Northern Trust Corp., known as the "old gray lady" of Chicago's LaSalle Street, is going on an extended journey.
William A. Osborn, chief executive of the $22 billion-asset bank, used his keynote address to the Bankers Association for Foreign Trade conference here this week to discuss his bank's aspirations for broadening the global reach of its custody business.
"I want to say that Northern Trust has emerged as a global bank with a higher degree of specialization in several attractive markets," Mr. Osborn said. "It will not be too long before we ... are operating in 100 or more markets."
Although Northern Trust operates two basic businesses-personal financial services and the administration of assets for corporate and institutional clients worldwide-it is the latter business, particularly custody, that has the greatest potential for overseas expansion, he said.
As clients such as mutual fund and pension fund companies chase the high-growth markets of Asia, Eastern Europe, and Latin America, Northern Trust wants to be there with a full range of custodial services.
Custodial banks such as Northern Trust, State Street, and Chase Manhattan Corp. hold securities in safekeeping for clients and buy, sell, and deliver securities upon request.
The bank now provides custodial services to clients in 72 countries. As of last December, it had global assets of about $108 billion under administration, a 27% increase from the previous year.
But Mr. Osborn said that Northern Trust would expand its global custody network to at least 80 countries by year's end, through entry into such markets as Lithuania, Croatia, Romania, Malta, Bolivia, and Kazakhstan.
"In these markets, the need to provide a secure custody service and foreign exchange and deposit-related services is very challenging and certainly not without risk," Mr. Osborn said. "But the investment opportunities offered by the emerging markets continue to attract more and more of our clients."
Analysts who follow the bank can't disagree with this strategy.
"They want to ramp up their services to clients that want to diversify into other countries," said Thomas F. Theurkauf, an analyst at Keefe, Bruyette & Woods Inc. "At the end of the day, they want to be a top provider of custody services, though not necessarily the largest."
