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

1. We 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 preferences.
2. Changes in interest rates could affect our earnings negatively.Interest rates
3. Changes 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.
4. Macroeconomic 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 earnings.
5. Declines in the value of securities held in our investment portfolio could affect us negatively.
6. Changes 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 negatively.

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1. We are subject to many types of operational risks that could affect our earnings negatively.
2. We 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 business.
3. Breaches of our security measures, including, but not limited to, those resulting from cyber-attacks or other information security incidents, may result in losses.Cybersecurity
4. Errors, 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.
5. Our dependence on technology, and the need to update frequently our technology infrastructure, exposes us to risks that also can result in losses.
6. A failure or circumvention of our controls and procedures could have a material adverse effect on our business, financial condition and results of operations.
7. Failure of any of our third-party vendors (or their vendors) to perform can result in losses.
8. We are subject to certain risks inherent in operating globally which may affect our business adversely.
9. Failure to control our costs and expenses adequately could affect our earnings negatively.
10. Pandemics, natural disasters, global climate change, acts of terrorism, geopolitical tensions, and global conflicts may have a negative impact on our business and operations.

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1. Failure 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. Market 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. The failure or perceived weakness of any of our significant counterparties could expose us to loss.

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1. If we do not manage our liquidity effectively, our business could suffer.
2. If the Bank is unable to supply the Corporation with funds over time, the Corporation could be unable to meet its various obligations.
3. We 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. Any 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.

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1. Failure 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 earnings.
2. We are subject to extensive and evolving government regulation and supervision that impacts our operations. Changes by the U.S. and other governments to laws, regulations and policies applicable to the financial services industry could heighten the challenges we face and make regulatory compliance more difficult and costly.
3. We 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 liability.
4. We may be impacted adversely by claims or litigation, including claims or litigation relating to our fiduciary responsibilities.
5. We may be impacted adversely by supervisory and/or regulatory enforcement matters.
6. We 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. The ultimate impact on us of regulatory divergence between the United Kingdom and the European Union remains uncertain.
8. If we fail to comply with legal standards, we could incur liability to our clients or lose clients, which could affect our earnings negatively.

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1. If we are not able to attract, retain and motivate personnel, our business could be negatively affected.
2. If we do not develop and execute strategic plans successfully, our growth may be impacted negatively.
3. We 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. Damage to our reputation could have a direct and negative effect on our ability to compete, grow and generate revenue.
5. We need to invest in innovation constantly, and the inability or failure to do so may affect our businesses and earnings negatively.
6. Failure 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. Our success with large, complex clients requires an understanding of the market and legal, regulatory and accounting standards in various jurisdictions.
8. We may take actions to maintain client satisfaction that could result in losses or reduced earnings.
9. Our operations, businesses and clients could be materially adversely affected by the effects of climate change or concerns related thereto.
10. The 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 face.
11. Changes in tax laws and interpretations and challenges to our tax positions could affect our earnings negatively.
12. Changes in accounting standards may be difficult to predict and could have a material impact on our consolidated financial statements.
13. Our 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 debt.

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