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Bank Of America Logs Sharp Year-On-Year Increase In Net Income At GWIM Unit In Q2
Eliane Chavagnon
17 July 2013
has today reported that net income at its Global Wealth
& Investment Management division swelled by 38 per cent from the second
quarter of 2012 to $758 million as at June 30, 2013. Net income at the GWIM unit rose
$38 million from $720 million during this year’s second quarter. The US-listed bank said the pre-tax margin was a “record” 28 per cent for Q2
2013, up from 21 per cent in the year-ago quarter. Revenue at end-June 2013 was up 10 per cent from the year-ago quarter to $4.5
billion, which BoA attributed to higher asset management fees related to
higher market levels and long-term AuM flows, along with higher transactional revenue and
higher net interest income. Meanwhile, the provision for credit losses dropped $62 million from the
year-ago quarter to a $15 million benefit, BoA said, “driven by credit quality
improvement.” Higher volume-related expenses - partially offset by lower
personnel costs – drove non-interest expenses increased year-on-year 3 per cent
to $3.3 billion. Assets management fees expanded by 10 per cent over the year to
reach $1.7 billion, while assets under management stood at $743.6 million at
June 30, 2013, down slightly from $745.3 million at the end of Q1 2013, but up from $667.5
million a year ago (a yearly increase of 11 per cent). Long-term AuM flows “more than
doubled” from the year-ago quarter to $7.7 billion, BoA said. Excluding balances transferred to consumer and business banking,
client balances at the GWIM division rose 8 per cent from Q2 2012 to $2.2
trillion, “reflecting higher market levels and net inflows, driven by client
activity in long-term AuM, deposits and loans,” the bank said. For the group as a whole, Bank of America Corporation reported
that net income shot up 63 per cent from $2.5 billion in Q2 2012 to $4 billion
at June 30, 2013. Net income is up from $1.5 billion recorded at the end of the
first quarter. Revenue, net of interest expense and on a fully
taxable-equivalent basis, inched up 3 per cent to $22.9 billion from $22.2
billion a year ago. A year ago, BoA agreed to sell its non-US wealth management arm to Julius Baer, the Swiss private bank.