Northern Trust Corporation · NASDAQ:NTRS
Northern Trust — Investor Day (May 2008)
103 slides from Northern Trust's investor day presentation, May 27, 2008
Slide 1: Investor Day 2008: Principles That Endure
Service Expertise Integrity Frederick H. Waddell President & Chief Executive Officer © 2008 Northern Trust Corporation INVESTOR DAY 2008 Principles That Endure NORTHERN TRUST CORPORATION EXHIBIT 99.1
Slide 2: Forward Looking Statement
Integrity Expertise Service Forward Looking Statement This presentation may include forward-looking statements such as statements that relate to Northern Trust’s financial goals, dividend policy, expansion and business development plans, anticipated expense levels and projected profit improvements,
Slide 3: Today's Agenda
Integrity Expertise Service Today’s Agenda Corporate Overview Frederick H. Waddell President & Chief Executive Officer Financial Overview Steven L. Fradkin Executive Vice President and Chief Financial Officer Personal Financial Services Sherry S. Barrat Co-President, PFS Corporate & Institutional Se
Slide 4: Northern Trust: Client-Centric and Highly Focused
Service Expertise Integrity © 2008 Northern Trust Corporation INVESTOR DAY 2008 Principles That Endure Northern Trust: Client-Centric and Highly Focused Principles That Endure
Slide 5: Relationship Driven, Client-Centric Business Model
Integrity Expertise Service Relationship Driven, Client-Centric Business Model Personal Financial Services Corporate & Institutional Services Northern Trust Global Investments Our Clients Worldwide Operations & Technology Government Agencies Taft-Hartley Foundations / Endowments / Healthcare Individ
Slide 6: Enduring Principles and Strategies for Success
Integrity Expertise Service Enduring Principles and Strategies for Success Attractive Client Markets Focused Capabilities Excellence in Execution Brand Client- Centric Organic Growth Acquisition Strategy Focused on Expanding Geography or Capability Operating with a Single Global Platform Key Princip
Slide 7: Personal Financial Services
Service Expertise Integrity © 2008 Northern Trust Corporation INVESTOR DAY 2008 Principles That Endure Personal Financial Services Principles That Endure
Slide 8: Extensive Reach in High Growth Target Market
Integrity Expertise Service Extensive Reach in High Growth Target Market Attractive Client Markets 7.1% 11.3% 15.5% Personal Financial Services 85 PFS Offices in 18 States Over 50% of the U.S. millionaire market resides within a 45-minute drive of Northern Trust offices. Arizona (8) Florida (25) Ill
Slide 9: Addressing Clients' Complex Financial Goals
Integrity Expertise Service Addressing Clients’ Complex Financial Goals Focused Capabilities Personal Financial Services Our integrated approach and comprehensive capabilities allow us to address all of our clients ’ needs. Grow Assets Proprietary and Third-party Investment Managers Active Index Str
Slide 10: Our Focus on the Affluent Market is Unmatched
Integrity Expertise Service Our Focus on the Affluent Market is Unmatched Excellence in Execution Private Client Revenues As a Percentage of Total Company Revenues, Full Year 2007 Source: Company Fourth Quarter 2007 Earnings Release reports; *Merrill Lynch percentage based on 2006 data Northern Trus
Slide 11: Largest Personal Trust Provider in the U.S.
