US CREDIT UPDATE: Northern Trust 1Q’26 Results
Northern Trust 1Q’26 Results
(NTRS; A2/A+/A+, S/S/S)
Credit neutral. NTRS reported strong Q1’26 results, with net income of $525.5 million up 34% y/y. Total revenue on a fully taxable equivalent basis rose 14% y/y to $2.21 billion. Trust, investment and other servicing fees rose by 11% to $1.34 billion, boosted by strong financial market conditions, healthy client inflows and new business. Net interest income (FTE) rose 15% to $661.6 million as average earning assets grew by 11%. Assets under custody/administration stand at $18.6 trillion and assets under management of $1.8 trillion. Capital ratios stayed well above regulatory minimums, with a Common Equity Tier 1 ratio of 12.0% under the standardized approach. The company returned 100% of earnings to common shareholders through $150.8 million of dividends and $358.9 million of share repurchases.
Q1’26 RESULTS
• Net interest income FTE $661.6 million, +15% y/y, estimate $627.6 million (Bloomberg Consensus)
• Adjusted revenue FTE $2.21 billion, estimate $2.22 billion
• Recovery of credit losses $3.0 million vs. provision $1.0 million y/y, estimate provision $4.11 million
• Return on average common equity 17.4% vs. 13% y/y, estimate 16.9%
• Net interest margin FTE 1.75% vs. 1.69% y/y, estimate 1.77%
• Trust, investment & other servicing fees $1.34 billion, +11% y/y, estimate $1.31 billion
• Non-interest expenses $1.51 billion, +6.4% y/y, estimate $1.51 billion
• Assets under management $1.78 trillion, +11% y/y, estimate $1.81 trillion
• Assets under custody $14.78 trillion, +11% y/y, estimate $14.94 trillion
Source: MNI, company reports, Bloomberg LP
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USDCAD TECHS: Key Resistance Remains Intact For Now
- RES 4: 1.3845 High Jan 22
- RES 3: 1.3800 High Jan 23
- RES 2: 1.3753 High Mar 03 and key resistance
- RES 1: 1.3748 High Mar 19
- PRICE: 1.3714 @ 17:00 GMT Mar 20
- SUP 1: 1.3670/3526 20-day EMA / Low Mar 09
- SUP 2: 1.3482 Low Jan 30 and the bear trigger
- SUP 3: 1.3420 Low Sep 25 ‘24
- SUP 4: 1.3400 50.0% retracement of the 2021 - 2025 uptrend
Attention in USDCAD is on key near-term resistance and a bull trigger at 1.3753, the Mar 3 high. A clear break of this hurdle would confirm a range breakout, highlight a stronger bull cycle and confirm a clear breach of the 20- and 50-day EMAs. This would open 1.3800 initially, the Jan 23 high. For bears, a reversal would refocus attention on 1.3482, the Jan 30 low and bear trigger.
AUDUSD TECHS: Trend Needle Points North
- RES 4: 0.7284 High Jun’22
- RES 3: 0.7256 2.500 proj of the Nov 21 - Dec 10 - 18 price swing
- RES 2: 0.7208 61.8% of the Feb 25 ‘21 - Apr 9 ‘25 bear leg
- RES 1: 0.7187 High Mar 11 and the bull trigger
- PRICE: 0.7039 @ 16:59 GMT Mar 20
- SUP 1: 0.6979 50-day EMA and key support
- SUP 2: 0.6944 Low Mar 3
- SUP 3: 0.6897 Low Feb 6
- SUP 4: 0.6834 Low Jan 23
The trend condition in AUDUSD is unchanged, it remains bullish and the pair continues to trade above key support at 0.6979, the 50-day EMA. A clear break of this average would undermine the current bullish theme. The moving average set-up is in a bull mode position and this continues to highlight a dominant medium-term uptrend. A resumption of the trend would open 0.7208 next, a Fibonacci retracement point.
BOE: Summary of Analyst Views
- Just over half (11/21) of the analyst reviews that we have read still look for the next move from the MPC to be a cut. 4/21 look for a hike while 6/21 look for the Bank to remain on hold for their forecast horizon.
- In terms of those expecting hikes Daiwa, JP Morgan and Rabobank all look for the first hike in April with the former two looking for a 4.25% peak and Rabobank looking for a one-and-done. NatWest Markets look for the first hike in Q4-26 but then expect two further hikes in Spring 2027 to the highest peak of 4.50% seen in any analyst base case that we have seen.
- Note that of these analysts, 3/4 (all except NatWest Markets) expect cuts back to a least current levels within their forecast horizon.
- In terms of those looking for the next move to be a cut, none look for a move in April with 5 analysts expecting a June cut, 1 for July, 2 for November and the remaining 3 looking for cuts to begin in 2027.
- UniCredit has the lowest terminal rate, continuing to look for 2.75% while 4/21 analysts look for 3.00% terminal, 6/21 analysts look for 3.25% and 1/21 analyst looks for 3.50%. As noted above, NatWest Markets looks for hikes with no reversal but the remaining 8/21 analysts look for no moves from 3.75% throughout the forecast horizon.
