A roundup of the major banks' financial results during the second three months of 2022 and the full year. (Results may be revised.)
Here is a summary of the results from a range of the major banking groups and some other financial actors around the world. The results focus on the largest institutions which provide wealth management. Not all banks report on a calendar year schedule, and not all the institutions are alike, so the results from standalone institutions such as Julius Baer should be viewed differently from wealth management results embedded within a larger institution. These results may be subsequently revised. Not all the banks reported on the same day, so the exchange rate comparisons with the dollar have been removed. We hope readers find it useful to see these figures collated in one article. To comment, email firstname.lastname@example.org
Its second-quarter results show that revenue rose by a better-than-expected 11 per cent from the prior-year period, driven by increased rates, client activity in markets and continued momentum in the US cards businesses. This was partially offset by a slowdown in investment banking activity as well as investment fee headwinds in global wealth management. Revenue reached $19.6 billion in the second quarter, more than $1 billion over estimates, with growth in both net interest income as well as non-interest revenue.
Higher net interest income was primarily driven by the benefits of higher rates as well as strong volumes across institutional clients' group, personal banking and wealth management. Global wealth management revenues of $1.9 billion were nevertheless flat, as investment fee headwinds, particularly in Asia, were offset by growth in average deposits and loans.
Within the asset and wealth management arm – which includes private banking – JP Morgan said net income was $1.0 billion, down 13 per cent on a year ago. Net revenue was $4.3 billion, up 5 per cent, predominantly driven by growth in deposits and loans on higher balances and margins, partially offset by investment valuation losses compared with gains in the prior year and lower performance fees. Noninterest costs rose 13 per cent to $2.9 billion, driven by higher structural costs and investments in the business, including compensation, and higher volume- and revenue-related expense, including distribution fees.
It announced a 28 per cent slide in net income for the three months to end of June, standing at $8.649 billion. The lender built $428 million of net credit reserves in the quarter, versus a net release of $3.0 billion in the same period a year ago. The change hit the headline figure.
The private banking, consumer banking and wealth arm logged a 33 per cent year-on-year rise in pre-tax earnings, reaching $238 million, while net earnings rose 37 per cent to $201 million. Net revenues at this business division rose 21 per cent to $2.104 billion, while the provision for credit losses swung into a net release of $254 million in the latest quarter, a change of 323 per cent over the past 12 months.
Assets under supervision across the whole of Goldman Sachs fell by $76 billion in the quarter, with consumer and wealth management AuS falling by $13 billion, and asset management AuS falling by $63 billion. In total, consumer and wealth management AuS stood at $738 billion at end-June; asset management AuS was $1.656 trillion
Pre-tax income fell to $3.319 billion in the second quarter of 2022 from $4.566 billion a year ago, as net revenues fell and non-compensation costs rose. Net revenues fell to $13.132 billion from $14.759 billion; non-compensation expenses rose to $4.162 billion from $3.697 billion, it said in a statement.
Within the wealth management business, this division delivered a pre-tax margin of 26.5 per cent or 28.2 per cent when integration costs are taken out. Net revenues were $5.7 billion, negatively impacted by mark-to-market losses on investments associated with certain employee deferred compensation plans. The business added net new assets of $53 billion in the quarter and $195 billion in the first half of 2022. The quarter also saw continued growth in bank lending and $29 billion of fee-based flows.
Wealth management pre-tax income at BNY Mellon stood at $296 million in the three months to June 30, down a touch from $299 million a year earlier. Market and wealth services, including the Pershing business that provides custody and other offerings for wealth managers and banks, stood at $1.314 billion in Q2 2022, rising from $1.192 billion a year earlier. Investment services fees at Pershing rose to $479 million from $439 million over the year, a rise of 9 per cent
Net income at Chicago-based Northern Trust stood at $406 million in the fourth quarter of 2021, almost doubling from $240 million a year earlier, while revenues rose to $1.68 billion, up 9 per cent. Wealth management assets under management stood at $416 billion, rising 20 per cent at the end of 2021 from $347.8 billion a year earlier. As far as wealth assets under custody/administration were concerned, the figure rose 21 per cent to $1.065 trillion at end-December 2021. Total wealth management trust, investment and other servicing fees rose to $485.9 billion, up 13 per cent. Within Northern Trust’s Global Family Office segment, such fees dipped 1 per cent year-on-year in the quarter to $73 billion. Fees in the family office segment fell sequentially, primarily due to higher money market mutual fund fee waivers.
The world’s largest fund management house said its total assets under management could not withstand the asset-eroding impact of falling markets. In its results for the three months to end-June, it reported total assets under management of $8.487 trillion, a fall of 11 per cent on a year before. Total net flows to the business held up, however, and totaled $89.573 billion in the quarter.
On an adjusted basis, net income fell 30 per cent year-on-year to $1.122 billion; diluted earnings per share were $7.36 per share, down 30 per cent. Operating income fell to $1.727 billion, down by 14 per cent. Revenues fell by 6 per cent.
It said the global wealth management arm logged a pre-tax profit in the second quarter of 2022 of $1.157 billion, down from $1.294 billion a year ago and down from $1.31 billion in the first quarter of this year. Total revenues in the wealth business declined 2 per cent to $4.667 billion; expenses stood at $3.523 billion, widening from $3.479 billion.
Net interest income increased by 24 per cent, mainly reflecting higher deposit revenues, which were driven by both higher deposit margins, as a result of rising interest rates, and increased deposit volumes. Recurring net fee income fell by 6 per cent, primarily driven by negative market performance and foreign currency effects, partly offset by net new fee-generating assets over the past 12 months.
The bank reported a net loss, attributable to shareholders, of SFr1.593 billion, contrasting with net income of SFr253 million a year earlier. At the investment banking arm in particular, Credit Suisse said that on an adjusted basis, this division posted a “significant” pre-tax loss of $860 million, against pre-tax income of $663 million in 2Q21, “reflecting extremely challenging market conditions, particularly in capital markets.” (The IB figures were given in US dollars rather than Swiss francs.)
On an adjusted basis, its wealth management pre-tax income fell to SFr114 million, falling from SFr432 million, a slide of 74 per cent on a year ago due to reduced client activity, lower volumes impacting revenues and higher costs.
Adjusted pre-tax income was hit by certain asset impairments and non-operational charges, including SFr17 million relating to certain third-party assets, mark-to-market losses in Asia-Pacific financing of SFr21 million, SFr24 million relating to the supply chain finance fund fee waiver programme, and other costs. WM net revenues fell 34 per cent to SFr1.3 billion.
The WM business sustained net asset outflows of SFr1.4 billion in
Q2, mainly driven by outflows from EMEA and Switzerland,
including client deleveraging, partially offset by inflows from
Asia-Pacific and the Americas. Total assets under management
stood at SFr662 billion, down from SFr769 billion, mainly caused
by falling markets.