Financial Results

Summary Of Major Banks', Wealth Managers' Financial Results – Q4, Full-Year 2023

Editorial Staff 14 March 2024

Summary Of Major Banks', Wealth Managers' Financial Results – Q4, Full-Year 2023

Here is a recap of the figures from major banking groups for the fourth quarter of 2023 and for the whole of last year.

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
Net income in its asset and wealth management arm – including its private bank – rose 7 per cent year-on-year to $1.217 billion. Net revenue in the AWM business rose 11 per cent to $5.095 billion.

Last year, JP Morgan bought crisis-hit First Republic – one of several banks, such as Silicon Valley Bank that were hit by the impact of rising interest rates, among other factors. When the First Republic acquisition is taken out, net revenue rose 2 per cent on a year ago.

Revenue rose on the back of higher management fees resulting from strong net inflows and higher average market levels, although lower net interest income offset some of that impact. On the cost side of the equation, noninterest rose 12 per cent, or 11 per cent excluding the First Republic deal, driven by higher compensation, growth in private banker advisor teams, and the effect of closing the JP Morgan Asset Management China acquisition. Total assets under management stood at $3.4 trillion; total client assets were $5 trillion at the end of December 2023, each rising 24 per cent.

Bank of America
The global wealth and investment management arm reported net income of $1.033 billion for the third quarter, slipping from $1.19 billion a year ago but up from $978 million in Q2 2023. Total revenue – $5.321 billion – fell from $5.429 billion a year earlier. This division of Bank of America said it made a $6 million provision for credit losses in Q3, against a $37 million net release a year before. 

Total asset under management flows stood at $14 billion in the latest quarter. Client balances were $3.6 trillion, up 9 per cent as markets and inflows increased. 

Within the private banking segment, BoA said client balances stood at $573 billion, and AuM was $340 billion. During the quarter, net new client relationships rose 8 per cent, amounting to 600 net new relationships. On the Merrill Wealth Management side, client balances were $3 billion and AuM was $1.2 trillion.

Citigroup 
At the private banking side, Citigroup said private banking revenues, net of interest costs, fell 10 per cent to $542 million in Q4 2023. Throughout the whole wealth arm (private bank, Wealth at Work, and Citigold), the figure fell 3 per cent to $1.647 billion. Private banking revenues fell as a result of lower deposit spreads and weaker loan and deposit volumes. This was partly offset by higher investment revenue.

“Wealth revenues were down in 2023 and we fully recognize that this business isn’t where it needs to be,” Jane Fraser, CEO, said in the bank’s statement. Net income in the wealth business shrank by 97 per cent to $5 million.

Morgan Stanley 
The firm delivered a rise in full-year and fourth-quarter 2023 net revenues for its wealth management business, while fee-based asset flows rose. Q4 2023 net revenues in wealth management were $6.645 billion, up from $6.626 billion in the same quarter a year earlier. In 2023, net revenue rose to $26.268 billion from $24.417 billion in 2022. Fee-based client assets stood at $1.983 trillion at the end of December 2023. Fee-based asset flows were $41.6 billion in Q4, doubling from $20.4 billion a year earlier. However, full-year figures showed that these asset flows decelerated to $109.2 billion from $162.8 billion in 2022. Net new assets dipped to $47.5 billion in Q4 2023 from $51.6 billion. The wealth business had a pre-tax margin of 24.9 per cent.

BNY Mellon
The market and wealth services arm, including groups such as its Pershing business, logged pre-tax income in Q4 2023 of $632 million, up 4 per cent. Pershing’s investment services fees rose 1 per cent to $506 million. Total revenues in the division rose 7 per cent to $1.499 billion. 

Within the wealth and investment arm, total fee revenue slipped 3 per cent to $753 million. Total wealth management revenues fell 3 per cent to $268 million in Q4. The division logged a loss of $5 million before tax, against a profit of $125 million in the same quarter a year earlier. 

Northern Trust 
Earnings allocated to common shareholders fell 28 per cent year-on-year in Q4 2023 to $106.5 million. Trust, investment and other servicing fees rose 5 per cent to $1.09 billion. Total revenue was $1.563 billion, rising 2 per cent. Assets under management at 31 December were $1.434 trillion, rising 15 per cent. Total assets under custody/administration rose 13 per cent to $15.4 trillion.

