Here is a recap of the figures from major banking groups for the second quarter of 2023.

Below 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 should be viewed differently from wealth management results embedded within a larger group. 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 tom.burroughes@wealthbriefing.com

JP Morgan
The bank said its net income in the second quarter of 2023 rose 10 per cent year-on-year to $1.226 billion in its wealth and asset management business. The US bank kicked off the Q2 reporting season for financial institutions late last week. Results were affected by JP Morgan’s purchase of First Republic Bank at the start of May, following the latter’s financial woes. 

Net revenues in this business division stood at $4.943 billion in Q2, up from $4.306 billion, although down from $4.784 billion a year earlier. Non-interest costs rose to $3.163 billion from $2.919 billion a year before. Assets under management stood at $3.2 trillion, rising 16 per cent on a year ago.

Bank of America
Its wealth management business, including its private bank and Merrill Lynch businesses, logged net income of $1.2 billion, a fall of 2 per cent on a year ago in the fourth quarter of 2022. Pre-tax income stood at $1.6 billion, a fall of 2 per cent on a year earlier. Pre-tax, pre-provision income rose 4 per cent to $1.6 billion. BoA’s wealth business, which logged record fourth-quarter revenue of $5.4 billion, increased marginally as higher net interest income was mostly offset by the impact of lower market valuations on noninterest income. Noninterest costs, which were $3.8 billion, fell 1 per cent, driven by lower revenue-related incentives, partially offset by investments in the business, including strategic hiring and marketing.

Bank of America’s private bank reported client balances of $565 billion, and assets under management balances of $314 billion. It added about 550 net new relationships in the fourth quarter, a rise of 5 per cent on a year before. In the Merrill Lynch Management business line, client balances stood at $2.8 trillion; assets under management balances were $1.1 billion and it added about 8,500 net new households, rising 27 per cent.

Morgan Stanley
The wealth management arm brought in net new client assets of $90 billion and record net revenues of $6.7 billion in the second quarter of 2023, against $52.9 billion and $5.7 billion, respectively. The gains were due to higher net interest income and the positive impact of deferred compensation plans. The pre-tax margin was 25.2 per cent, reflecting higher compensation expenses driven by severance costs associated with an employee action, integration-related expenses and higher provisions for credit losses. Wealth management transactional revenues fell 2 per cent on a year earlier, excluding the impact of the mark-to-market gains on investments linked to certain employee DCPs versus losses in the same quarter a year ago.

Citigroup
Net income at the personal banking and wealth management (PBWM) division of Citigroup declined to $494 billion in the second quarter of 2023, down 11 per cent a year ago, while total revenues, after interest costs, rose 6 per cent to $6.395 billion. Within the private bank, which focuses on ultra-high net worth clients, revenues were $605 million, a fall of 19 per cent in the same quarter of 2022. Across all global wealth management business, revenues fell 5 per cent to $1.8 billion. 

Total operating costs in PBWM rose 5 per cent to $4.204 billion. This was driven mainly by risk and control investments. Total client assets in global wealth management stood at $764 billion, up 5 per cent.

BNY Mellon
The group reported a 22 per cent year-on-year rise in its second-quarter 2023 net income applicable to common shareholders, standing at $1.03 billion. Net interest revenue rose by 33 per cent, but fee revenue fell 2 per cent on a year ago. Total non-interest costs held steady at $3.1 billion.

Assets under custody/administration rose 9 per cent, standing at $46.9 trillion. Assets under management, however, slipped by 2 per cent to $1.9 trillion. Within the market and wealth services segment, total revenue rose 10 per cent, while pre-tax income rose 8 per cent; there was a pre-tax operating margin of 46 per cent.

Northern Trust
The group announced second-quarter net income of $331.8 million, down a touch from $334.6 million in the prior quarter and $396.2 million a year earlier. Second quarter 2023 results included the following: $38.7 million of pre-tax severance-related charges (after-tax $29.2 million), and $25.6 million pre-tax charge related to the write-off of an investment in a client capability (after-tax $19.3 million). 

Total assets under management at the Chicago-headquartered firm stood at $1.365 trillion at the end of June, up 5 per cent on a year ago. Total assets under custody rose 6 per cent to $11.284 trillion. Within its trust, investment and servicing business, fees dipped 4 per cent year-on-year to $1.096 billion in Q2 2023. Within this figure, the global family office’s trust, investment and servicing fees fell 5 per cent to $91.3 million.