Integrity Expertise Service Largest Personal Trust Provider in the U.S. Excellence in Execution Personal Trust Assets ($ Billions) Source: SNL Financial; As of December 31, 2007 2. 3. 4. 5. 6. 7. 8. 9. 10. The Largest Personal Trust Bank in the U.S . Northern Trust $205.3 1. Bank of America 127.5 JP
Slide 12: What Really Matters to Our Clients
Integrity Expertise Service What Really Matters to Our Clients Personal Financial Services Northern Trust’s holistic approach to wealth management addresses the full spectrum of our clients’ unique needs. Client- Centric Private Banking Asset Management Trust Services Financial Planning Philanthropi
Slide 13: Personal Financial Services: Key Strategies and Opportunities
Integrity Expertise Service Personal Financial Services Attractive Client Markets Focused Capabilities Excellence in Execution Brand Key Strategies and Opportunities for Long-term Growth Attractive growth rates in target markets Expand share of wallet Enhance referral flow Sustain and leverage fligh
Slide 14: Corporate & Institutional Services
Service Expertise Integrity © 2008 Northern Trust Corporation INVESTOR DAY 2008 Principles That Endure Corporate & Institutional Services Principles That Endure
Slide 15: (a En ny
(a En ny
Slide 16: Continuum of Solutions for Complex Needs
Integrity Expertise Service Continuum of Solutions for Complex Needs Focused Capabilities Corporate & Institutional Services Asset Administration Asset Processing Asset Reporting Asset Enhancement Asset Management
Slide 17: Continuum of Solutions: Businesses We Are Not In
Integrity Expertise Service Continuum of Solutions for Complex Needs Focused Capabilities Corporate & Institutional Services Businesses we are NOT in: Investment Banking Sub-Prime Mortgage Underwriting Asset Backed Commercial Paper Conduits Private Equity Bridge Financing American Depository Receipt
Slide 18: Strong Presence in Target Institutional Segments
Integrity Expertise Service Strong Presence in Target Institutional Segments Fund Administration Pension Plans Public Funds / Taft-Hartley Foundations, Endowments, and Healthcare Excellence in Execution Corporate & Institutional Services Source: Pensions and Investments 21 January 2008 (US Pensions)
Slide 19: Clients Drive Our Solutions and Product Offerings
Integrity Expertise Service Clients Drive Our Solutions and Product Offerings Corporate & Institutional Services Corporate & Institutional Services Pension Plans Public Funds Asset Managers Foundations & Endowments Client Needs / Industry Trends Asset Administration Asset Processing Asset Management
Slide 20: Corporate & Institutional Services: Key Strategies and Opportunities
Integrity Expertise Service Corporate & Institutional Services Attractive Client Markets Focused Capabilities Excellence in Execution Brand Key Strategies and Opportunities for Long-term Growth Competing and winning around the world Complexity drives innovation Broad array of solutions Unique global
Slide 21: Northern Trust Global Investments
Service Expertise Integrity © 2008 Northern Trust Corporation INVESTOR DAY 2008 Principles That Endure Northern Trust Global Investments Principles That Endure
Slide 22: An Attractive Growth Opportunity
Integrity Expertise Service An Attractive Growth Opportunity Attractive Client Markets Northern Trust Global Investments “In some respects, the asset management business is the envy of the financial services sector in view of its high margins, healthy returns, limited credit risk, generally low capi
Slide 23: Providing Investment Solutions to Target Clients
Integrity Expertise Service $62 BN (43%) $36 BN (24%) $40 BN (27%) Providing Investment Solutions to Target Clients $221 BN (35%) $62 BN (10%) $267 BN (42%) $80 BN (13%) Focused Capabilities Personal Financial Services $146.0 Billion Equities Fixed Income Short Duration Other $8 BN (6%) By Asset Cla
Slide 24: Top Tier Investment Manager
Integrity Expertise Service Top Tier Investment Manager Excellence in Execution Northern Trust Global Investments Source: Pensions & Investments 2007 Special Report on Asset Managers, data as of December 31, 2006. Multi-manager Ranking Source: Cerulli Associates, 2005 th Largest Manager Worldwide In
