Northern Trust sees YoY revenue growth
22 January 2021 US
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Northern Trust has continued the trend of lenders achieving modest year-on-year (YoY) growth for 2020 despite lacklustre returns in Q4.
Full-year earnings for 2020 hit $88 million, up from $87.2 million in 2019, but below the greater than $100 million annual revenue seen in each of the prior three years.
Q4 2020 revenue reached $17.6 million, down 11 per cent from the previous quarter ($19.7 million) and 22 per cent from the final months of 2019 ($22.6 million).
Earnings from the last quarter of 2020 also represent the second consecutive quarter that Northern Trust has failed to bring in more than $20 million, a benchmark it had met in every previous quarter since at least 2016.
In its latest earnings report, the Chicago-based bank says the securities lending fees decrease, both YoY and sequentially, was primarily due to lower spreads.
Northern Trust’s figures mirror the experience of much of the lender community that saw bumper returns in Q2 largely offset softer returns throughout the rest of the year, leading to modest overall YoY growth.
For Northern Trust, securities lending revenue in Q2 represented the highest figure since Q2 2018 when it brought in $30.2 million.
In a research note, Sam Pierson, director of securities finance at IHS Markit, highlights that peak monthly revenue for 2020 was observed in June, when a trio of US equities delivered “outstanding lending returns” on the back of corporate action related arbitrage opportunities.
Globally, securities lending revenue for 2020 was $9.3 billion down 7 per cent compared to 2019, according to IHS Markit data.
Full-year earnings for 2020 hit $88 million, up from $87.2 million in 2019, but below the greater than $100 million annual revenue seen in each of the prior three years.
Q4 2020 revenue reached $17.6 million, down 11 per cent from the previous quarter ($19.7 million) and 22 per cent from the final months of 2019 ($22.6 million).
Earnings from the last quarter of 2020 also represent the second consecutive quarter that Northern Trust has failed to bring in more than $20 million, a benchmark it had met in every previous quarter since at least 2016.
In its latest earnings report, the Chicago-based bank says the securities lending fees decrease, both YoY and sequentially, was primarily due to lower spreads.
Northern Trust’s figures mirror the experience of much of the lender community that saw bumper returns in Q2 largely offset softer returns throughout the rest of the year, leading to modest overall YoY growth.
For Northern Trust, securities lending revenue in Q2 represented the highest figure since Q2 2018 when it brought in $30.2 million.
In a research note, Sam Pierson, director of securities finance at IHS Markit, highlights that peak monthly revenue for 2020 was observed in June, when a trio of US equities delivered “outstanding lending returns” on the back of corporate action related arbitrage opportunities.
Globally, securities lending revenue for 2020 was $9.3 billion down 7 per cent compared to 2019, according to IHS Markit data.
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