Northern Trust cuts 450 jobs, sees $25 mil charge

Northern Trust Corp., the Chicago- based custody bank, will eliminate 450 jobs next year to help save as much as $60 million because the bear market has reduced its revenue from overseeing client assets.

The bank will take a pretax charge of as much as $25 million, or 7 cents a share, in the fourth quarter, Northern Trust said in a statement today. The cuts, representing about 4 percent of jobs, will begin after Jan. 1 and will include eliminating positions through attrition.

Banks, brokerages and money managers have announced more than 200,000 job cuts worldwide since last year’s collapse of the subprime-mortgage market. The Standard & Poor’s 500 Index has dropped 40 percent in 2008, the worst performance since 1931.

Bank of New York Mellon Corp., the largest custody bank with $22.4 trillion in assets, said Nov. 20 will eliminate 1,800 positions, or 4 percent of its workforce. Boston-based State Street Corp., the third-biggest at $14.1 trillion, said Dec. 4 that it will ax about 1,700 jobs, or 6 percent of staff. Northern Trust’s assets under custody this year dropped 14 percent to $3.53 trillion as of Sept. 30.

As a custody bank, Northern Trust provides record-keeping and administrative services to clients such as mutual funds and pension plans. Most of its fees are tied to the amount of money it oversees and invests for customers. The company’s invested assets dropped 14 percent this year to $652.4 billion.

Northern Trust made the announcement before the start of regular U.S. trading. Its shares rose 53 cents, or 1.2 percent, to $46.32 at 9:37 a.m. in Nasdaq Stock Market composite trading. The stock declined 40 percent this year through Dec. 12.