Wells Fargo
The wealth and investment management arm of Wells Fargo reported a 19 per cent drop in net income for the three months to end-June, standing at $487 million. It rose 7 per cent from the end of March 2023, however. Revenue in wealth and investment management dipped 2 per cent year-on-year to $3.648 billion. Non-interest costs rose 2 per cent to $2.974 billion; some $24 million was set aside for credit losses, reversing from a net release of $7 million. Net interest income rose 10 per cent due to the impact of higher interest rates, partially offset by lower deposit balances as customers reallocated cash into higher yielding alternatives. Total client assets stood at $1.998 trillion at the end of June, a gain of 9 per cent on a year before.

Royal Bank of Canada
The bank reported net income of C$3.6 billion for the quarter ended  April 30, 2023, down 14 per cent from the prior year. Adjusted net income of C$3.8 billion fell from the prior year. Results for the quarter reflected higher provisions for credit losses, with a PCL on loans ratio of 30 bps, mainly attributable to provisions taken on performing loans in the current quarter, largely driven by unfavorable changes in credit quality and macroeconomic outlook, as compared with releases in the prior year which reflected reduced uncertainty from the Covid-19 pandemic. 

In wealth management, RBC reported net income of C$742 million, which fell 8 per cent from a year ago, mainly due to lower average fee-based client assets driven by unfavorable market conditions and gains on the sale of certain non-core affiliates in the same quarter last year.

Rest of the world:
UBS
The Swiss group posted a net profit of $29 billion for the second quarter of 2023 since it closed the acquisition of the Credit Suisse Group in June. UBS said that the result primarily reflected the negative goodwill on the Credit Suisse acquisition. Underlying profit before tax, which excludes negative goodwill, integration-related expenses and acquisition costs, came in at $1.1 billion. Negative goodwill represents the fair value of assets acquired in a merger over and above the purchase price. UBS paid a discounted $3.4 billion to acquire Credit Suisse in March.  

UBS Global Wealth Management also recorded its highest second-quarter net new money in over a decade at $16 billion.

Deutsche Bank 
The private banking arm reported an 11 per cent year-on-year rise in net revenues in the second quarter of 2023, standing at €2.4 billion. Growth was caused by higher revenues from deposit products, higher net interest margins but partly offset by lower fee income and lower loan revenues in an environment of higher interest rates. Revenues in the German part of the private bank rose 16 per cent to €1.5 billion in Q2 2023; revenues in the international private bank rose 4 per cent to €865 million, or 6 per cent if adjusted for the non-recurrence of revenues of about €15 million following the sale of Deutsche Bank Financial Advisors in Italy in the fourth quarter of 2022. 

Assets under management in the private bank rose by €11 billion to €541 billion during the quarter, driven largely by net inflows of €7 billion which included inflows into investment products of €4 billion and deposits of €3 billion.

BNP Paribas
BNP Paribas Wealth Management reported strong results in 2023, with a 6.6 per cent growth in revenue in the second quarter, compared with the same period in 2022, and an 8.6 per cent rise in the first six months of the year.

Societe Generale
Private banking assets under management totaled €143 billion at Q2 2023, excluding activities formerly managed by Lyxor. Private banking’s net asset inflows amounted to €2.9 billion at Q2 2023. Net banking income stood at €381 million during the quarter, an historical high, representing a 6.7 per cent increase vs. Q2 2022. Net banking income for the first half of the year totaled €747 million, up 4.5 per cent on a year earlier.

For the whole SocGen group, reported group net income for H1 2023 was €2.667 billion, falling from €3.019 billion a year earlier. 

HSBC
The firm’s wealth and personal banking arm, which includes its private bank, said its pre-tax profit in the half-year to 30 June surged 39.7 per cent year-on-year to $8.592 billion. Across the entire firm, pre-tax profit doubled (100 per cent) to $21.657 billion, benefiting from forces such as higher interest rates.

Net operating income at the wealth and personal banking arm stood at $15.698 billion in H1 2023. Total operating costs were $7.141 billion. At the end of June, invested assets at the WPB business stood at $1.097 trillion, rising from $1.014 trillion a year before.

