Northern Trust Corporation · NASDAQ:NTRS
Northern Trust — Merrill Lynch Banking & Financial Services Conference 2008
34 slides from Northern Trust's conference presentation, Nov 12, 2008
Slide 1: Northern Trust Corporation – Merrill Lynch Banking & Financial Services Conference
EXHIBIT 99.1 NORTHERN TRUST Service Expertise Integrity CORPORATION Steven L. Fradkin Executive Vice President & Chief Financial Officer Merrill Lynch Banking & Financial Services Conference New York City November 13, 2008 © 2008 Northern Trust Corporation
Slide 2: Forward Looking Statement
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, business prospects and posit
Slide 3: Agenda
Agenda ¾ The Changing Landscape Commercial banks Investment banks ¾ Northern Trust Corporation Corporate Positioning and Financial Strength Corporate and Institutional Services Northern Trust Global Investments Personal Financial Services 3 Service Expertise Integrity
Slide 4: The Changing Landscape
The Changing Service Expertise Integrity Landscape © 2008 Northern Trust Corporation
Slide 5: The Changing Landscape in U.S. Financial Services
The Changing Landscape in U.S. Financial Services… ¾ Commercial Banks Consolidation has accelerated Business models are evolving ¾ Investment Banks Bear Stearns and Lehman Brothers failed Merrill Lynch acquired by Bank of America Goldman Sachs and Morgan Stanley change status to bank holdi
Slide 6: …Much of Which Occurred over a Four Week Period
…Much of Which Occurred over a Four Week Period S&P 500 9/7/08: U.S. Govt to support Fannie Mae & Freddie Mac 9/15/08: Lehman Brothers declares 1400 bankruptcy; Bank of America announces Merrill Lynch acquisition 9/16/08: U.S. Govt to support AIG 1250 9/21/08: Goldman Sachs & Morgan Stanley to becom
Slide 7: Northern Trust Corporation
Northern Trust Service Expertise Integrity Corporation © 2008 Northern Trust Corporation
Slide 8: Client-centric and Highly Focused Business Model
Client-centric and Highly Focused Business Model Our Clients Pension Funds Government Families Individuals Agencies Large Corporations Family Privately Taft-Hartley Investment Foundations Held Management Firms Foundations / Businesses Family Offices Endowments / Insurance Companies Healthcare Sovere
Slide 9: Resisting the Temptation to Change Our Business Model
Resisting the Temptation to Change Our Business Model Businesses Northern Trust is NOT in: Investment Banking Credit Cards Sub-Prime Mortgage Underwriting Retail Banking Asset Backed Commercial Paper Conduits Consumer Lending Private Equity Bridge Financing Venture Capital Discount
Slide 10: High Quality Balance Sheet Securities Portfolio
Conservative Heritage High Quality Balance Sheet Securities Portfolio Composition % of 90% of Northern Trust’s total ($ Millions) 9/30/08 Total securities portfolio composed of triple-A rated securities Securities – Available for Sale U.S. Government $ 20 nm 86% of Asset-Backed Securities Obliga
Slide 11: Diversified and High Quality Loan Portfolio
Conservative Heritage Diversified and High Quality Loan Portfolio Relationship-based lending practices Nonperforming assets totaled $61.5 million Composition % of – the increase from the prior quarter ($ Billions) 9/30/08 Total largely reflects the addition of only two loans U.S. Nonperforming
Slide 12: Outstanding Credit Quality is a Differentiator
Conservative Heritage Outstanding Credit Quality is a Differentiator Credit Quality is notably better than peer averages in each category. Peer* As of September 30, 2008 NTRS Average Non-Performing Assets 0.21% 1.97% as a % of Loans Loan Loss Reserve as a 317% 113% % of Non-Performing Assets Net Cha
Slide 13: Outstanding Capital Strength
Conservative Heritage Outstanding Capital Strength “Well Capitalized” CAPITAL RATIOS 9/30/08 Guideline COMMON EQUITY ($ Billions) CAGR: +10% Northern Trust Corporation $4.9 Tier 1 Capital Ratio 9.2% 6.0% $4.5 Total Risk-Based Ratio 11.4% 10.0% $3.9 Leverage Ratio 6.6% 5.0% $3.6 $3.3 $3.1 U.S. CAPITA
Slide 14: Corporate & Institutional Services
Corporate & Service Expertise Integrity Institutional Services © 2008 Northern Trust Corporation
Slide 15: Full Array of Capabilities
Corporate & Institutional Services Full Array of Capabilities… … to meet the needs of sophisticated institutional investors. Active Manager of managers Asset Quantitative Hedge funds Management Investment outsourcing Private equity Liability driven investing Transition management Ass
Slide 16: Strategically Positioned in Three Dynamic Regions
Corporate & Institutional Services Strategically Positioned in Three Dynamic Regions Europe, North America Middle East & Africa Asia Pacific Chicago London Amsterdam Dublin Limerick Beijing Guernsey Luxembourg Tokyo Jersey Toronto Hong Kong Bangalore Abu Dhabi Singapore Melbourne 16 Service Expertis
Slide 17: Market Opportunities Continue to Grow
Corporate & Institutional Services Market Opportunities Continue to Grow Total Market: $161 Trillion(1) Total Assets Under Custody Worldwide: $90 Trillion(2) Europe, North America Middle East & Africa Asia Pacific $60 Trillion $60 Trillion $41 Trillion Canada U.K. $10 Trillion $4 Trillion Japan West
Slide 18: Northern Trust Global Investments
Northern Trust Global Service Expertise Integrity Investments © 2008 Northern Trust Corporation
Slide 19: A Diversified, World Class Investment Manager
Northern Trust Global Investments A Diversified, World Class Investment Manager $652.4 Billion Assets Under Management as of September 30, 2008 A Diversified Asset Manager Across Asset Classes Across Client Segments Across Styles Short Personal Duration $298 Billion Equities $141 Billion Active (46%
Slide 20: Broad Array of Solutions for Personal and Institutional Clients
Northern Trust Global Investments Broad Array of Solutions for Personal and Institutional Clients Rankings Markets 10th Largest Manager Worldwide Institutional Assets Served 5th Largest Manager U.S. Institutional Tax-Exempt Assets 3rd Largest Manager Defined Benefit Assets 3rd Largest Manage
Slide 21: Personal Financial Services
Personal Financial Service Expertise Integrity Services © 2008 Northern Trust Corporation
Slide 22: Why do Personal Clients Choose Northern Trust?
