![]() Service Expertise Integrity Service Expertise Integrity P R I N C I P L E S T H A T E N D U R E Service Expertise Integrity Service Expertise Integrity P R I N C I P L E S T H A T E N D U R E Northern Trust Corporation Frederick H. Waddell Chairman & Chief Executive Officer Barclays Capital 2011 Global Financial Services Conference Hilton New York New York City September 13, 2011 EXHIBIT 99.1 northerntrust.com © 2011 Northern Trust Corporation |
![]() 2 Barclays Capital 2011 Global Financial Services Conference Forward Looking Statement This presentation may include forward-looking statements such as statements that relate to Northern Trust’s financial goals, capital adequacy, dividend policy, expansion and business development plans, risk management policies, anticipated expense levels and projected profit improvements, business prospects and positioning with respect to market, demographic and pricing trends, strategic initiatives, re-engineering and outsourcing activities, new business results and outlook, changes in securities market prices, credit quality including reserve levels, planned capital expenditures and technology spending, anticipated tax benefits and expenses, and the effects of any extraordinary events and various other matters (including developments with respect to litigation, other contingent liabilities and obligations, and regulation involving Northern Trust and changes in accounting policies, standards and interpretations) on Northern Trust’s business and results. These statements speak of Northern Trust’s plans, goals, targets, strategies, beliefs, and expectations, and refer to estimates or use similar terms. Actual results could differ materially from those indicated by these statements because the realization of those results is subject to many risks and uncertainties. Our 2010 annual report and periodic reports to the SEC contain information about specific factors that could cause actual results to differ, and you are urged to read them. Northern Trust disclaims any continuing accuracy of the information provided in this presentation after today. |
![]() 3 Barclays Capital 2011 Global Financial Services Conference Agenda Northern Trust Corporation Strategic & Financial Positioning Adapting to the Environment |
![]() 4 Barclays Capital 2011 Global Financial Services Conference Founded in 1889, Northern Trust Corporation is a global leader in asset management and asset servicing for institutional and personal clients. Operations & Technology: Integrated global operating platform Personal Financial Services: Leading advisor to affluent market Corporate & Institutional Services: Leading global custodian Northern Trust Global Investments: Leading asset manager for personal & institutional clients As of June 30, 2011 Client Centric, Highly Focused Business Model Personal Clients Institutional Clients Integrated Operations & Technology Platform Asset Servicing Asset Management $4.4T Assets Under Custody $684B Assets Under Mgmt. $172 billion AUM $388 billion AUC $4.0 trillion AUC $512 billion AUM $684 billion AUM Serving personal and institutional clients $1.4 billion in technology spending, 2008-2010 |
![]() 5 Barclays Capital 2011 Global Financial Services Conference Excellent strategic positioning Outstanding client base Strong and supportive demographic trends Continued globalization fueling international growth The strategic businesses that Northern Trust has focused on – consistently for many years – continue to offer compelling and attractive growth opportunities. Client Centric, Highly Focused Business Model Personal Clients Institutional Clients Integrated Operations & Technology Platform Asset Servicing Asset Management $4.4T Assets Under Custody $684B Assets Under Mgmt. As of June 30, 2011 |
![]() 6 Barclays Capital 2011 Global Financial Services Conference Network of PFS Offices in 18 States Over 50% of the U.S. millionaire market resides within a 45-minute drive of Northern Trust offices. Personal Financial Services Extensive Reach in the Affluent Market PFS Assets Under Management ($ Billions) Best Private Bank in North America… For Family Office Services For Trust Services For Inheritance and Succession Planning – Euromoney Magazine (February 2010) Best Private Bank in North America – Financial Times Group (November 2010 and November 2009) Ranked among the Top 10 Wealth Managers – Barron’s (September 2010) Serving More than 20% of Forbes 400 Most Affluent Americans – Forbes (September 2010) CAGR +7% S&P500 CAGR +1% Washington, D.C. (1) New York (1) Connecticut (1) Delaware (1) Massachusetts (1) Florida (25) Texas (7) Arizona (6) Illinois (15) Colorado (1) Nevada (1) Missouri (1) Washington (1) Michigan (3) California (10) Georgia (1) Wisconsin (1) Ohio (1) Minnesota (1) |
