In order to expand its presence in Luxembourg and provide fund administration service in Switzerland, Northern Trust CorporationNTRS entered into a deal with UBS AG UBS to acquire UBS Asset Management's fund administration servicing units in these markets.
This acquisition, which is expected to be closed in the second half of 2017, will make Northern Trust a leading administrator in Switzerland. Also, the deal will make it one of the top 10 asset servicing providers in terms of assets under administration in the Luxembourg market.
Terms of Agreement
The acquisition will enable Northern Trust to provide fund administrative services for funds with approximately $413 billion (CHF420 billion) in assets (as of Dec 31, 2016).
The existing clients of UBS Asset Management will continue to get support from their current relationship management teams. Also, it will continue to offer Management Company, White Labelling and Representative Services to its clients.
This acquisition will not only help Northern Trust expand its current client base but also will allow it to diversify product and service offerings across Europe. This acquisition, as an initiative to tackle the macroeconomic headwinds, shall boost the company's financial results. The deal also reflects its strong capital and balance sheet position.
Over the last couple of years, Northern Trust remained focused on initiating new businesses. As a result, it has been successful in adding institutional clients and assets.
Northern Trust's stock increased 25.5% over the last two years, underperforming the 28.5% gain for the Zacks categorized Banks - Major Regional Industry.
Northern Trust currently carries a Zacks Rank #3 (Hold).
A couple of better-ranked finance stocks are JPMorgan Chase & Co. JPM and M&T Bank Corporation MTB . Both these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
JPMorgan has witnessed an upward earnings estimate revision of 1.4% for the current year in the past 60 days. Also, its share price is up 62.2% over the last one year.
M&T Bank has witnessed an upward earnings estimate revision of 2.3% for the current year in the past 60 days. Also, its share price is up 58.5% over the last one year.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.