Reuters: Global Markets: Northern Trust results below expectations; shares fall

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Northern Trust results below expectations; shares fall Jul 18th 2012, 15:18 Wed Jul 18, 2012 11:18am EDT (Reuters) - Northern Trust Corp (NTRS.O) reported second-quarter results that fell short of Wall Street expectations, sending its shares down 2.5 percent. Like its larger peers Bank of New York Mellon Corp (BK.N) and State Street Corp (STT.N), Northern Trust experienced a sharp decline in foreign exchange trading revenue. But net income rose 18 percent on higher custody and fund administration fees. Net income was $179.6 million, or 73 cents a share, up from $152 million, or 62 cents a share, a year earlier. Analysts, on average, expected 75 cents a share, according to Thomson Reuters I/B/E/S. Revenue was $988.5 million, up from $945 million in the year-ago period but just shy of the $1 billion estimate of analysts. Custody and administration fees rose 13 percent to $215 million, while assets under custody rose 3 percent to $4.56 trillion. Forex revenue was $59.4 million, down 27 percent from a year earlier. Like its peers, Northern Trust cited weak capital market activity and decreased volatility. The bank reported $55.3 billion in interest-bearing deposits at the end of June, a decline of 9 percent from year-earlier levels. Net interest income in the quarter rose 3 percent to $264.3 million as the bank used a higher percentage of noninterest-bearing deposits to fund loans and other investments. Net interest margin was 1.28 percent, up from 1.23 percent a year ago. Noninterest-bearing deposits totaled $21.7 billion in the quarter, up 30 percent from year-ago levels. Northern Trust shares were down $1.16 to $45.91 in late-morning trading. (Reporting By Tim McLaughlin; editing by Jeffrey Benkoe and John Wallace) Link this Share this Digg this Email Reprints

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