Wealth Management Enjoys Success as Bank of America Announces Record Revenue

Stephen Harris

22 July 2008

Global Wealth and Investment Management net revenue at Bank of America increased 21 per cent in the second quarter.

The rise was due to the addition of US Trust and LaSalle, organic loan and deposit growth and an improving interest rate environment said the bank. The increase was partially offset by support to certain cash funds of $36 million, which declined from $220 million in the first quarter of 2008.

Provision for credit losses increased to $119 million compared with a benefit of $13 million a year ago as deterioration in the home equity portfolio from housing market weakness continued, the bank said in its quarterly results statement released today.

US Trust, Bank of America Private Wealth Management net income rose 25 per cent to $152 million. Net revenue rose 43 per cent to $706 million.

But Columbia Management net income declined 48 per cent to $39 million from a year ago driven mainly by losses related to support for cash funds.

Premier Banking and Investments net income fell 43 per cent to $189 million as credit costs increased by $114 million reflecting higher home equity loan losses. Net revenue decreased 9 per cent to $865 million on lower net interest income as spread compression, driven by deposit mix and competitive deposit pricing, more than offset deposit growth.

Overall, the bank reported net income of $3.41 billion, down from a record $5.76 billion a year earlier. Diluted earnings per share decreased 44 per cent to $0.72 from $1.28 in the same period in 2007. Net revenue, however, rose to a record $20.32 billion, the highest quarterly revenue in the Charlotte-based company's history.