to one year ago.”
He added: “During 2018, we returned a record $1.4 billion to common shareholders through dividends and the repurchase of 9.0 million shares. As we enter 2019, we remain focused on providing our clients with exceptional service, improving our productivity, and investing in future growth.”
