Northern Trust, the nation's third-largest custody bank, said Wednesday that its third-quarter profit rose 4.9% from the same period last year, to $178.8 million, as improved asset quality and strong fee-income growth more than offset dips in interest income and foreign-exchange income.
Its earnings per share of 73 cents increased 4.3% year over year but fell a penny short of estimates of analysts polled by Bloomberg.
Based in Chicago, Northern Trust has $93.6 billion of assets, $750 billion of assets under management and nearly $4.8 trillion of assets under custody.
Trust, investment and other servicing fees, which account for 62% of revenue, climbed 8% from the same quarter last year, to $601.9 million. The company attributed the increase to new business as well as a reduction in fees waived on money market funds.
Profits were also aided by a 43% decline in the provision for loan losses, to $10 million, as nonperforming assets fell 14%, to $289.6 million.
Income from foreign exchange trading fell 49% year over year, to $44 million, due to currency volatility and a decline in client volumes. Net interest income fell 4%, to $256.9 million, as a result of lower yields on loans and securities investments.
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