Slide 25: Significant Success in Growing Client Assets
Integrity Expertise Service Significant Success in Growing Client Assets Excellence in Execution $59 $73 $92 $98 $94 $88 $104 $110 $117 $135 $148 $138 $160 $201 $228 $226 $215 $374 $462 $501 $563 $609 Northern Trust Global Investments PFS Assets Under Management ($ Billions) C&IS Assets Under Manage
Slide 26: Clients Drive Our Solutions and Product Offerings
Integrity Expertise Service Clients Drive Our Solutions and Product Offerings Personal Clients Institutional Clients Northern Trust Global Investments Northern Trust Global Investments Northern Trust Global Investments Client Needs / Industry Trends Client- Centric Active Quantitative Manager of Man
Slide 27: Northern Trust Global Investments: Key Strategies and Opportunities
Integrity Expertise Service Attractive Client Markets Focused Capabilities Excellence in Execution Brand Northern Trust Global Investments Client- Centric Client- Centric Key Strategies and Opportunities for Long-term Growth Aligned and focused on serving personal and institutional clients Leveragin
Slide 28: One Voice, One Message via Multiple Channels
Integrity Expertise Service One Voice, One Message via Multiple Channels Brand Alternative Communications Client Communications Advertising Regional Messages Products Philanthropy Sponsorships & Events Client Segmentation Worldwide Crises Funding Worldwide Crises Funding
Slide 29: Frederick H. Waddell, President & CEO
Service Expertise Integrity Frederick H. Waddell President & Chief Executive Officer © 2008 Northern Trust Corporation INVESTOR DAY 2008 Principles That Endure NORTHERN TRUST CORPORATION
Slide 30: Financial Overview & Perspectives
Service Expertise Integrity Steven L. Fradkin Executive Vice President & Chief Financial Officer © 2008 Northern Trust Corporation INVESTOR DAY 2008 Principles That Endure Financial Overview & Perspectives
Slide 31: Today's Agenda: Financial Overview & Perspectives
Integrity Expertise Service Today’s Agenda Financial Overview & Perspectives Strong Performance Over the Long-Term Financial Overview Financial Perspectives in Focus Current Topics of Interest
Slide 32: Strong Financial Performance Over the Long-Term
Service Expertise Integrity © 2008 Northern Trust Corporation INVESTOR DAY 2008 Principles That Endure Strong Financial Performance Over the Long-Term Principles That Endure
Slide 33: Years of History: Economic Shocks & Cycles
Integrity Expertise Service 20 Years of History: Economic Shocks & Cycles 1998: LTCM collapse; Russian debt default; Global currency crisis 2000: Y2K financial infrastructure scare; Start of 2-year stock bear market 2001: 9/11 attack; Invasion of Afghanistan 2002: Accounting scandals: Enron, Worldco
Slide 34: Years of History: Interest Rate Environment
Integrity Expertise Service 20 Years of History: Interest Rate Environment
Slide 35: Years of History: Successfully Navigated by Northern Trust
Integrity Expertise Service 20 Years of History: Successfully Navigated by Northern Trust
Slide 36: Financial Overview
Service Expertise Integrity © 2008 Northern Trust Corporation INVESTOR DAY 2008 Principles That Endure Financial Overview Principles That Endure
Slide 37: NTRS: Record Financial Performance in 2007
Integrity Expertise Service NTRS: Record Financial Performance in 2007 Trust, Inv. & Other Servicing Fees Other Non-Interest Income Net Interest Income Total Revenues Non-Interest Expenses* Net Income* Earnings Per Share* % Growth 2006 to 2007 $2,078 Million $600 Million $894 Million $3,572 Million
Slide 38: NTRS: Excellent Financial Performance Continued in 1Q08
Integrity Expertise Service NTRS: Excellent Financial Performance Continued in 1Q08 Year-to-Date 3/31/08 Trust, Inv. & Other Servicing Fees Other Non-Interest Income* Net Interest Income Total Revenues* Non-Interest Expenses* Net Income* Earnings Per Share* % Growth 2007 to 2008 $527 Million $185 Mi
Slide 39: Long-Term, Strategic Financial Targets Met in 2007
