Northern Trust to cut about 450 jobs

BOSTON (Reuters) - Trust bank and asset manager Northern Trust Corp (NTRS.O) said on Monday it will cut about 450 jobs, or 3.7 percent of its global workforce, joining its rivals in shrinking staff due to tough market and economic conditions.

Northern Trust, which provides private banking, investment management and global custody services, said it expects to take a pretax charge of about $20 million to $25 million, or 5 cents to 7 cents a share, in the fourth quarter related to the cuts and other costs.

The cuts, which will start in the New Year, are expected to generate about $50 million to $60 million in annualized pretax savings and will not impact client services, the firm said in a statement. A company spokeswoman said the firm had 12,100 staff as of September 30.

Rival trust banks and asset managers State Street Corp (STT.N) and Bank of New York Mellon (BK.N) have both announced cuts of 1,800 jobs.

Northern Trust is among the banks to have received funds under the U.S. Treasury Department's rescue package, which is intended to shore up balance sheets in response to the credit crisis.

Some analysts viewed Northern's job cuts favorably but said market conditions would weigh on the firm.

"We like the fact that management is being proactive with expenses and view this as a positive. However, at this time, it is hard for us to get more bullish on the stock," Sandler O'Neill & Partners wrote in a note to clients.

The research firm maintained its "hold" rating on the stock but lowered its 12-month price target by $9 to $50 and cut its fourth-quarter 2008 and full-year 2009 earnings estimates.

Northern Trust shares were off 0.5 percent at $45.58 by early afternoon on Monday, outperforming a 1.4 percent fall in the Standard & Poor's asset management and custody banks index .15GSPAMCB.

(Reporting by Muralikumar Anantharaman in Boston and Eric Yep in Bangalore)