Financial Results
Net Income Falls At Bank Of America's GWIM Unit
Net income at Bank of America’s Global Wealth and Investment Management business decreased 22 per cent on a year-over-year basis for the fourth quarter, to $249 million.
Total revenue at the wealth management unit held steady at $4.2 billion, while noninterest expense rose 5 per cent from a year ago to $3.6 billion. Meanwhile, provision for credit losses decreased $37 million over the same period.
Asset management fees increased 4 per cent from the year-ago quarter to $1.5 billion, as assets under management grew to $647.1 billion, from $643.3 billion at the end of 2010.
For the full year, net income at the GWIM unit was $1.6 billion, compared to $1.3 billion for the prior year. Net revenues also rose, hitting $17.4 billion, having been $16.3 billion in 2010.
In a year when many firms made commitments to ramping up their client-facing workforce amid cutbacks elsewhere, Bank of America said that it’s Global Wealth and Investment Management business added nearly 1,700 financial advisors last year.
For the business as a whole, BofA said it logged net income of $2 billion for the fourth quarter, compared to a net loss of $1.2 billion a year earlier. Revenue, net of interest expense and on a fully taxable-equivalent basis, rose 11 per cent to $25.1 billion.
For the full year, net income was $1.4 billion at the firm, compared with a net loss of $2.2 billion for 2010. This was despite a 15 per cent drop in revenue, net of interest expense and on a fully taxable-equivalent basis, to $94.4 billion.
“Our fourth-quarter results reflect the aggressive steps we have been taking to strengthen the balance sheet and position the company for long-term growth," said chief financial officer Bruce Thompson.
“During the quarter, we significantly increased capital and liquidity. Our Tier 1 common equity ratio increased to 9.86 per cent from 8.65 per cent in the third quarter of 2011, and our time-to-required funding increased to 29 months from 27 months. For 2012, our focus is to continue to build capital and liquidity and manage expenses."
