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Northern Trust is a bank that it is easy to ignore. But it’s a mistake to do so. It has carved out a niche in two of the less glamorous parts of the banking industry – private financial services and corporate and institutional services. And the jewel in its crown is a world-class custody business that is growing faster than any of its competitors, both at home and abroad. Northern is not the largest of the custody banks. That title goes to the newly-combined Bank of New York and Mellon bank, which will have almost $18 trillion of assets under custody when its merger completes in early July. It is also dwarfed by State Street, which has around $12 trillion under custody.
But Northern is growing faster than any of the big players. From 2001 to 2006, it achieved a compound annual growth rate of 16.5%, more than doubling its assets under custody to $3.5 trillion. Furthermore, all but a tiny fraction of that CAGR was achieved organically, at 16.3%. Contrast that with Bank of New York’s organic growth of 13.5%