July 17 (Reuters) - Asset and wealth manager Northern

Trust ( NTRS ) posted a more than two-fold jump in

second-quarter profit on Wednesday, thanks to higher fee income

and an accounting gain of $878.4 million from a stock exchange

deal with Visa.

Hopes of a soft landing for the U.S. economy and investor

frenzy around artificial intelligence have lifted the stock

market to record highs this year, leading to a spurt in

Northern's assets under custody.

Trust, investment and other servicing fees rose 6%, to $1.17

billion, driven by a 14% jump in assets under custody or

administration to $16.57 trillion.

Fees earned from managing and servicing client assets are

the biggest source of revenue for the 135-year old company.

Northern provides wealth management, asset management and

banking services to institutions, affluent families and

individuals.

State Street and BNY, which posted results

last week, also saw rising client asset values boosting their

fee-based incomes.

Chicago, Illinois-based Northern also benefited from a plan

to exchange some of its Class B shares in Visa, the world's

largest payment network.

Meanwhile, Northern's net interest income - the difference

between what it earns on assets and pays out on liabilities -

rose 2%, to $522.9 million on a reported basis, driven by higher

client deposits. Its NII is highly sensitive to deposit levels

and largely driven by client deposit behavior.

Foreign exchange trading income surged 17%, to $58.4

million, driven by higher client volumes.

Northern's earnings allocated to common and potential common

shares rose to $884.3 million, or $4.34 per share, in the three

months ended June 30, from $323.7 million, or $1.56 per share, a

year earlier.

Shares of the company have risen 7.6% so far this year,

compared to a 9.5% and 24.9% jump, respectively, for peers State

Street and BNY.