Northern Trust (NTRS) risk factors, FY2025 10-K

Market Risks

1. 01We are dependent on fee-based business for a majority of our revenues, which may be affected adversely by market volatility, a downturn in economic conditions, underperformance and/or negative trends in investment preferences41% rewritten
2. 02Changes in interest rates could affect our earnings negatively22% rewritten
3. 03Although we have policies and procedures in place to assess and mitigate potential impacts of interest rate risks, if our assumptions about any number of variables are incorrect, these policies and procedures to mitigate risk may be ineffective, which could impact earnings negativelyNew
4. 04Changes in the monetary, trade and other policies of various regulatory authorities, central banks, governments and international agencies may reduce our earnings and affect our growth prospects negatively
5. 05Macroeconomic conditions and uncertainty in the global economy, including the financial stability of various regions or countries across the globe, including the risk of defaults on sovereign debt and related stresses on financial markets, could have a significant adverse effect on our earnings23% rewritten
6. 06Declines in the value of securities held in our investment portfolio could affect us negatively
7. 07Changes in a number of particular market conditions, including in foreign currency exchange rates, cross-border investing activity and the demand for borrowing or lending securities, could affect our earnings negatively37% rewritten
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Operational Risks

1. 09We are subject to many types of operational risks that could affect our earnings negatively72% rewritten
2. 10We are highly dependent on information technology systems and networks, many of which are operated by third parties, and any failures of, or disruptions to, our or such third parties’ technological systems or networks could materially and adversely affect our business48% rewritten
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4. 12Breaches of our security measures, including, but not limited to, those resulting from cyber-attacks or other information security incidents, may result in losses74% rewritten
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6. 14Errors, breakdowns in controls or other mistakes in the provision of services to clients or in carrying out transactions for our own account can subject us to liability, result in losses or have a negative effect on our earnings in other ways
7. 15Our dependence on technology, and the need to update frequently our technology infrastructure, exposes us to risks that also can result in losses
8. 16A failure or circumvention of our controls and procedures could have a material adverse effect on our business, financial condition and results of operations
9. 17Failure of any of our third-party vendors (or their vendors) to perform can result in losses
10. 18We are subject to certain risks inherent in operating globally which may affect our business adversely
11. 19Failure to control our costs and expenses adequately could affect our earnings negatively
12. 20Pandemics, natural disasters, global climate change, acts of terrorism, geopolitical tensions, and global conflicts may have a negative impact on our business and operations23% rewritten

Credit Risks

1. 21Failure to evaluate accurately the prospects for repayment when we extend credit or maintain an adequate allowance for credit losses can result in losses or the need to make additional provisions for credit losses, both of which reduce our earnings
2. 22Market volatility and/or weak economic conditions can result in losses or the need for additional provisions for credit losses, both of which reduce our earnings
3. 23The failure or perceived weakness of any of our significant counterparties could expose us to loss

Liquidity Risks

1. 24If we do not manage our liquidity effectively, our business could suffer
2. 25If the Bank is unable to supply the Corporation with funds over time, the Corporation could be unable to meet its various obligations
3. 26We may need to raise additional capital in the future, which may not be available to us or may only be available on unfavorable terms
4. 27Any downgrades in our credit ratings, or an actual or perceived reduction in our financial strength, could affect our borrowing costs, capital costs and liquidity adversely

Regulatory and Legal Risks

1. 28Failure to comply with regulations and/or supervisory expectations could result in penalties and regulatory constraints that restrict our ability to grow or even conduct our business, or that reduce earnings74% rewritten
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3. 30We are subject to complex and evolving laws, regulations, rules, standards and contractual obligations regarding data privacy and security, which could increase the cost of doing business, compliance risks and potential liability68% rewritten
4. 31We may be impacted adversely by claims or litigation, including claims or litigation relating to our fiduciary responsibilities
5. 32We may be impacted adversely by supervisory and/or regulatory enforcement matters
6. 33We may fail to set aside adequate reserves for, or otherwise underestimate our liability relating to, pending and threatened claims, with a negative effect on our earnings
7. 34While regulatory standards remain largely aligned following the UK’s withdrawal from the EU, commonly referred to as “Brexit,” it is possible that future divergence may occur between the UK and EU; therefore, the final impact remains uncertainNew
8. 35If we fail to comply with legal standards, we could incur liability to our clients or lose clients, which could affect our earnings negatively

Strategic Risks

1. 36If we are not able to attract, retain and motivate personnel, our business could be negatively affected
2. 37If we do not develop and execute strategic plans successfully, our growth may be impacted negatively
3. 38We are subject to intense competition in all aspects of our businesses, which could have a negative effect on our ability to maintain satisfactory prices and grow our earnings
4. 39Damage to our reputation could have a direct and negative effect on our ability to compete, grow and generate revenue
5. 40We need to invest in innovation constantly, and the inability or failure to do so may affect our businesses and earnings negatively32% rewritten
6. 41Failure to understand or appreciate fully the risks associated with development or delivery of new product and service offerings may affect our businesses and earnings negatively
7. 42Our success with large, complex clients requires an understanding of the market and legal, regulatory and accounting standards in various jurisdictions
8. 43We may take actions to maintain client satisfaction that could result in losses or reduced earnings
9. 44Our operations, businesses and clients could be materially adversely affected by the effects of climate change or concerns related thereto75% rewritten
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Other Risks

1. 46The systems and models we employ to analyze, monitor and mitigate risks, as well as for other business purposes, are inherently limited, may not be effective in all cases and, in any case, cannot eliminate all risks that we face49% rewritten
2. 47Changes in tax laws and interpretations and challenges to our tax positions could affect our earnings negatively
3. 48Changes in accounting standards may be difficult to predict and could have a material impact on our consolidated financial statements
4. 49Our ability to return capital to stockholders is subject to the discretion of our Board of Directors and may be limited by U.S. banking laws and regulations, applicable provisions of Delaware law, or our failure to pay full and timely dividends on our preferred stock and the terms of our outstanding debt24% rewritten