Northern Trust jumps on report of possible HSBC offer

Northern Trust Corp. rose the most in three months in U.S. trading after the U.K.'s Daily Mail newspaper said HSBC Holdings Plc may make an offer for the Chicago-based custody bank.

The stock climbed 5.3 percent to $50.57 at 4 p.m. in Nasdaq Stock Market trading, the most since July 7. Northern Trust has declined 3.5 percent this year, while the 15-member Standard and Poor's asset management and custody banks index is little changed.

HSBC is considering a $65-a-share bid for Northern Trust to expand its prime-custody operations, the Mail said in its Market Report, without saying where it got the information. Paul Harris, a spokesman for HSBC in London, declined to comment, as did John O'Connell, a Northern Trust spokesman.

Europe's largest bank earlier this month abandoned a bid to buy a $7.3 billion stake in South Africa's Nedbank Group Ltd. Lenders are under pressure to hold more capital than the minimum international regulators agreed in Basel last month.

Northern Trust last week posted a 17 percent decrease in third-quarter earnings as low interest rates squeezed lending and money-market revenue. Custody banks keep records, track performance and lend securities to institutional investors such as pension plans and hedge funds. Northern Trust also manages mutual funds and institutional accounts.