Wells Fargo
The wealth and investment business logged net income for Q4 2023 of $491 million, falling 31 per cent from a year ago. Net interest income fell 19 per cent to $906 million; non-interest income rose 7 per cent year-on-year to $2.754 billion. Total revenue dipped 1 per cent to $3.66 billion. Total client assets stood at $2.084 trillion, rising 12 per cent from the end of December 2022.

BlackRock
The world’s largest asset manager said its net income in the fourth quarter of 2023 was $1.375 billion, up from $1.259 billion a year before. For the whole of 2023, net income rose to $5.5 billion from $5.178 billion in 2022. Total assets under management stood at just over $10 trillion; BlackRock logged net inflows of $95.647 billion in Q4 2023, down from $306.57 billion in 2022.

UBS
There was an underlying operating profit of $592 million for the final three months of 2023, slumping from $1.869 billion a year ago, with losses stemming from investment into SIX Group and the integration costs involved in buying Credit Suisse being among the causes. There was a pre-tax loss of $751 million in Q4 2023. The Common Equity Tier 1 ratio stood at 14.5 per cent. 

Looking ahead, the bank reiterated its desire to have a cost/income ratio of less than 70 per cent, and it is targeting cost savings of around $13 billion by the end of 2026. It also wants to achieve more than $5 trillion of invested assets in global wealth management by 2028 with about $100 billion of net new assets per year by 2025, building to around $200 billion per year by 2028. UBS said it has taken in net new assets of $77 billion in its global wealth management arm.

HSBC
Wealth and personal banking accounted for $11.544 billion in pre-tax profit for 2023, making up 38 per cent of the total result for the bank – up from 33.1 per cent a year ago. The wealth and personal banking arm, which includes HSBC’s private bank, came second in terms of its share of the result behind the commercial banking division (43.8 per cent); and ahead of global banking and markets (28.3 per cent). There was a small loss at the corporate centre side of the lender.

For HSBC overall, pre-tax profit in 2023 rose by $13.3 billion to $30.3 billion, primarily reflecting revenue growth. This included a favourable year-on-year impact of $2.5 billion stemming from HSBC’s sale of retail banking operations in France, and a $1.6 billion provisional gain recognised on the acquisition of Silicon Valley Bank UK Limited last year. 

Barclays
The lender now has five operating divisions: Barclays UK; Barclays UK Corporate Bank; Barclays Private Bank and Wealth Management; Barclays Investment Bank; and Barclays US Consumer Bank.

For almost a decade, the UK bank hasn’t disclosed the financial results – such as its assets under management – at the wealth and investment division. In its statement today, however, Barclays said its segmental reporting will “reflect these five operating divisions, in addition to head office, from the first quarter of 2024.”

It logged a pre-tax profit of £6.557 billion in 2023, falling from £7.012 billion in 2022; attributable profit was £4.274 billion, down 15 per cent on a year before. Total income rose 2 per cent to £25.378 billion; total operating costs rose to £16.714 billion, rising 12 per cent year-on-year; total operating expenses rose to £16.931 billion from £16.73 billion. The bank’s cost/income ratio held steady at 67 per cent. 

EFG International
It reported a rise in net profit of SFr303.2 million, up from SFr202.4 million a year ago. Operating income rose to SFr1.43 billion from SFr1.27 billion. Operating expenses rose to SFr1.057 billion from SFr975 million. The widening in profit, among other factors, narrowed the cost/income ratio to 73 per cent from 76 per cent a year earlier. The number of EFG full-time staff rose to 3,025 from 2,828.

Net new assets at the end of 2023 totalled SFr6.2 billion, corresponding to a net new asset growth rate of 4.4 per cent, which is within EFG’s target range of 4 to 6 per cent. EFG said client relationship officers who joined the firm last year “contributed significantly” to total net new assets.

Deutsche Bank
It reported private banking net revenues of € 9.6 billion for 2023, rising 5 per cent on a year earlier, and up 10 per cent on an adjusted basis.

