U.S. custody bank and wealth manager Northern Trust Corp on Wednesday reported a slight increase in third-quarter net income,missing analysts’ estimates,as foreign exchange revenue plummeted.
Nomura Securities analyst Glenn Schorr said the bank made good progress on cutting expenses but revenue in the quarter was sluggish.
Consolidated revenue at Northern Trust was about flat at $972.5 million. Custody fund and administration fees were a bright spot,rising 4 percent as the bank won new business. Assets under custody climbed 14 percent to $4.76 trillion from year-ago levels.
Northern Trust reported net income of $178.8 million,or 73 cents a share,compared with $170 million,or 70 cents a share,a year earlier.
Analysts on average were expecting a profit of 74 cents a share,according to Thomson Reuters I/B/E/S.
Chicago-based Northern Trust said revenue from forex trading fell 49 percent to $44 million due to lower volatility in currency markets and client volumes. Larger rivals BNY Mellon Corp and State Street Corp also reported similar forex trends that weighed on their third-quarter results.
Northern Trust shares rose 33 cents to $47.86 in Wednesday morning trading. The stock is up 29 percent over the past year,lagging the performance of larger U.S. custody banks. Shares of BNY Mellon Corp and State Street are up 34 percent and 31 percent,respectively,during that time period.