Northern Trust Reports 26% Revenue Decline in Q2 2025 Amid Noninterest Income Drop

Northern Trust Corporation reported a significant decline in financial performance for the second quarter of 2025, with total revenue decreasing by 26% to $1.998 billion compared to $2.716 billion in the same period last year. The decline was primarily driven by a 37% drop in noninterest income, which fell to $1.387 billion from $2.193 billion, largely due to the absence of a substantial gain from the Visa Exchange Offer recorded in the previous year. However, net interest income increased by 17% to $610.5 million, supported by higher deposits and lower funding costs.

For the first half of 2025, total revenue also decreased by 10% to $3.938 billion, down from $4.362 billion in the prior year. Noninterest income for this period fell 17% to $2.759 billion, while net interest income rose 12% to $1.179 billion. The provision for credit losses increased to $17.5 million from a negative $0.5 million in the prior year, reflecting a more cautious outlook amid economic uncertainties.

Operationally, Northern Trust saw an increase in total assets, which rose 11% to $171.9 billion as of June 30, 2025, compared to $155.5 billion at the end of 2024. Deposits also grew by 12% to $137.1 billion, indicating a strong client base and increased engagement. The company reported a total of $14.244 billion in assets under custody, up 7% from the previous year, and $1.698 billion in assets under management, reflecting a 6% increase. The average number of employees increased slightly, contributing to a total noninterest expense reduction of 8% to $1.417 billion for the quarter.

Looking ahead, Northern Trust's management expressed a cautious but optimistic outlook, emphasizing the importance of maintaining strong capital ratios, which remain above regulatory requirements. The company is focused on navigating the current economic landscape while continuing to invest in technology and client services. The effective tax rate for the quarter was reported at 25.4%, down from 23.6% in the prior year, reflecting changes in tax legislation and the resolution of state income tax audits. Overall, Northern Trust aims to leverage its strong balance sheet and client relationships to drive future growth despite the challenges posed by market volatility.