Revenues in the German private bank entity rose by 14 per cent to €6.1 billion, while revenues in the international private bank fell 8 per cent, but were up 3 per cent excluding specific items. Private bank assets under management rose €40 billion last year reaching €559 billion, largely driven by net inflows of €29 billion.

BNP Paribas
Pre-tax income at the wealth and asset management arm stood at €765 million in 2023, sliding 35.8 per cent from a year earlier when results were boosted by a wealth management sale and joint venture.

Wealth and asset management revenues in 2023 dipped 7.8 per cent at BNP Paribas from the level seen in 2022, but rose 3.8 per cent when real estate and principal investments business contributions are removed. Wealth management revenues rose 6 per cent and asset management revenues gained by 1.7 per cent, the group said. Operating costs fell 0.1 per cent year-on-year, at €2.757 billion.

Julius Baer
The Swiss bank announced a hit to its full-year 2023 financial results from credit losses of SFr606 million. The losses stemmed from loans to a European conglomerate. Chief executive, Philipp Rickenbacher, left by mutual agreement with the board. Nic Dreckmann, deputy CEO and chief operating officer, became interim CEO. Adjusted net profit (excluding M&A-related costs) was SFr472 million, sliding 55 per cent. 

Union Bancaire Privée
There was a 6.4 per cent year-on-year rise in its 2023 net profit, reaching SFr223.8 million, producing a cost/income ratio of 67.9 per cent.

Total income stood at SFr1.227 billion, up 1.1 per cent on a year earlier, while costs held steady. The slowdown in net fees and commissions income, due to reduced brokerage activity among private clients and the decline in profit on trading operations including foreign exchange, was compensated by robust net interest income, which rose by 25.3 per cent, as interest rates rose. Assets under management remained stable in Swiss francs, at SFr140.0 billion at the end of 2022.

Mediobanca
The Milan-headquartered group said net profit rose 34 per cent year-on-year to €351 million; revenues rose 14 per cent to €863 million. The Common Equity Tier 1 ratio was 15.5 per cent. Wealth management revenues rose 15 per cent, fees rose 12 per cent and net profit was up 31 per cent.

Societe Generale
Private banking posted record level of assets under management of €143 billion in Q4 23. In 2023, net new money rose by an average of 4 per cent.

Net banking income for the quarter stood at €355 million, up 1.4 per cent on a year ago.

RBC
Net income in its wealth management business dropped to C$606 million in the three months to 31 January. A rise in noninterest expenses and a dip in net interest income – in US dollars – affected the bottom-line result for the wealth arm.

Within the wealth segments, Canadian revenue rose to C$1.77 billion from C$1.111 billion; US wealth management (including City National), rose to C$2.158 billion from $2.128 billion; and international wealth management revenue rose to C$317 million from $288 million. Total assets under management stood at C$1.41 trillion at the end of January this year.

Standard Chartered
Its full-year 2023 profit, attributable to shareholders and on a reported basis, rose 18 per cent year-on-year to $3.017 billion. Operating income rose 10 per cent to $18.02 billion; operating expenses rose to $11.55 billion, up 6 per cent, and credit impairment fell to $508 million, down by 39 per cent from 2022’s level. Goodwill and other impairment, however, rose to $1.008 billion, rising 130 per cent. At the end of December 2023, the bank’s Common Equity Tier 1 ratio was 14.1 per cent, little changed from a year ago. It had a liquidity coverage ratio of 145 per cent.

Lloyds Banking Group
It reported statutory pre-tax profit of £7.503 billion for 2023, surging by 57 per cent on a year earlier, buoyed by rising income and net interest income and a sharp fall in underlying impairment charges over the period. 

Total costs rose to £9.815 billion in 2023, up from £8.927 billion a year before. Underlying net interest income rose 5 per cent year-on-year to £13.765 billion, and total net income rose 3 per cent to £17.932 billion.

NatWest Group/Coutts
Private banking operating profit for 2023 fell to £291 million from £436 million a year earlier, with a slip in total income, and rise in impairment losses and costs affecting the bottom-line result. The private banking arm principally concerns Coutts.

Total private banking income fell to £990 million in 2023 from $1.056 billion in 2022; operating costs rose to £685 million from £622 million. It logged £14 million of impairment losses in the year, against a £2 million net release a year earlier.

