(Bloomberg) -- Northern Trust Corp., the third- biggest independent U.S. custody bank, said first-quarter profit rose 1.7 percent as stock-market gains boosted the value of assets the company oversees.
Net income increased to $164 million, or 67 cents per diluted share, from $161.2 million, or 66 cents a share, a year earlier, the Chicago-based company said today in a statement. Results missed the 72-cent average estimate of 16 analysts surveyed by Bloomberg.
“We have a better macro backdrop with higher market levels this quarter, and we saw good organic growth across all three” of the largest publicly listed custody banks, Brian Bedell, a New York-based analyst at ISI Group Inc., said in an interview before results were released.
The custody banks, under pressure to improve profitability hurt by record-low interest rates, are benefiting as global equity markets climb for the second straight year. Northern Trust, led by Chairman and Chief Executive Officer Frederick H. Waddell, followed larger rivals Bank of New York Mellon Corp. and State Street Corp. with job cuts in 2012 that, combined with technology initiatives, are designed to increase annual pretax income by $250 million by the end of this year.
Assets under custody rose 9.3 percent from a year earlier to $5.02 trillion, helped by a 14 percent gain by the Standard & Poor’s 500 Index of U.S. stocks, including reinvested dividends, in the same period. The amount of money Northern Trust invests for clients rose 13 percent to $810.2 million.
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