Integrity Expertise Service Long-Term, Strategic Financial Targets Met in 2007 Revenue Growth 8% - 10% Positive Operating Leverage EPS Growth 10% - 12% Return on Equity 16% - 18% Annual Target Full Year 8.6% +3.4 26.0% 16.1% Full Year 15.5% +2.3 16.0% 17.0% Full Year 13.9% +1.2 13.6% 17.6% Full Year
Slide 40: Strong Growth in Client Assets
Integrity Expertise Service Strong Growth in Client Assets… …in stark contrast to equity markets. $0.0 $1.1 $2.2 $3.3 $4.4 1Q08 Assets Under Custody $4.0 Trillion $0.0 $0.5 $1.0 $1.5 $2.0 1Q08 Global Custody Assets $2.0 Trillion $0 $200 $400 $600 $800 1Q08 Assets Under Management $779 Billion CAGR +
Slide 41: Trust, Investment & Other Servicing Fees
Integrity Expertise Service Trust, Investment & Other Servicing Fees… $1,330 $1,559 $1,792 $2,078 $1,189 …continue to dominate revenue profile. Consolidated Trust, Investment & Other Servicing Fees ($ Millions) % of Total Revenues 55% 57% 58% 59% 58%
Slide 42: A Hallmark of Northern Trust: Positive Operating Leverage
Integrity Expertise Service A Hallmark of Northern Trust: Positive Operating Leverage * +1% +6% +4% +1% +1% +0% +1% +2% -5% -3% +2% +2% +1% +0% +0% +0% +0% +5% +2% -2% We have achieved positive or neutral operating leverage in of the last 20 years. Note: Calculations prior to 1999 based on actual re
Slide 43: A Hallmark of Northern Trust: Positive Operating Leverage
Integrity Expertise Service A Hallmark of Northern Trust: Positive Operating Leverage * +1% +6% +4% +1% +1% +0% +1% +2% -5% -3% +2% +2% +1% +0% +0% +0% +0% +5% +2% -2% We have achieved positive or neutral operating leverage in of the last years… through various market and interest rate environments.
Slide 44: Financial Perspectives in Focus
Integrity Expertise Service Financial Perspectives in Focus Net Interest Income Credit Quality Capital Management Business Unit Financial Performance
Slide 45: Strong Growth in Net Interest Income
Integrity Expertise Service Strong Growth in Net Interest Income… $471 $513 $557 $622 $648 $651 $603 $621 $735 $810 $908 $150 $250 $350 $450 $550 $650 $750 $850 $950 0% 3% 6% 9% 12% …through various interest rate cycles. Average Annual Fed Funds Rate Focus on Net Interest Income 21.6 24.6 27.2 30.7
Slide 46: Outstanding Credit Quality Relative to Peer Banks
Integrity Expertise Service Outstanding Credit Quality Relative to Peer Banks Focus on Credit Quality Consistent top-tier credit quality rankings. Notably better than peer averages in each category. Peer* Average NTRS 0.13% 463% 0.04% 1.18% 168% 1.01% Non-Performing Assets as a % of Loans Loan Loss
Slide 47: Strong and Conservative Capital Management
Integrity Expertise Service Strong and Conservative Capital Management $4.8 $3.3 $4.5 $3.9 $1.6 $2.9 $2.7 $2.3 $2.1 $3.1 $3.6 $1.8 1Q08 End-of-Period Common Equity ($ Billions) 10-Year Compound Annual Growth Rate: 11% First Quarter 2008 was the 80 consecutive quarter (or 20 years) of increasing comm
Slide 48: Strong and Conservative Capital Management
Integrity Expertise Service Strong and Conservative Capital Management 11.0% 9.7% 9.8% 9.7% 11.1% Strong Capital Ratios Consistently Exceed Regulatory “ Well Capitalized ” Guidelines. 14.0% 13.3% 12.3% 11.9% 11.9% 6.8% 6.7% 7.1% 7.6% 7.6% Tier 1 Capital Ratio Well Capitalized Guideline = 6% Leverage
Slide 49: PFS Income Statement
Integrity Expertise Service PFS Income Statement Focus on Business Unit Financials Trust, Inv. & Other Servicing Fees Other Non-Interest Income Net Interest Income Total Revenues Non-Interest Expenses Provision for Credit Losses Income Before Income Tax Provision for Income Tax Net Income % Growth 2
Slide 50: PFS Trust, Investment & Other Servicing Fees
Integrity Expertise Service PFS Trust, Investment & Other Servicing Fees ($ Millions) Focus on Business Unit Financials $650 $708 $779 $898 $599 5-YEAR CAGR +8%
Slide 51: C&IS Income Statement
Integrity Expertise Service C&IS Income Statement Focus on Business Unit Financials Trust, Inv. & Other Servicing Fees Other Non-Interest Income Net Interest Income Total Revenues Non-Interest Expenses Provision for Credit Losses Income Before Income Tax Provision for Income Tax Net Income % Growth
