J.P. Morgan Comments On Northern Trust's Weak EPS

According to J.P. Morgan, Northern Trust NTRS posted weak EPS of $0.59 (ex Visa gain), well below its estimate of $0.64 due to weak fee income and higher than expected expenses, partly offset by higher net interest income and high loan recoveries (of charged off loans), which are likely not sustainable. J.P. Morgan said that C&IS fees were weaker than expected for the third time despite market appreciation and new business wins (and with a different driver). “It is also not clear why NTRS's F/X revenues have been much weaker than peers as they fell sharply from 4Q, which did not see the same benefit as peers. Operating leverage was negative yoy on a core basis. Capital ratios remained strong, and small share repurchases commenced. Reported EPS was $0.61 including Visa-related gain.” Northern Trust closed yesterday at $48.67.