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North
Message to Shareholders
Michael O’Grady — Chairman, President and Chief Executive Officer
In times of uncertainty, our clients have always looked to us – as a guide, as an ally, as an advisor to help guide them to the right path forward. And 2020 was no exception. Even more trusted, more committed, more clear: the arrow points True North.
SHAREHOLDER MESSAGE
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Performance
Financial Highlights
Jason Tyler — Chief Financial Officer
In a year unlike any other, we maintained strong organic growth, driven by our multi-year strategic initiatives. While interest rate headwinds drove net income lower, return on common equity remained within target. Our commitment to delivering long-term value continues unabated, supported by the strength of our capital position, the quality of our balance sheet, and the continued trust placed in us by an exceptional portfolio of clients.
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Expertise
The expertise we have developed over more than 130 years is the bedrock upon which we have built each client success. It is a standard of excellence that permeates every service and offering—from wealth management to asset management to asset servicing. As a guiding force for our clients, it is never static, continuously evolving as we address the requirements and opportunities of shifting markets and a changing world.
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Service
From new investment imperatives to financial planning advice to process re-engineering: the needs of our clients are always evolving. In any given year, responding to those needs requires foresight, a sharp focus on each client’s unique financial profile, and a flexibility born of our long-term perspective. In 2020, the COVID-19 pandemic demanded even more. Our ability to respond was never more evident, and never more important, to the fundamental health of our clients’ portfolios, businesses, and operations, demonstrating true service.
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Relationships
Our clients’ horizons and needs are multifaceted, but our long-term commitment to their financial well-being and growth is singular. It underlies the quality of service we deliver. It inspires the expertise we deploy. It informs the investments we prioritize. It is precisely why Northern Trust’s expansive portfolio of clients persists—and continues to grow—no matter the economic climate.
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Innovation
At Northern Trust, we innovate at critical junctures, shaping the curve as technological, market and workplace trends mature, and sustained value can be realized–within our own operations and for our clients. 2020 was a year in which such innovations were both well-prepared responses to unforeseen events and well-paved realizations of profound opportunities.
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Inclusion
We believe that the broadest cross-section of voices strengthens our foundation for growth and contributes immeasurably to our integral relationship with society. We also believe that the pursuit of diversity, equity and inclusion is no small task. It must be practiced within our walls, amplified by our leaders, and reflected in the composition of our clientele. In 2020, we reaffirmed our commitment to it, accelerated our efforts, and scaled our programs for even greater impact.
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Community
While we are a global company highly attuned to the macroeconomic forces that impact our clients’ financial strategies, we are also sharply focused on the needs of the communities in which we operate. In 2020, the need was immediate: capital infusion, including funds from the Paycheck Protection Program, for local businesses and organizations. But it was also systemic, meriting an even more purposeful commitment to long-term local impact at a global scale.
Play Message from Shana Hayes
Shana Hayes
In 2020, Northern Trust invested $110 million into the CDFI Fund, which works with mission-driven financial institutions to inject new sources of capital – including Paycheck Protection Program loans – into neighborhoods that lack access to traditional financing. This funding was particularly crucial in a year in which small businesses and non-profit groups faced urgent demands due to challenges from COVID-19.
2020 Investment in CDFI Fund
$110M
For 130 years, Northern Trust and its employees have strived to make our communities stronger. In 2020 we built on that heritage, introducing a new, highly focused philanthropic strategy that concentrates our volunteerism and contributions on four key areas of fundamental impact: educational excellence, food security, accessible healthcare and affordable housing.
By extending access to these essential human needs, our goal is to reduce the economic opportunity gap. Northern Trust is committed to creating more equitable possibilities to achieve long-term financial success for those who face unfair hurdles because of their race, ethnicity, gender, geography or socio-economic conditions.
While this philanthropic strategy extends globally, it is tailored to local needs of our global offices. Programs we supported in 2020 are now providing shelter for children in India and ensuring health services for vulnerable populations in London. And our dedication to our headquarter city of Chicago remains: We committed $20 million over the next five years to expand access to resources that address essential human needs of young people on Chicago’s South and West Sides.
Commitment to Expand Access to Essential Human Needs in Chicago
$20M
We have also expanded opportunities for our employees to help those in need. In 2020, Northern Trust employees around the globe successfully pivoted their volunteer efforts to serve charitable and non-governmental organizations virtually. Our year-long efforts included a special initiative in October when our employees provided thousands of volunteer hours to nearly 180 organizations and collected food and other essentials for those hit hardest by COVID-19.
Number of Organizations
180
Contributions to organizations serving frontline workers
$3M
Reinforcing our company-wide response to the pandemic, Northern Trust also provided $3 million to organizations around the world serving frontline healthcare workers and people struggling to make ends meet. In a challenging and unprecedented year, Northern Trust’s 130-year commitment to our communities remained unchanged. We look forward to building upon this legacy to help close the opportunity gap and drive individual advancement and broader wealth creation.
Shana Hayes
Senior Vice President, Director of Corporate Philanthropy
Senior Vice President, Director of Corporate Philanthropy
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Inclusion
Inclusion