Slide 52: C&IS Trust, Investment & Other Servicing Fees
Integrity Expertise Service C&IS Trust, Investment & Other Servicing Fees Focus on Business Unit Financials $680 $852 $1,012 $1,180 $590 5-YEAR CAGR +16% ($ Millions)
Slide 53: C&IS and PFS – A Balanced Mix
Integrity Expertise Service C&IS and PFS – A Balanced Mix Focus on Business Unit Financials Full Year 2007 Pre-Tax Profit Margin After-Tax Profit Margin Total Revenues ($ Millions) Net Income ($ Millions) $1,511 $2,066 $339 $526 36.7% 40.5% 22.4% 25.5% PFS C&IS
Slide 54: Current Topics of Interest
Service Expertise Integrity © 2008 Northern Trust Corporation INVESTOR DAY 2008 Principles That Endure Current Topics of Interest Principles That Endure
Slide 55: Conservative Securities Portfolio
Integrity Expertise Service Conservative Securities Portfolio Current Topics of Interest 3/31/08 Securities – Available for Sale U.S. Government $ 20.3 nm Obligations of States / Political Subdivisions 33.0 nm Government Sponsored Agency 7,856.0 70% Asset-Backed 1,779.3 16% Other 388.5 3% Total Secu
Slide 56: Diversified and High Quality Loan Portfolio
Integrity Expertise Service Diversified and High Quality Loan Portfolio Current Topics of Interest 3/31/08 U.S. Residential Real Estate $ 9.3 35% Commercial 6.4 24% Commercial Real Estate 2.4 9% Personal 3.8 14% Other 1.6 6% Lease Financing 1.1 4% Total U.S. 24.7 92% Non-U.S. 2.1 8% Total Loans and
Slide 57: Capital Support Agreements for Cash Funds
Integrity Expertise Service Capital Support Agreements for Cash Funds Current Topics of Interest Executed on February 21, 2008 Though not obligated to do so, Northern Trust entered into Capital Support Agreements (“CSA”) with an aggregate maximum contribution of $229 million, largely for the benefit
Slide 58: Securities Lending
Integrity Expertise Service Securities Lending Current Topics of Interest Quarterly Fees ($ Millions) First Quarter $ 45.6 (6%) Second Quarter 73.4 21% Third Quarter 33.0 (19%) Fourth Quarter 55.1 32% Total $ 207.1 8% First Quarter $ 31.9 (30%) Actual Y-o-Y Growth Actual
Slide 59: Securities Lending
Integrity Expertise Service Securities Lending Current Topics of Interest First Quarter $ 45.6 (6%) Second Quarter 73.4 21% Third Quarter 33.0 (19%) $ 69.0 70% Fourth Quarter 55.1 32% 101.1 142% Total $ 207.1 8% $ 289.1 51% First Quarter $ 31.9 (30%) $ 124.9 174% Actual Y-o-Y Growth Proforma* Y-o-Y
Slide 60: Key Takeaways
Integrity Expertise Service Key Takeaways Northern Trust: Business model centered around clients with real needs Strong and differentiated financial positioning Conservatively managed, while generating high performance results A focused and disciplined business model, across cycles Financial success
Slide 61: Financial Overview & Perspectives
Service Expertise Integrity Steven L. Fradkin Executive Vice President & Chief Financial Officer © 2008 Northern Trust Corporation INVESTOR DAY 2008 Principles That Endure Financial Overview & Perspectives
Slide 62: Personal Financial Services
Service Expertise Integrity Sherry S. Barrat Co-President, PFS © 2008 Northern Trust Corporation INVESTOR DAY 2008 Principles That Endure Personal Financial Services
Slide 63: Key Strategic Priorities
Integrity Expertise Service Key Strategic Priorities Personal Financial Services Leveraging Our Renowned Client Service Culture Offering Comprehensive and Holistic Solutions to Clients in Target Segments Strategies and Opportunities for Continued Growth
Slide 64: PFS Is the 119-Year Heritage of Northern Trust Corporation
Integrity Expertise Service PFS Is the 119-Year Heritage of Northern Trust Corporation Industry leader in wealth management. Renowned for exceptional client service. Serving high growth market Attractively positioned office footprint Integrated client service teams Largest personal trust bank Highes
Slide 65: In Recent Years, PFS Client-Centric Initiatives
Integrity Expertise Service In Recent Years, PFS Client-Centric Initiatives… The recognized leader in providing sophisticated financial solutions to the world’s wealthiest families. Delivering trust, investment management and banking solutions to individuals through 85 offices in 18 states. Deliveri
