Northern Trust Corp. in Chicago is laying off about 700 workers worldwide and eliminating more jobs through attrition as part of a broad initiative to trim annual overhead by $250 million.

The custody bank announced the cost-cutting measures in its fourth-quarter earnings release Wednesday morning.

With low interest rates continuing to crimp profits, Chairman and Chief Executive Frederick Waddell said that management has been actively analyzing all aspects of Northern Trust's business and determined that job cuts are necessary in order to "sustainably improve productivity and profitability." He added that he expects the company to realize the full impact of cost-cutting initiatives in 2013.

Waddell did not specify where the job cuts would take place, but Crain's Chicago Business reported Wednesday that the company has already laid off about 350 workers in Europe. He added that Northern Trust will continue to invest and hire "to support the growth of our business."

For the quarter, Northern Trust earned $130.2 million, down 17% from the fourth quarter of 2010. Earnings per share also fell 17%, to 53 cents, or 15 cents shy of consensus analysts' estimates, according to Thomson Reuters.

Though fee income from trust services rose 7% year over year, profits were hurt by a weak net interest margin of 1.30% and a 27% decline in income from foreign exchange services. The company also took a $61 million, pre-tax restructuring charge associated with the cost-cutting measures.

Northern Trust was one of three custody banks that reported earnings Wednesday. Bank of New York Mellon Corp. said its fourth-quarter profit fell 26% from the prior year, to $505 million, due to slumping revenues and a restructuring charge associated with cost-cutting initiatives of its own.

Rival State Street Corp. saw its profits increase 4.4%, to $454 million, in part due to expense cuts it made earlier in the year that included roughly 850 layoffs.

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