Magazine article American Banker

Stocks: Northern Trust Earnings Allay Slowdown Worries

Magazine article American Banker

Stocks: Northern Trust Earnings Allay Slowdown Worries

Article excerpt

Northern Trust Co.'s earnings report Monday put to rest fears that the company would be hurt by a slowdown in the trust business.

Such fears were fanned by State Street Corp.'s earnings report and a conference call with analysts last week in which Boston-based State Street signaled a slowdown in revenues.

Northern Trust, which is based in Chicago, reported net income of $99.7 million, up 14% from a year earlier, and beat analysts estimates of 85 cents a share by a penny.

Northern Trust had fallen in tandem with State Street's, but the report helped lift the Chicago company's shares by 0.14%, to $90.5625, on a generally poor day for bank stocks.

"It was a very solid quarter," said Nancy Bush, a banking analyst with Ryan, Beck & Co. "They continue to have a strong pipeline of new business coming in."

Ms. Bush said that State Street and Northern Trust once were much more alike, but that State Street branched out into technology while Northern Trust embraced the personal, high-touch trust side of the business.

Northern Trust's chief financial officer, Perry Pero, did not mention State Street by name, but pointed out that unlike "another company" Northern Trust has a very large personal trust operation and that business accounted for 54% of revenues in the second quarter.

The earnings were satisfactory to analysts, who panned State Street's earnings report last week, saying the company was masking a slowdown in revenues with a one-time gain from another business area. …

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