Slide 66: Today, Delivering a Comprehensive Array
Integrity Expertise Service Today, Delivering a Comprehensive Array… …of solutions across the risk spectrum to meet the investment needs of clients. 2008 PFS Portfolio Allocation Total AUM: $146 Billion (1Q 2008) Active and Structured Munis Active Taxable High Yield Munis High Yield Taxable Laddered
Slide 67: Significant Growth in Client Use of Expanded Solutions
Integrity Expertise Service Significant Growth in Client Use of Expanded Solutions NTGI proprietary External managers Expanded Solutions AUM: $43 Billion 2008 PFS Portfolio Allocation Total AUM: $146 Billion (1Q 2008)
Slide 68: Holistic Approach to Wealth Management
Integrity Expertise Service Holistic Approach to Wealth Management… …addresses the full spectrum of our clients’ unique needs. Private Banking Asset Management Trust Services Financial Planning Philanthropic Services Retirement Planning Business Banking Brokerage CLIENT
Slide 69: Today, PFS Client-Centric Initiatives
Integrity Expertise Service Today, PFS Client-Centric Initiatives… … are focused on further strengthening our client service culture. The recognized leader in providing sophisticated financial solutions to the world’s wealthiest families. Wealth Management Delivering trust, investment management and
Slide 70: Private Client Services
Integrity Expertise Service Private Client Services 58% Deepen single-service relationships Utilize expanded product array to support client objectives and expand share of wallet Further increase engagement with clients through integrated teams Heritage and Foundational Client Base Private Client Se
Slide 71: Wealth Advisory Services
Integrity Expertise Service Wealth Advisory Services 30% Utilize team structure and expertise to broaden client relationships Continue to expand investment solutions Lead with advice by incorporating financial planning, philanthropic and fiduciary services, and open architecture investment consultin
Slide 72: Wealth Management Group
Integrity Expertise Service Wealth Management Group 12% Effectively introduce asset management solutions to existing client base Expand international clientele from European base in London Further Leverage Industry Leadership in Serving the World’s Wealthiest Families 400 family relationships in 15
Slide 73: Family Advisory Services
Integrity Expertise Service Family Advisory Services Delivering comprehensive, advice-driven financial solutions through an integrated team of specialists. Delivering high-touch trust, investment management and banking solutions to individuals through integrated teams. The recognized leader in provi
Slide 74: Summary and Q&A
Integrity Expertise Service Summary and Q&A Attractive Client Markets Focused Capabilities Excellence in Execution Brand Personal Financial Services Client- Centric Client- Centric Key Strategies and Opportunities for Long-term Growth Attractive growth rates in target markets Broaden breadth of rela
Slide 75: Personal Financial Services
Service Expertise Integrity Sherry S. Barrat Co-President, PFS © 2008 Northern Trust Corporation INVESTOR DAY 2008 Principles That Endure Personal Financial Services
Slide 76: Corporate & Institutional Services
Service Expertise Integrity Timothy J. Theriault President, C&IS © 2008 Northern Trust Corporation INVESTOR DAY 2008 Principles That Endure Corporate & Institutional Services
Slide 77: Key Strategic Priorities
Integrity Expertise Service Key Strategic Priorities Competing and winning around the world Complexity drives innovation Broad array of solutions Unique global operating model Extending industry leading technology platform Corporate & Institutional Services
Slide 78: Strategically Positioned to Succeed in Three Dynamic Regions
Integrity Expertise Service Strategically Positioned to Succeed in Three Dynamic Regions North America Europe, Middle East & Africa Asia Pacific Abu Dhabi Dublin Toronto London Limerick Amsterdam Luxembourg Guernsey Melbourne Singapore Hong Kong Bangalore Beijing Tokyo Jersey Chicago
