James Mitchell's questions to Northern Trust Corp (NTRS) leadership • Q4 2024
Question
James Mitchell questioned the outlook for organic growth in Asset Servicing, given the focused strategy on back-office custody, and the trade-off with improving margins. He also asked if competition and pricing pressure have increased for pure custody deals as peers adopt similar strategies.
Answer
Chairman and CEO Michael O'Grady explained that the focus on scalable growth, particularly in the asset owner segment, allows for bringing on less resource-intensive business. He stated that market pricing conditions have actually been favorable, noting that Northern Trust declined to bid on deals with poor pricing in 2024 and that the new business portfolio was booked at a higher margin as a result of this discipline.