Net asset under management flows fell to £1.3 billion from £2 billion; total client deposits fell to £37.7 billion from £41.2 billion, while net loans to clients fell to £18.5 from £19.2. Total assets under management and administration rose to £40.8 billion from £33.4 billion.

St James’s Place
The UK-listed wealth manager logged an IFRS loss after tax of £9.9 million resulting from a £426 million provision for potential client refunds. It slashed its dividend. It made a pre-tax underlying cash result of £483.0 million, down a touch from £485.5 million a year before, reflecting growth in average funds under management and management of controllable costs. SJP received a significant increase in the number of client complaints late in 2023 – clients queried whether they had received a sufficient level of service.

LLB Group 
The Liechtenstein-headquartered private bank said group net profit for 2023 rose 10.2 per cent year-on-year to SFr164.7 million. Operating income rose 7.7 per cent to SFr541.8 million; operating expenses rose 6.1 per cent to SFr348.4 million. Net new money inflow rose to SFr954 million from SFr762 million in 2022.

Lombard Odier
Assets under management held steady at SFr193 billion at the end of December 2023 versus SFr192 billion at end-2022. 

Operating income was SFr1.402 billion at the end of last year, rising from SFr1.38 billion a year before. Consolidated net profit was SFr221 million, slipping from SFr243 million in 2022. The Common Equity Tier 1 ratio was 32 per cent, among the highest in the world.

Commerzbank
The bank announced a 50 per cent surge in net profit for 2023, standing at €2.2 billion. The net profit figure is the best one for 15 years. The lender provides services including private banking. Commerzbank said its private and small-business customer (PSBC) segment in Germany delivered revenues of €4.139 billion, down from €4.318 billion a year before, affected by some one-off effects. When these effects are excluded, revenues were stable.

Pictet 
Net profits fell 25 per cent in 2023 on a year earlier, after the firm paid out $123 million to the US Department of Justice. The consolidated net profit stood at SFr577 million. Without this one-off payment, Pictet said net profit would have only been 9 per cent lower than 2022.

Operating income was also down by 1 per cent in 2023 on a year earlier, reaching SFr3.162 billion. Assets under management or custody stood at SFr633 billion in 2023, 4 per cent higher than 2022, whilst net new money amounted to SFr16 billion in 2023.

Vontobel
It reported a pre-tax profit of SFr262.7 billion for 2023, slipping 2 per cent from a year before, while logging SFr1.305 billion in operating income, up 2 per cent. Operating income was driven by stronger revenues in wealth management. Its cost/income ratio was at 79.5 per cent, up 1.1 percentage points, due to additional investment in the wealth arm. The firm’s Common Equity Tier 1 ratio was at 18.7 per cent, up 2.0 percentage points. 

Operating income in wealth management rose by 16 per cent to SFr746.9 million in 2023. Asset management contributed SFr384.1 million. Digital investing posted an operating income of SFr154.3 million on slightly lower client transactional activity. The firm’s assets under management increased by 1 per cent to SFr206.8 billion.

DBS
Wealth management fees increased by 13 per cent to S$1.51 billion, reflecting strong net new money inflows, a shift from deposits into investments and bancassurance, and the contribution from Citi Taiwan (as purchased by DBS last August). 

Full-year consumer banking/wealth management income in Q4 rose by 35 per cent to S$8.96 billion from higher interest rates and growth in wealth management product sales and card fees. Wealth management income increased to a record, with assets under management growing 23 per cent to a new high of S$365 billion, underpinned by strong net new money inflows and the consolidation of Citi Taiwan. At group level, net profit rose 26 per cent on a year earlier to S$10.3 billion.

Emirates NBD
Profits rose 65 per cent to AED21.5 billion in 2023 on asset growth, a stable low-cost funding base, increased transaction volumes and substantial impaired loan recoveries. 

OCBC
Wealth management income, comprising income from insurance, private banking, premier private client, premier banking, asset management and stockbroking comprised 32 per cent of the group’s total income. 

Wealth management income for FY23 rose 26 per cent to S$4.32 billion, up from S$3.42 billion a year ago. Group wealth management assets under management rose by 2 per cent to S$263 billion, from S$258 billion in the previous year.

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