Northern Trust Corporation reduced its prime lending rate from 7.00% to 6.75%, a 0.25‑percentage‑point cut that takes effect on December 11, 2025. The move aligns the bank’s pricing with the Federal Reserve’s policy stance and positions it to remain competitive as other financial institutions adjust their own rates.
The rate cut follows a strong Q3 2025 earnings report in which the bank posted net income of $457.6 million, down 2% from the prior year, and earnings per share of $2.29, up 16.8% from $1.96. Revenue rose 3.1% to $2.03 billion, driven by solid demand in trust and capital‑markets segments. The pre‑tax margin expanded by 200 basis points to 12.5%, while the net‑interest margin increased to 1.70%, up 2 basis points year‑over‑year, reflecting disciplined cost management and a favorable mix of higher‑margin lending products.
Management highlighted that the prime rate reduction is part of a broader strategy to support loan growth while preserving margin stability. CEO Michael O’Grady noted that “the bank delivered strong third‑quarter results with solid revenue growth across trust fees, capital markets and net interest income, and that lending and balance‑sheet measures remain sound.” The bank’s strong balance sheet—$18.2 trillion in assets under custody and $1.8 trillion in assets under management as of September 30—provides the liquidity foundation for the rate adjustment.
The bank previously lowered its prime rate from 7.25% to 7.00% effective October 30, 2025, indicating a trend of incremental rate adjustments in response to the low‑interest‑rate environment. The current 6.75% rate remains roughly three percentage points above the federal funds rate, maintaining a competitive spread while offering clients cheaper borrowing costs. The cut is expected to increase loan volumes, particularly in the institutional and high‑net‑worth segments, and to generate additional fee income as the bank captures a larger share of the market.
Northern Trust’s guidance for the remainder of 2025 remains unchanged, but the company signals confidence in sustaining profitability through continued cost discipline and strategic investments in high‑return verticals. The rate cut, combined with the bank’s robust earnings performance, underscores its commitment to balancing growth with margin preservation in a challenging macroeconomic backdrop.
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