Northern Trust (NTRS) Barclays 24th Annual Global Financial Services Conference summary

Key strategic developments

• Leadership realignment two years ago led to cross-pollination of expertise and the One Northern Trust strategy, enhancing capital allocation and productivity focus.

• The One Northern Trust approach leverages internal capabilities, especially in alternatives, and has driven successful product launches and digital marketing initiatives.

• Aggressive talent acquisition and retention strategies have been implemented, including new roles and team-based hiring, to support organic growth.

• Expansion of Family Office Solutions (FOS) enables scalable, outsourced family office services for ultra-high-net-worth clients, with strong client conversion rates.

• Focused efforts on building referral networks and high-quality client events to drive growth in the upper-tier wealth market.

Financial performance and outlook

• Institutional deposit balances are tracking seasonally as expected, with no significant changes since the last earnings report.

• Net interest income (NII) outlook was raised to 9%-10% year-over-year growth, with continued growth expected into 2027, though at a slower pace due to tougher comparisons.

• Net interest margin (NIM) is expected to normalize in the 175-180 basis point range, with large institutional deposits causing short-term fluctuations.

• Fee income growth outlook also increased to 9%-10% year-over-year, with a focus on total revenue and strong organic growth in advisory fees, especially at the upper end of the wealth market.

• Operating leverage remains a priority, with expense growth targeted at 5.5% for the year and a focus on maintaining margins while investing for growth.

Technology and innovation

• AI is being leveraged to enhance advisor productivity and client engagement, with a focus on security and productivity use cases.

• New governance processes are in place to prioritize AI investments that drive sustainable productivity gains.

• Digital transformation is a key investment area, with expenses being managed through both OpEx and CapEx.