Why do Personal Clients Choose Northern Trust? Personal Financial Services (PFS) Key Differentiators ; Corporate Strength and Stability ; Experience and Brand Consistency ; Holistic Financial View and Expertise ; Service Experience and Client Segment Focus ; Wealth Management Group 22 Service Expert
Slide 23: Corporate Strength and Stability
Why Do Personal Clients Choose Northern Trust? Corporate Strength and Stability 9 Consistent and Focused Strategy 9 High Quality, Short Duration Securities Portfolio 9 Client Driven, High Quality Loan Portfolio 9 Consistent Capital Strength 9 Strong Credit Ratings Over the Long-Term 23 Service Exper
Slide 24: Corporate Strength and Stability: A Perspective on Consistency
Why Do Personal Clients Choose Northern Trust? Corporate Strength and Stability A Perspective on Consistency “Northern Trust Corporation is a leading provider of asset servicing, asset management, fund administration, fiduciary and banking solutions for corporations, institutions and affluent indivi
Slide 25: Experience and Brand Consistency
Why Do Personal Clients Choose Northern Trust? Experience and Brand Consistency We have been Northern Trust since 1889… 1889 to 2008 We have a 119-year heritage ― we have been Northern Trust since 1889 and are undiluted by mergers and acquisitions. The growth that we have achieved through the years
Slide 26: Experience and Brand Consistency: Contrast with Competitors
Why Do Personal Clients Choose Northern Trust? Experience and Brand Consistency …In stark contrast to our consistently changing competitors. + + = DISRUPTION + OPPORTUNITIES FOR: + + 26 Service Expertise Integrity
Slide 27: Holistic Financial View and Expertise
Why Do Personal Clients Choose Northern Trust? Holistic Financial View and Expertise Integrated approach and comprehensive capabilities holistically address clients’ needs. Building and Protecting and Creating a Legacy Managing Wealth Transferring Wealth Grow Assets Protect and Preserve Wealth
Slide 28: Holistic Financial View and Expertise: Local Markets and National Practices
Why Do Personal Clients Choose Northern Trust? Holistic Financial View and Expertise Leveraging national centers of expertise to deliver solutions locally. Full Service in Local Markets 250+ Trust Professionals 225+ Portfolio Managers 375+ Banking Professionals Comprehensive Trust Customized Investm
Slide 29: Service Experience and Client Segment Focus
Why Do Personal Clients Choose Northern Trust? Service Experience and Client Segment Focus Extensive reach in affluent market. 85 PFS Offices in 18 States Projected Annual Over 50% of the U.S. millionaire market resides Household Growth Rates within a 45-minute drive of Northern Trust offices. 2007
Slide 30: The Largest Personal Trust Provider in the U.S.
Why Do Personal Clients Choose Northern Trust? Service Experience and Client Segment Focus The Largest Personal Trust Provider in the U.S. Personal Trust Assets ($ Billions) 1. Northern Trust $206.8 2. Bank of America 122.7 3. JPMorgan Chase 76.3 4. Citigroup 64.7 5. Wachovia 55.1 6. Bank of NY Mell
Slide 31: Wealth Management Group
Why Do Personal Clients Choose Northern Trust? Wealth Management Group Wealth Management Group – Assets Under Custody ($ Billions) Industry Leading Provider to the World’s Wealthiest Families: $195 $183 ~400 family relationships in 15 countries Average relationship size = $450+ million $160 20
Slide 32: Strong New Business Offsetting 2008 Market Headwinds
Personal Financial Services Strong New Business Offsetting 2008 Market Headwinds 9/30/08 vs 9/30/07 PFS Trust, Investment & Servicing Fees* +4.4% PFS Total Revenue* +3.9% PFS Assets Under Custody -4.6% PFS Assets Under Management -4.0% S&P 500 -20.7% Strongest Level of Net New Business Since 2000**
Slide 33: Concluding Thoughts
Concluding Thoughts Northern Trust’s Business Model 9 Attractive Demographic Markets 9 Focused and Conservative Strategy 9 Significant Expertise 9 Organic Growth 9 Consistent Leadership and Philosophy 33 Service Expertise Integrity
Slide 34: Northern Trust Corporation
NORTHERN TRUST Service Expertise Integrity CORPORATION Steven L. Fradkin Executive Vice President & Chief Financial Officer Merrill Lynch Banking & Financial Services Conference New York City November 13, 2008 © 2008 Northern Trust Corporation
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