![]() 7 Barclays Capital 2011 Global Financial Services Conference The Americas CAGR +11% S&P500 CAGR +1% US$EAFE CAGR +4% Europe, Middle East, and Africa Asia Pacific Corporate & Institutional Services Positioned Globally for Growth Strategically Positioned in Three Dynamic Regions Custodian of the Year – Professional Pensions UK Pensions Awards (May 2011 and April 2010) Best Global Custodian – AsianInvestor (November 2010) Best Global Investor Services House – Euromoney (Sept. 2011 and July 2010) Client Relationship Manager of the Year – Americas – International Custody & Fund Administration (June 2011 and May 2010) Global Custodian of the Year – Global Pensions (March 2011) C&IS Assets Under Custody ($ Trillions) |
![]() 8 Barclays Capital 2011 Global Financial Services Conference Assets Under Management: $684.1 Billion A Diversified Asset Manager Across Asset Classes Across Client Segments Across Styles Northern Trust Global Investments Client Focused, Diversified Investment Manager Manager of the Year – Equity Indexers (U.S.) Institutional Investor (April 2011) 13 Largest Manager of Worldwide Institutional Assets 17 Largest Asset Manager Worldwide 3 Largest Passive International Indexed Securities Manager As of June 30, 2011 $44 Billion (6%) $328 Billion (48%) Active $296 Billion (43%) Index Manager of Managers $512 Billion Institutional $172 Billion Personal Equities $306 Billion (45%) Fixed Income $123 Billion (18%) Short Duration $237 Billion (34%) Other $18 Billion (3%) Other $16 BN (3%) th th rd Pensions & Investments (May 2011 based on December 31, 2010 assets) |
![]() 9 Barclays Capital 2011 Global Financial Services Conference Assets Under Custody ($ Trillions) Assets Under Management ($ Billions) We have had record new business results in recent quarters across our business units. Winning in the Marketplace CAGR 22% CAGR 13% $2.8 $3.2 $3.6 $3.7 $3.7 $3.6 $3.9 $4.1 $4.4 $4.4 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 $522 $559 $611 $627 $647 $603 $657 $644 $662 $684 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 |
![]() 10 Barclays Capital 2011 Global Financial Services Conference As of 6/30/11 Peer group is the 20 largest US-based banks based on total assets at 12/31/10. Peer data is presented as reported by SNL Financial. NCOs = Net Charge-offs. NPAs = Nonperforming Assets. REO = Real Estate Owned. $29 Billion Loan Portfolio Loan Quality Better than Industry Averages Northern Trust Top 20 Peer Avg. Relationship Based, Conservative Lending Strategy Diversified and High Quality Loan Portfolio ($ Billions) Commercial Real Estate $3.1 Leases $1.0 Non-U.S. $1.7 Other $0.6 Residential Real Estate $10.7 Commercial & Institutional $6.3 Private Client $5.2 0.21% 1.26% 1.57% 3.83% NCOs to Avg. Loans NPAs to Loans & REO |
![]() 11 Barclays Capital 2011 Global Financial Services Conference High Quality Securities Portfolio Average Securities Portfolio ($ Billions) High quality, short duration securities portfolio 81% invested in U.S. Treasury, government sponsored agency and triple-A rated securities at June 30, 2011 Minimal level of losses due to long-term focus on conservative, high quality investments Began modest duration extensions in early 2010 2001 2002 2003 2004 2005 2006 2007 2008 2009 20101H2011 $8.5 $7.2 $8.4 $8.2 $9.9 $11.8 $12.5 $12.3 $17.4 $19.9 $23.1 |
![]() Adapting to the Environment Barclays Capital 2011 Global Financial Services Conference northerntrust.com © 2011 Northern Trust Corporation P R I N C I P L E S T H A T E N D U R E Service Expertise Integrity |
