July 16--Northern Trust Corp., Chicago's biggest locally headquartered bank, said it plans to cut 200 jobs across the company in coming quarters.
On Wednesday, Northern Trust said second-quarter profit was dinged by $28.5 million in severance costs. It otherwise exceeded analysts' expectations for earnings.
The company has been under pressure to cut expenses. In 2012 it cut 700 jobs globally.
"Expected cost savings will allow the company to simultaneously increase profitability and invest in the future growth" opportunities, Chief Financial Officer Michael O'Grady told analysts Wednesday.
It couldn't immediately be determined how many of the 200 cuts will be local.
Net income was $181.9 million, or 75 cents a common share, in the second quarter, compared with $191.1 million, or 78 cents a share, in the same period last year.
Excluding $42.3 million in charges related to severance, as well as reducing its amount of office space and writing off software that was replaced, Northern Trust would have earned $209.9 million, or 87 cents a share.
Analysts were expecting it to earn 84 cents a share.
In late morning trading, Northern Trust stock was basically flat, mirroring the market.
Compensation expense, the company's biggest cost not related to interest, was $372.4 million in the quarter, up 14 percent from the same period a year ago. Full-time staffing was 15,100, up 4 percent from a year ago.
Revenue was $1.08 billion, up 6 percent.
Assets under custody and assets under management are primary drivers of Northern Trust's investment and servicing fees. Northern Trust had $924.4 billion in assets under management as of June 30, up 15 percent from the same period a year ago.
As a result, its trust, investment and servicing fees were up, primarily due to a hotter stock market and new business, but partly offset by Northern Trust waiving more customer fees due to persistently low interest rates.
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