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Summary Of Quarterly, Interim Results For World's Major Private Banks

Tom Burroughes, Group Editor , London, 14 November 2011

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Here are the main quarterly results for major banking groups that have wealth management operations.

Here are the main quarterly results for major banking groups around the world so far in the latest results season. The results focus on the wealth management sides of banks, although not all financial institutions break out their wealth results and as a result, are not all strictly comparable. Some firms give figures for their cost/income ratios. A recent Scorpio Partnership survey has pegged the global average C/I ratio at just under 80 per cent.

Morgan Stanley

The wealth management arm of US banking group Morgan Stanley saw pre-tax income rise to $362 million in the three months to 30 September from $281 million a year ago, boosting results for the entire bank. The Global Wealth Management Group’s pre-tax margin was 11 per cent. Income after the non-controlling interest allocation to Citigroup and before taxes was $310 million, it said.

Citigroup

Net income rose 74 per cent year-over-year at Citigroup to $3.8 billion, or $1.23 per diluted share. Net income was also up by 13 per cent on a consecutive basis. (The bank gave no private banking figures.)

Goldman Sachs

Assets under management at Goldman Sachs shrank by $23 billion to $821 billion during the third quarter of 2011. It attributed the decrease to market declines of $29 billion, primarily in equity assets, which was partially offset by net inflows of $6 billion. Across the group, Goldman Sachs reported net revenues of $3.59 billion and a net loss of $393 million for the three months ended 30 September. It does not break down its results for wealth management, which is not treated as a discrete element in the firm's results.

Bank of America

Global wealth and investment management at BofA reported a net income of $347 million for the three months ended 30 September - 29 per cent more than for the same period last year.  At the same time, the bank’s wealth and investment division logged a net income of $506 million in the previous quarter this year. This means that BofA has logged a net income of almost $1.4 billion for the first nine months this year, compared with just over $1 billion for the same period last year. Assets under management fell to $617 billion from $661 billion at the end of June.

Wells Fargo

Net income at the firm’s wealth, brokerage and retirement division fell to $291 million for the three months to 30 September, from $333 million in the prior quarter. On a year-over-year basis, net income at the segment rose by $35 million. Revenue for the three months at the wealth, brokerage and retirement unit was $2.9 billion, down by 6 per cent on a consecutive basis. Wells Fargo said this was due “primarily” to losses on deferred compensation plan investments (offset in expense), as well as a fall in securities gains in the brokerage business and lower brokerage transaction revenue.

BNY Mellon

The firm reported third quarter net income applicable to common shareholders of $651 million, or $0.53 per common share, compared with $622 million, or $0.51 per common share, in the third quarter of 2010 and $735 million, or $0.59 per common share, in the second quarter of 2011. Assets under management, excluding securities lending assets, amounted to $1.2 trillion at 30 September. This represents an increase of 5 per cent from a year ago.

JP Morgan

The firm said revenue from private banking in the third quarter of this year rose 10 per cent year-on-year to $1.3 billion, while the US bank as a whole saw its net income fall slightly to $4.3 billion, down from $4.4 billion in the same three months of 2010.

Europe

BNP Paribas

Wealth and asset management pre-tax income at BNP Paribas fell to €195 million (around $266 million) in the three months to 30 September compared with €250 million in the same period a year ago, and also dropped from €290 million in the previous quarter. Revenues in this segment of the bank fell to €804 million from €825 million a year ago.

Sociéte Générale

Private banking net income - also expressed as revenue - fell 6.4 per cent year-on-year to €190 million ($261 million) in the third quarter of this year, as adverse market conditions, such as ultra-low interest rates, hit this business, the bank said as it also set out the potential impact of Greek-related debt losses. The private bank logged assets under management of €83.6 billion, a rise of 2 per cent from the end of September 2010 despite the volatility in markets over this period. At €158 million, operating expenses rose 5.3 per cent year-on-year, due mainly to increased staffing and business projects.

Commissions in the private banking, asset management and securities services arm of Société Générale saw commissions hit by “unfavourable trends in the financial markets”.

Deutsche Bank

Deutsche Bank reported a pre-tax profit of €186 million ($259 million) from its asset and wealth management arm for the third quarter – more than doubling the Q3 2010 figure of €91 million. For the third quarter of 2011, Deutsche’s asset and wealth management arm posted net revenues of €876 million, down €63 million, or 7 per cent, year-over-year. Within asset management, discretionary portfolio and fund management revenues fell by €32 million (equating to a fall of 7 per cent), while within private wealth management these revenues fell by €9 million (a drop of 8 per cent).

UBS

Pre-tax profits rose at the wealth management businesses of UBS in the third quarter, although its Americas segment fell slightly, while pre-tax profits for the Zurich-listed bank were hit - as previously expected - by the unauthorised trading loss reported in September, as well as restructuring charges and lower investment banking income.

The pre-tax profit at the wealth management arm of UBS rose to SFr888 million (around $1.0 billion) in the third quarter of 2011, compared with SFr672 million in the previous three months, while Wealth Management Americas’ pre-tax profit fell 1 per cent to SFr139 million from SFr140 million.

Credit Suisse

Credit Suisse’s private banking arm – comprising global wealth management and Swiss corporate and institutional clients – logged a pre-tax income of SFr183 million (around $207.4 million) in the third quarter, down 78 per cent from SFr836 million a year ago, affected by one-off litigation costs. The pre-tax income figures for the latest three-month period included litigation provisions of SFr295 million linked to US tax issues and SFr183 million connected to a German tax issue.

Julius Baer (interim statement to be issued today).

Asia-Pacific

DBS

Wealth management net fee and commission income at Singapore-headquartered DBS fell 19 per cent quarter-on-quarter to S$42 million (around $32.9 million); over the first nine months of 2011, net fee and commission income rose by 58 per cent to S$145 million, however. Consumer and private banking net interest income contracted to S$350 million in the third quarter of this year, down from S$338 million a year ago, while pre-tax profits rose to S$141 million from $130 million.

Oversea-China Banking Corporation, Singapore’s second-largest bank, grew fees and commission revenues by a fifth year on year during the first nine months of 2011, led by wealth management, loans and trade-related fees.  The bank said in its third quarter results that wealth management had performed strongly, with revenues from insurance, private banking, asset management, stockbroking and sales of other wealth management products, up 2 per cent to S$1 billion ($780 million) during the first nine months on the same period last year.

UK

Barclays Wealth

Barclays Wealth recorded a profit before tax of £153 million (about $246 million) for the nine months ended 30 September, up from £122 million for the same period last year.

Lloyds Banking Group

The wealth arm of Lloyds Banking Group has reported “strong new business inflows”, the UK-based firm said today, although it gave few other specific financial details about this side of its operations.

HSBC

The bank said pre-tax profits for its global private bank fell in the third quarter and in the first nine months of 2011 from their comparable periods a year ago, with revenue rises more than offset by rising Swiss franc-denominated operating costs, rising regulatory burdens, and more hires.

Pre-tax profits for the nine months to 30 September were $800 million, down from $830 million a year ago; in the three months to end-September, the figure was $248 million, down from $274 million a year before. At the end of September, the private bank had a cost-efficiency ratio of 67.4 per cent, up from 63.7 per cent a year before

Royal Bank of Scotland

The wealth arm of UK-listed Royal Bank of Scotland, which includes Coutts, the private bank, logged an operating profit, before impairments, of £75 million ($119.9 million) in the three months ending 30 September, unchanged on a year ago, but down from £77 million from the end of June.

 

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