![]() 13 Barclays Capital 2011 Global Financial Services Conference Currency volatility has declined from the heightened levels seen in late 2007 – 2009 Lower Securities Lending Volumes Securities lending collateral of $106 billion at June 30, 2011 is much lower than its peak of nearly $300 billion in 2007 The lower volumes primarily reflect lower demand *Excludes impact of mark-to-market fund Securities Lending Fees* $MM SL Avg Collateral Lower Foreign Exchange Volatility Net Interest Income $MM Avg Fed Funds Rate Net interest margin in 1H2011 of 1.27% is well below 2003 – 2008 average of 1.74% Balance sheet growth offsets the impact on NII of low interest rates Waived fees in money market mutual funds equaled $39.4 million in 1H2011 Revenue Headwinds Due to Macroeconomic Environment FX Income $MM Global Custody Assets Historically Low Interest Rates 2007 2010 2011 2007 2010 2011 2007 2010 2011 $423 $485 $483 $475 $502 $203 $148 $195 $187 $166 $119 $174 $47 $34 $48 |
![]() 14 Basel I Tier 1 Capital 13.7% 12.8% 6.0% Total Risk-Based 15.9% 14.5% 10.0% Leverage 9.2% 7.7% 5.0% Tier 1 Common Equity 13.2% 12.3% - Pro-forma Basel III* Tier 1 Common Equity 11.3% “Well Capitalized” Capital Ratios 6/30/10 6/30/11 Guideline Consistently Strong Capital Base *Pro-forma Basel III ratios represent Northern Trust’s estimates calculated using the current methodologies provided by the oversight body of the Basel Committee as Northern Trust currently understands them. The proposed guidelines represent the minimum capital requirements, inclusive of the capital conservation buffer, currently proposed to be effective in 2019. The ultimate impact of the new capital standards on Northern Trust will depend on a number of factors, including further changes to the Basel III methodologies and the rulemaking and implementation by the U.S. banking regulators. Therefore, these estimates are subject to change. Common Equity ($ Billions) CAGR +11% $2.7 $2.9 $3.1 $3.3 $3.6 $3.9 $4.5 $4.9 $6.3 $6.8 $7.0 Barclays Capital 2011 Global Financial Services Conference |
![]() Investing in Our Business We have continued to invest in our core businesses to capitalize on the opportunities before us. Strategic Hiring Opportunistic Acquisitions Investment Capabilities New Markets Personal Financial Services Global Fund Services Strategic Acquisitions Sovereign Wealth Funds Insurance Business Technological Innovation Corporate & Institutional Services International Growth Exchange Traded Funds Alternative Investments Direct Sales Northern Trust Global Investments Opened a Washington, D.C. office Made strategic hires of wealth advisors around the country Completed Waterline, Bank of Ireland Securities Services, and Omnium acquisitions Expanded NTGI teams in Europe and Asia Invested $518 million in technology in 2010 15 Barclays Capital 2011 Global Financial Services Conference |
![]() 16 Barclays Capital 2011 Global Financial Services Conference Return on equity has been pressured by the current operating environment and higher capital levels. We are actively evaluating our profitability dynamics in light of the current environment. Revenue enhancement opportunities Expense and efficiency initiatives Improving Profitability & Returns 14.4% 10.1% 8.8% Average Average 2010 2002 - 2007 2008 - 2009 YTD 2011 Return on Common Equity 16.4% |
![]() Concluding Thoughts Barclays Capital 2011 Global Financial Services Conference northerntrust.com © 2011 Northern Trust Corporation Service Expertise Integrity P R I N C I P L E S T H A T E N D U R E |
![]() 18 Barclays Capital 2011 Global Financial Services Conference Market Leader in Focused Businesses Best Private Bank in North America (Financial Times, November 2010 and 2009) Best Global Investor Services House (Euromoney, September 2011 and July 2010) One of the largest Fund Administrators in Ireland and Guernsey U.S. Equity Index Manager of the Year (Institutional Investor, April 2011) 13 th largest manager of worldwide institutional assets (Pensions & Investments, May 2011) Strong History of Organic Growth Assets under custody 10-year CAGR of +10% Net new business up 28% in 2010 versus prior year Continuing to invest in the business Distinctive Financial Strength 81% of securities portfolio rated triple A NPAs to loans relatively low at 1.26% Tier 1 Common Equity ratio of 12.3% 96% of total Tier 1 Capital is Tier 1 Common Equity Invested & Experienced Management Team Combined service at Northern Trust of 216 years Strategically Positioned for Growth As of June 30, 2011 |
![]() northerntrust.com © 2011 Northern Trust Corporation Service Expertise Integrity P R I N C I P L E S T H A T E N D U R E Northern Trust Corporation Frederick H. Waddell Chairman & Chief Executive Officer Barclays Capital 2011 Global Financial Services Conference Hilton New York New York City September 13, 2011 |