Northern Trust returns to form with Q1 securities lending revenue boost
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Northern Trust returns to form with Q1 securities lending revenue boost 22 April 2020London Reporter: Drew Nicol
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Northern Trust achieved a 3 percent bump in its securities lending revenue in Q1, compared to the same period last year.
The US bank reported earnings of $23.4 million from the first three months of 2020, up from $22.7 million in Q1 2019 and $22.6 million in Q4 2019.
Q1 marks Northern Trust's best quarter for securities lending revenue since Q1 2018 when it chalked up $26 million.
It is a return to form for the bank, which saw its securities lending revenue underperform mildly in 2019 in line with the overall market鈥檚 lacklustre performance compared to 2018鈥檚 bumper year.
Northern Trust averaged quarterly revenue of $21.8 million in 2019, compared to an average quarterly return of $25.5 million in 2018 and $24.1 million in 2017.
Securities lending sits under Northern Trust鈥檚 Corporate and Institutional Services (C&IS) Trust, which offers asset servicing solutions to buy-side institutions.
In 2019, C&IS Trust, investment, and other services fees brought in $2.2 billion, of which securities lending earning represented 4 percent ($87.2 million).
The bank says annual securities lending revenue decreased $14.8 million, or 15 percent, from 2018 to 2019, as a result of lower spreads and loan volumes.
Meanwhile, Northern Trust reported $10.9 trillion assets under custody and administration for Q1 2020, representing a 10 percent decrease from Q4 2019鈥檚 figure of $12.1 trillion.
Total fees from custody and fund administration were recorded at $394.9 million for Q1, down 1 percent from Q4 2019 but an increase of 5 percent in Q1 2019.
According to the Northern Trust, corporate and institutional services custody and fund administration fees decreased primarily due to unfavourable currency translation, partially offset by favourable lagged markets and new business.
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