Northern Trust’s Q2 lending revenue stutters 24 July 2017New York Reporter: Drew Nicol
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Northern Trust saw its securities lending earnings fall to $24.6 million in Q2.
Quarterly earning hit $24.6 million in Q2, down from $26.8 million in 2016. The total was also 3 percent less than the bank’s takings in Q1, worth $23.8 billion.
Northern Trust cited lower spreads, partially offset by increased loan volumes in the current quarter, as the main driver for the decrease in revenue.
The bank also highlighted a pre-tax charge relating to the settlement of litigation worth $46.5 million.
The litigation involved the settlement of accusations of mismanagement of US public pension funds assets in relating to the bank's securities lending practices for those assets
Northern Trust’s securities lending business comes under its custody, investment and other servicing fees, known as C&IS trust.
Other than securities lending, C&IS fees increased thanks to new business wins, including the recent GuideStone Funds mandate. The asset manager and financial adviser for evangelical Christian churches chose Northern Trust for global custody services, fund accounting and fund administration.
GuideStone Funds has 26 registered mutual funds with $11.6 billion in assets under management, as of 30 June.
Texas-based GuideStone Funds is a subsidiary of GuideStone Financial Resources, a financial service providing retirement, investment and life and health plans to evangelical Christian churches, educational institutions and ministry organisations.
“Northern Trust’s mutual fund expertise and dedicated client service, combined with an industry-leading global technology platform, will provide strong support for our investment strategies as well as our objectives,” said John Jones, president of GuideStone Funds.
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