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Northern Trust Corp - Stock Quote NTRS

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Morningstar's Northern Trust Corp Stock Analysis

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Bank Stress Tests 2022; Higher Stress Capital Buffers Likely Loom

Eric Compton, CFA Senior Equity Analyst

Analyst Note

| Eric Compton, CFA |

We went into this year’s Federal Reserve bank stress tests expecting a bit more pressure on stress capital buffers as multiple banks had warned in the preceding quarter that their SCB was likely to increase. This is indeed what played out, as we estimate that roughly seven of the 20 U.S. banks we cover that participated this year are likely to see a higher SCB once the assigned SCBs become official. It appears that JPMorgan, Bank of America, and Citigroup are all likely to see increases to their SCBs of close to 1% each. The biggest increase seems likely to come from M&T Bank, which we expect to increase close to 2.2%, going from 2.5% to roughly 4.7%. Meanwhile, we expect the SCB for 11 of the 20 U.S. banks we cover to remain stable, including for Wells Fargo, which had previously warned that their SCB could go up, so this is a slight positive surprise for the bank in our view. Finally, we think Goldman Sachs could see a slight decrease to its current SCB of 6.2%, potentially declining to 6%, while Discover could see a more material decline, going from 3.6% to 2.5%.

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Northern Trust Corp's Company Profile

Business Description

Northern Trust is a leading provider of wealth management, asset servicing, asset management, and banking to corporations, institutions, affluent families, and individuals. Founded in Chicago in 1889, Northern Trust has offices in 20 states and Washington, D.C., in the United States and 23 locations in Canada, Europe, the Middle East, and Asia-Pacific. As of Dec. 30, 2021, Northern Trust had assets under custody or administration of $16.2 trillion and assets under management of $1.6 trillion.

Contact
50 South La Salle Street
Chicago, IL, 60603
T +1 312 630-6000
Sector Financial Services
Industry Asset Management
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2022
Stock Type Cyclical
Employees 21,100

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