Slide 79: Actively Pursuing Mandates Across Multiple Markets
Integrity Expertise Service Actively Pursuing Mandates Across Multiple Markets Singapore Luxembourg Hong Kong Australia Switzerland Sweden Qatar Malaysia Germany Norway Bahrain Tunisia Kuwait UAE South Korea Macau Thailand Finland Ireland Cayman Islands Saudi Arabia United Kingdom Guernsey and Jerse
Slide 80: Success in Regions and Target Segments Around the World
Integrity Expertise Service Success in Regions and Target Segments Around the World Delaware Public Employees’ Retirement System Vervoer (Netherlands) $9 Billion Abu Dhabi Retirement Pensions & Benefits Fund China’s National Social Security Fund Hospitals of Ontario Pension Plan New Zealand Superann
Slide 81: Complexity Drives Innovation
Integrity Expertise Service Complexity Drives Innovation With over 50% of client assets cross-border, our expertise in the global investment arena drives us to anticipate change and predict future trends. Industry dynamics… Evolving Retirement Trends Ahead of the curve – Global retirement solutions
Slide 82: Asset Servicing Solutions
Integrity Expertise Service Asset Servicing Solutions Full array of capabilities to meet the needs of sophisticated institutional investors. Fund accounting Transfer agency Corporate secretarial Trustee Investment operations outsourcing Safekeeping Settlement Derivatives processing Income collection
Slide 83: A Single Global Operating Model
Integrity Expertise Service A Single Global Operating Model Bangalore Singapore Chicago Dublin Limerick London Guernsey 19:00 09:00 Central Daylight Time 03:00 Platform delivers all services… from trade capture to investment operations outsourcing Organic growth and development of technology... back
Slide 84: Outstanding Growth in Client Assets
Integrity Expertise Service Outstanding Growth in Client Assets Strong historical performance sets a high bar for the future. $1.9 $2.3 $2.7 $3.3 $3.8 C&IS Assets Under Custody Global Custody Assets C&IS Assets Under Management CAGR +19% $0.7 $1.0 $1.2 $1.7 $2.0 CAGR +29% $374 $462 $501 $563 $609 ($
Slide 85: Excellent Top-line and Bottom-line Growth
Integrity Expertise Service Excellent Top-line and Bottom-line Growth… 31% 28% $1.0 $1.1 $1.4 $1.7 $2.1 $176 $278 $318 $392 $526 42% 39% 37% 40% 33% CAGR +20% CAGR +31% …and industry-leading profit margins. *2007 Competitors’ average margin computed using the following: Bank of NY Mellon – Asset Ser
Slide 86: Strategic Growth Initiatives
Integrity Expertise Service Strategic Growth Initiatives onshore fund administration service capabilities for asset manager servicing local presence retirement market products and solutions in new markets and jurisdictions best in class alternative asset solutions and administration solutions Thinki
Slide 87: Summary and Q&A
Integrity Expertise Service Summary and Q&A Attractive Client Markets Focused Capabilities Excellence in Execution Brand Corporate & Institutional Services Client- Centric Client- Centric Key Strategies and Opportunities for Long-term Growth Competing and winning around the world Complexity drives i
Slide 88: Corporate & Institutional Services
Service Expertise Integrity Timothy J. Theriault President, C&IS © 2008 Northern Trust Corporation INVESTOR DAY 2008 Principles That Endure Corporate & Institutional Services
Slide 89: Northern Trust Global Investments
Service Expertise Integrity Stephen N. Potter President, NTGI © 2008 Northern Trust Corporation INVESTOR DAY 2008 Principles That Endure Northern Trust Global Investments
Slide 90: Key Strategic Priorities
Integrity Expertise Service Key Strategic Priorities Aligned and focused on serving personal and institutional clients Leveraging strengths in quantitative, manager of managers and fixed income investments Building the business through global growth Delivering investment excellence Northern Trust Gl
Slide 91: Strong Growth in Assets Under Management
