The global wealth and investment management arm of Bank of America, still adapting after the firm bought debt-laden Merrill Lynch two years ago, logged a $369 million year-on-year drop in net income to $1.347 billion, the US bank said today.

The drop was caused by higher noninterest expense and the tax-related effect from the sale of the Columbia long-term business, partially offset by higher noninterest income and lower credit costs, it said in a statement.

Revenue increased $534 million from a year earlier to $16.7 billion, driven by higher asset management fees and transactional revenue, it continued. Assets under management fell to $643.9 billion from $749.8 billion at the end of 2009. BofA explained by the drop by pointing out that AuM and total client balances include $114.2 billion and $114.6 billion, respectively, of Columbia Management long-term asset management business through the date of sale on 1 May last year.

The bank is the latest top-flight firm to report fourth quarter and full-year results, following the likes of Morgan Stanley, Wells Fargo, Goldman Sachs, Citigroup and JP Morgan. In general, most of these banks’ wealth management operations enjoyed an improvement, or at least relative stability, in their results.

BofA said that or the year in wealth and investment management, provision for credit losses decreased $415 million from a year ago to $646 million, driven by lower net charge-offs in the consumer real estate and commercial portfolios, along with the absence of a prior-year single large commercial charge-off.

In the fourth-quarter, net income fell by $197 million to $332 million compared with the same period last year, reflecting higher provision for credit losses.

 For the whole of BofA, it recorded a net loss for the whole of 2010 of $2.2 billion, due to goodwill impairment charges of $12.4 billion. In the fourth quarter, it booked $2.0 billion of impairment charges on its home loan and insurance segment.

The bank also logged $2.6 billion of litigation expenses last year.