(Reuters) – Northern Trust reported a more than fourfold rise in fourth-quarter profit on Thursday, beating Wall Street estimates, as a rebounding stock market boosted the asset manager’s income from asset management and management.
Investors have poured money into the stock markets hoping to reap a windfall from the Trump administration’s potential tax cuts and business-friendly policies.
This has led to a market recovery and increased the value of assets under management (AUM) and associated fees earned by companies such as Northern Trust, which manages assets for ultra-high net worth families, individuals and institutions.
The Chicago, Illinois-based asset manager’s trust, investment and other management fees rose 12% to $1.22 billion in the fourth quarter from a year ago, while assets under custody or management rose 9% to $16.79 trillion.
Net interest income (NII) – the difference between what it earns on assets and what it pays out on liabilities – rose 15% in the fourth quarter to $574.3 million.
Northern Trust’s quarterly profit, allocated to common and potential common shares, came to $447 million, or $2.26 per share, compared with $106.5 million, or 52 cents, a year earlier.
Analysts on average expected earnings of $2.02 per share, according to data compiled by LSEG.
Currency trading revenues rose 26% to $61.7 million, driven by higher trading volumes.
In the fourth quarter of 2023, Northern Trust had recorded certain one-time charges related to the Federal Deposit Insurance Corp’s deposit insurance fund and a $176.4 million loss on the sale of debt securities during portfolio repositioning.
Peers State Street and BNY also reported a rise in profits last week, boosted by a rise in their fee-based income from managing clients’ assets.
(Reporting by Ateev Bhandari and Prakhar Srivastava in Bengaluru; Editing by Shreya Biswas)