Barclays
The UK lender anounced a second-quarter pre-tax profit of £1.964 billion, rising 31 per cent on a year earlier, while profit attributable to shareholders stood at £1.328 billion, rising 24 per cent. Total income dipped 6 per cent year-on-year to £6.284 billion; operating costs also fell 6 per cent to £3.919 billion, while litigation and conduct-related costs fell sharply in the reporting period, down to £33 million from £1.334 billion. Group operating expenses fell to £3.952 billion from £5.016 billion.

At the end of June, the lender said it had a Common Equity Tier 1 ratio – its capital buffer – of 13.8 per cent. The bank does not break out its wealth management and private banking results.

Lloyds Banking Group
The lender reported a 23 per cent year-on-year rise in pre-tax profit for the six months to end-June 2023, standing at £3.87 billion. After tax, profit rose 17 per cent, to £2.864 billion. On an underlying basis before impairments, profit in the H1 period rose 16 per cent to £4.703 billion, according to a statement from the bank. Total costs dropped 5 per cent to £4.483 billion in the six-month period. 

Underlying net interest income rose 14 per cent to £7 billion; other underlying income rose 7 per cent to £2.538 billion. Lloyds said that at the end of June, it had a Common Equity Tier 1 ratio – a measure of its capital buffer – of 14.2 per cent, which remains before its ongoing 12.5 per cent target.

Coutts
The private banking arm of NatWest – Coutts – that has been engulfed in the “de-banking” saga of former UKIP leader Nigel Farage – said its operating profit in the first half of 2023 jumped to £234 million from £187 million a year earlier, while its total income rose to £567 million from £461 million. 

The results announcement came a day after Peter Flavel resigned with immediate effect as Coutts chief executive, and a day before, NatWest’s CEO, Dame Alison Rose, had resigned. They left in the wake of revelations that a Coutts account had been removed from Farage because the bank had said his opinions did “not align with our values.” The episode has led to calls from Prime Minister Rishi Sunak for stronger protections of free speech in the banking world. It has also hit Coutts’ reputation. 

NatWest said private banking net new money slowed to £1 billion in H1 2023 from £1.4 billion a year earlier. In the second quarter of this year, net new money was £400 million, falling from £600 million. Private banking delivered a return on equity of 24.7 per cent, characterized by NatWest as “strong.”

Lombard Odier
Assets under management rose 4 per cent in the six months to the end of June, reaching SFr198 billion, helped by private client and asset management business inflows. At the end of June, total client assets stood at SFr308 billion. 

In the first half 2023, operating income rose 2 per cent year-on-year to SFr704 million; consolidated net profit was unchanged at SFr135 million. Negative currency effects were offset by the inflows of net new money and the positive effect of rising markets.

At June 30, Lombard Odier’s Common Equity Tier 1 ratio – a standard measure of capital buffer at banks – was 30 per cent, which the bank said was one of the “highest in the industry.”

Pictet 
The Swiss private bank reported first-half 2023 operating income of SFr1.621 billion, rising 3 per cent on a year earlier. Total operating costs before tax were SFr1.146 billion, rising 3 per cent. Net profit was SFr366 million and assets under management or custody stood at SFr638 billion on June 30, rising from SFr612 billion at the end of 2022. Net new money amounted to more than SFr15 billion. The net "operating result" was SFr475 million, a rise of 2 per cent. 

The group's total capital ratio was 29.3 per cent, above the minimum of 12 per cent required by Swiss regulator FINMA – based on SFr3.56 billion of total regulatory capital.

REYL Intesa Sanpaolo
Operating income in the first six months of 2023 rose 21 per cent year-on-year to SFr65.1 million, with an operating profit at SFr11.1 million, swinging back from a loss of SFr3.3 million a year ago. The group said that as part of a “refocusing” of its wealth business to identify target markets more effectively, assets under administration fell 9 per cent to SFr16.4 billion, although return on assets improved to 75 basis points. Operating costs fell 5 per cent year-on-year from the restructuring program implemented following the merger between REYL & Cie and Intesa Sanpaolo Private Bank (Suisse) Morval in 2022. 

The cost/income ratio improved, standing at 78 per cent from 100 per cent. The bank had a Tier 1 capital ratio of 17.7 per cent, falling from 18.1 per cent a year earlier.