Bank of America Merrill Lynch’s wealth and investment management arm logged a 22 per cent rise in net income in the first three months of 2011 from a year before, the US banking giant said, boosted by higher net interest margins, fee income and lower credit costs.

The improved performance was achieved on the back of a rise in revenues of 11 per cent to $4.5 billion, driven by “record asset management fees and record brokerage revenue”, the bank said in a statement today. The figures come a day after JP Morgan also reported improved wealth management results

Asset management fees rose 6 per cent from the fourth quarter of 2010 to $1.5 billion, while brokerage income was up 3 per cent from the fourth quarter of 2010 to $890 million, the best quarter for both since the acquisition of Merrill Lynch at the start of 2009.

The provision for credit losses decreased $196 million from a year ago, driven by reserve reductions compared to reserve additions in the year-ago quarter. The decrease was primarily due to improving portfolio trends and lower levels of charge-offs, it said.

Average deposit balances grew 5 percent from the fourth quarter of 2010 to $258.5 billion and average loan balances grew slightly to $100.9 billion, marking the third consecutive quarter of loan growth.

At the end of the first quarter of 2011, the number of Financial Advisors totaled 15,695, and the total number of wealth advisors was 17,201, up by 184 advisors. At the end of the quarter, the wealth and investment management segment held $664.4 billion of assets, up from $630.4 billion at the end of December, 2010, the bank said. (The AuM figure includes $98 billion of Columbia Management’s long-term asset management business through the date of sale on 1 May, 2010).

For BofA as a whole, it reported net income of $2.0 billion, or $0.17 per diluted share, down from $3.2 billion, or $0.28 per diluted share, in the year-ago period and a net loss of $1.2 billion, in the fourth quarter of 2010.

“Results for the most recent quarter were positively affected by lower credit costs, gains from equity investments, and higher asset management fees and investment banking fees. These factors were partially offset by higher legacy mortgage-related costs, higher litigation expenses, and lower sales and trading revenue from the record levels reported in the first quarter of 2010,” the bank said.

The bank had a Tier 1 common capital ratio of 8.64 per cent at the end of March, up slightly from the end of December.