Back to top

Analyst Blog

Zacks Equity Research

Northern Trust Grows UK Pension Biz


 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at or call 800-767-3771 ext.  9339.

Northern Trust Corporation’s (NTRS - Analyst Report) has broadened its footprint in the UK pensions arena by adding $26 billion in assets under custody for new UK pension fund clients during 2011. This was driven by 13 significant new client wins. It included $5 billion Lothian pension fund, $7.5 billion Lancashire County Council and $2.4 billion SAUL (Superannuation Arrangements of University of London) Trustee Company.

Despite the challenging economic environment, Northern Trust continued to focus even more aggressively on initiating new businesses in 2011. The launch of innovative data and product solutions suite to support clients’ regulatory requirements was the catalyst behind Northern Trust’s expanding U.K. pension fund business. Specifically, in 2011 the company launched its Institutional Governance Services, which is a part of Northern Trust’s Retirement Solutions Practice.

Notably, Northern Trust offers custody and associated services to around 34% of the top 200 pension funds in the UK and 36% of all UK Local Government Pension Schemes. On behalf of new UK pension fund clients, the company has added over $80 billion in assets under custody in the last three years.

Earnings Recap

In January 2012, Northern Trust reported its fourth quarter 2011 financial results. The company’s earnings of 67 cents per share missed the Zacks Consensus Estimate by a penny. In that quarter, earnings were impacted by restructuring, acquisition, and integration related expenses, though partially offset by a benefit from the reduction of an indemnification liability related to Visa Inc. (V - Analyst Report).

Overall, results were marked by higher net interest income and strong new business. Improved credit quality and increase in average earning assets acted as positives for the company.

Our Take

We expect Northern Trust to experience an increase in asset management and servicing fees based on equity markets improvement and higher volumes. For supporting the new investment activities, management is also taking steps to tackle expense growth.Improved credit quality and increase in average earning assets also serve as positive factors for the stock. However, the Dodd-Frank Act will ring in numerous regulatory changes over the next several years, which eventually might act as deterrents to the company’s growth.

Northern Trust currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. Considering the fundamentals, we also maintain a long-term Neutral recommendation on the stock.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
BITAUTO HOLD BITA 35.33 +14.82%
ANI PHARMACE ANIP 24.79 +14.66%
E HOUSECHINA EJ 10.99 +9.24%
CANADIAN SOL CSIQ 26.97 +7.15%