Integrity Expertise Service Strong Growth in Assets Under Management $87.7 $104.3 $110.4 $117.2 $134.7 $146.0 $214.8 $374.3 $461.5 $500.7 $562.5 $608.9 $632.6 $148.3 Demonstrated ability to grow assets under management across target client segments. $0 $100 $200 $300 $400 $500 $600 $700 $800 3/31/20
Slide 92: A World Class Investment Manager
Integrity Expertise Service A World Class Investment Manager $457 Billion Active $281 Billion Quantitative $633 Billion Personal Institutional $146 Billion Short Duration $387 Billion Equities $283 Billion Assets Under Management: $778.6 Billion (As of March 31, 2008) $41 Billion Manager of Managers
Slide 93: Well Positioned to Serve Target Client Segments
Integrity Expertise Service Well Positioned to Serve Target Client Segments Personal Clients $146 BN Institutional Clients $633 BN Single Strategies Bundled Solutions Client Intimacy Northern Trust’s strong position in the personal and institutional markets provides the opportunity to build and deli
Slide 94: Offering a Broad Array of Solutions to Target Clients
Integrity Expertise Service Offering a Broad Array of Solutions to Target Clients Personal Clients $146 BN Institutional Clients $633 BN Cash & Short Duration Fixed Income Active Equity Quantitative Manager of Managers Client Intimacy With a strong presence in asset classes across the investment spe
Slide 95: Proprietary and Open Architecture Offerings
Integrity Expertise Service Proprietary and Open Architecture Offerings Personal Clients $146 BN Institutional Clients $633 BN Cash & Short Duration Fixed Income Active Equity Quantitative Manager of Managers Client Intimacy Open Architecture Northern Trust delivers products, both in-house and throu
Slide 96: A Full Array of Proprietary and External Investment Solutions
Integrity Expertise Service A Full Array of Proprietary and External Investment Solutions Equities Large-Cap Mid-Cap Small-Cap International Tax Advantaged Fixed Income Core International Municipals Cash Enhanced Cash High Yield Alternatives Private Equity Hedge Funds Emerging Markets Emerging / Min
Slide 97: Personal Market Distribution
Integrity Expertise Service Personal Market Distribution $146.0 Billion Growth will be led by client specific solutions harnessing both proprietary and open architecture capabilities. Support the PFS platform Best in class investments through open architecture Increase access to alternative capabili
Slide 98: Institutional Market Distribution
Integrity Expertise Service Institutional Market Distribution $632.6 Billion Alignment with C&IS in the institutional market provides clients with access to leading asset servicing and asset management capabilities. Strong market segment and geographic alignment with C&IS Building on our strong base
Slide 99: Positioned for Global Growth
Integrity Expertise Service Positioned for Global Growth Netherlands United Kingdom United States (85 PFS Offices) Japan RBS/ Mitsubishi/ Resona Trust Ireland Pensco Hong Kong Nordics Nordea Singapore China France Groupama Northern Trust Offices Institutional Distribution Agreements Thailand Bangkok
Slide 100: Delivering Performance In Line with Client Objectives
Integrity Expertise Service Delivering Performance In Line with Client Objectives Three Year Product AUM Relative Return U.S. $39 BN +12 basis points Non-U.S. $13 BN -2 basis points Index – Fixed Income Three Year Product AUM Relative Return Municipal $10 BN +12 basis points High Yield $2 BN +7 basi
Slide 101: Summary and Q&A
Integrity Expertise Service Summary and Q&A Attractive Client Markets Focused Capabilities Excellence in Execution Brand Northern Trust Global Investments Client- Centric Client- Centric Key Strategies and Opportunities for Long-term Growth Aligned and focused on serving personal and institutional c
Slide 102: Northern Trust Global Investments
Service Expertise Integrity Stephen N. Potter President, NTGI © 2008 Northern Trust Corporation INVESTOR DAY 2008 Principles That Endure Northern Trust Global Investments
Slide 103: Closing Remarks and Q&A
Service Expertise Integrity Frederick H. Waddell President & Chief Executive Officer © 2008 Northern Trust Corporation INVESTOR DAY 2008 Principles That Endure Closing Remarks Q&A