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Money Management

Northern Trust’s AUM down for quarter, year

Northern Trust Corp. reported $1.07 trillion in assets under management as of Dec. 31, down 8.8% from Sept. 30 and down 7.9% from Dec. 31, 2017, the company said in its earnings statement Wednesday.

Northern Trust reported $791 billion in corporate and institutional assets under management as of Dec. 31, down 9.7% from three months earlier and down 9.2% from 12 months earlier.

Wealth management AUM totaled $279 billion, a decrease of 5.7% from Sept. 30 and down 3.8% from Dec. 31, 2017.

Northern Trust does not report net flows.

Fourth-quarter investment management fees totaled $105 million, down 3.7% from the third quarter and down 0.9% from the fourth quarter of 2017.

Assets under custody and administration totaled $10.125 trillion, a 6.5% decrease from Sept. 30 and a 5.6% decrease from Dec. 31, 2017. Custody and fund administration fees of $376 million in the fourth quarter were up a slight 0.3% from the third quarter and up 1.9% from the fourth quarter of 2017.

Northern Trust's overall revenue in the quarter ended Dec. 31 totaled $1.517 billion, up 2.2% from the previous quarter and 5.3% higher than the year-earlier quarter.

Net income of $410 million in the quarter increased 9.3% from the third quarter and was up 14.8% from the fourth quarter of 2017.

Northern Trust's fourth-quarter results included a $5.7 million charge related to severance and restructuring, Mr. Bowman said in his presentation to analysts.

Investment management fees generated by Northern Trust Asset Management, the bank's investment management unit, declined in the year ended Dec. 31, primarily because of net outflows, said Stephen "Biff" Bowman, chief financial officer, during a conference call with analysts Wednesday.

Michael O'Grady, Northern Trust's chairman, president and CEO, said on the call that many of the firm's large institutional investor clients are reconsidering their mix of internally and externally managed investment strategies. Northern Trust's asset servicing unit is assisting investors moving more assets to internally managed strategies with real-time data.

In response to analyst questions, Mr. O'Grady said Northern Trust Asset Management is focused on generating higher organic growth through its exchange-traded funds and actively managed quantitative strategies.

The company's assets under custody as of Dec. 31 totaled $7.594 trillion, down 7.3% from three months earlier and down 6.1% from a year earlier.

The decline in custody assets in the fourth quarter was substantially due to the departure of a large, unnamed U.S. corporate client, Mr. Bowman told analysts on the call. The client had a large cash account under custody with the bank.