Financial Results

Summary Of Full-Year, Q4 2021 Financial Results For Banks, Wealth Managers

Editorial Staff, 23 May 2022

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A summary of the major banks' financial results for the fourth quarter of 2021 and the whole of that year. (Results can be subsequently revised.)

Here 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 such as Julius Baer should be viewed differently from wealth management results embedded within a larger institution. 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

Citigroup
The bank reported net income for the fourth quarter 2021 of $3.2 billion, or $1.46 per diluted share, on revenues of $17.0 billion. This compared with net income of $4.3 billion, or $1.92 per diluted share, on revenues of $16.8 billion for the fourth quarter 2020. Private bank revenues of $963 million increased by 6 per cent on a year ago (excluding gain/(loss) on loan hedges), driven by higher fees and lending volumes, reflecting strong momentum with new client acquisitions, partially offset by lower deposit spreads. At the end of 2021 the bank said its Common Equity Tier 1 capital ratio was 12.2 per cent.

JP Morgan
The bank’s assets and wealth management business logged net income of $1.1 5 billion in the quarter, rising from $786 million a year earlier, or a gain of 46 per cent. Net revenue rose $4.5 billion, up 16 per cent, predominantly driven by higher management fees and growth in deposits and loans, partially offset by deposit margin compression. Noninterest costs were $3.0 billion, up 9 per cent, driven by higher performance-related compensation and distribution fees, higher structural expense, as well as higher investments in the business, partially offset by lower legal costs compared with the prior year.

Assets under management were $3.1 trillion, up 15 per cent, driven by cumulative net inflows, as well as higher market levels. The bank had a Basel III common equity Tier 1 capital ratio on a standardized basis of 13 per cent.

Goldman Sachs
The firm reported fourth-quarter 2021 net earnings of $3.94 billion and $21.84 billion for the entire year, compared with $4.506 billion a year before, and $9.459 billion for the whole of 2020.

Within its consumer and wealth management arm, US-listed Goldman Sachs said it had $751 billion of assets under management at December 31, 2021, rising from $694 billion at end-September 2021 and $615 billion a year earlier. Across the entire Goldman Sachs business, AuS was $2.47 trillion, up from $2.145 trillion a year before.

Consumer and wealth management at Goldman Sachs generated record net revenues of $7.47 billion, reflecting record net revenues in both wealth management and consumer banking. Net revenues in this area were $1.97 billion for the fourth quarter, 19 per cent higher than the fourth quarter of 2020 and 3 per cent lower than the third quarter of 2021. Net revenues in wealth management were $1.59 billion, 22 per cent higher than Q4 of 2020, due to significantly higher management and other fees, primarily reflecting the impact of higher average assets under supervision, and higher net revenues in private banking and lending, primarily reflecting higher loan balances.

Morgan Stanley
Wealth management at the firm reported net revenues in the fourth quarter of 2021 of $6.3 billion, up from $5.7 billion a year ago. Pre-tax income in Q4 stood at $1.4 billion, a margin of 22.6 per cent. The wealth business added net new assets of $438 billion and total client assets under management were $4.9 trillion, up 23 per cent from a year ago, it said yesterday. Fee-based client assets stood at $1.839 trillion at the end of December 2021, up from $1.47 trillion a year ago.

For the Morgan Stanley group as a whole, it reported net revenues of $14.5 billion for the fourth quarter ended December 31 compared with $13.6 billion a year ago. Net income applicable to shareholders was $3.7 billion, or $2.01 per diluted share, compared with $3.4 billion, or $1.81 per diluted share.

BNY Mellon 
The firm reported net income applicable to common shareholders of $822 million for the fourth quarter of 2021, rising 17 per cent year-on-year. Assets under management stood at $2.4 trillion at the end of December 2021, rising 10 per cent year-on-year as a result of higher inflows and market levels, the US-listed group said in a statement. Assets under custody and administration rose 14 per cent to hit $46.7 trillion. 

Wealth management revenues stood at $311 million, rising 13 per cent year-on-year. Wealth management total assets rose 12 per cent to $321 billion from a year before.

Northern Trust
Net income stood at $406 million in the fourth quarter of 2021, almost doubling from $240 million a year earlier, while revenues rose to $1.68 billion, up 9 per cent. The group, which provides custody, support and other services including wealth management, said that wealth management assets under management stood at $416 billion, rising 20 per cent at the end of 2021 from $347.8 billion a year earlier. 

As far as wealth assets under custody/administration were concerned, the figure rose 21 per cent to $1.065 trillion at end-December 2021. Total wealth management trust, investment and other servicing fees rose to $485.9 billion, up 13 per cent. Within Northern Trust’s Global Family Office segment, such fees dipped 1 per cent year-on-year in the quarter to $73 billion. Fees in in the family office segment fell sequentially primarily due to higher money market mutual fund fee waivers.

BlackRock
The world’s biggest asset manager said it logged $540 billion of full year total net inflows, reflecting a 6 per cent organic asset growth and 11 per cent organic base fee growth, led by record flows in ETFs and active strategies. Total AuM was $10.01 trillion at the end of 2021, versus $8.676 trillion in 2020. Net income was $1.643 trillion in Q4, 2021, up from $1.548 trillion in the fourth quarter of 2020.

UBS
The group reported a full-year pre-tax profit of $9.484 billion, rising 16 per cent on a year ago, taking account of a net credit loss release of $148 million against net credit loss costs in the pandemic-hit year of 2020. Its cost-income ratio widened 0.4 percentage points to 73.6 per cent. Operating income increased by 10 per cent on a year ago, with operating costs rising 8 per cent, partly driven by the bank setting aside an added $740 million in litigation provisions to handle a French cross-border dispute. Had that litigation amount been stripped out, operating costs would have risen 4 per cent and pre-tax profit risen 25 per cent. Net profit attributable to shareholders stood at $7.457 billion, up by 14 per cent on the level for 2020.

Within the global wealth management arm, pre-tax profit stood at $563 million in the final three months of 2021, down from $864 million a year ago, including provisions of $657 million for the French cross-border legal issues. If this was excluded, GWM would have delivered double-digit growth in all regions. Operating income in the division rose 13 per cent in Q4 2021 from a year ago. Recurring net fee income rose 17 per cent, mainly as a result of higher values for fee-generating assets. Invested assets increased by 3 per cent sequentially to $3.303 trillion. Fee-generating assets rose 5 per cent sequentially to $1.482 trillion.

Credit Suisse
It reported an attributable net loss of SFr2.007 billion for the fourth quarter of last year, and SFr1.572 billion for all of 2021, hit by litigation costs stemming from sagas such as exposure to the failed Archegos hedge fund/family office in New York. 

Net revenues in its wealth management arm rose 2 per cent year-on-year to SFr3.2 billion in Q4, and rose 3 per cent to SFr13.961 billion for the whole of 2021. There was a small net release of SFr20 million in Q4 2021 against a provision for credit loss of SFr138 million a year earlier, reflecting lower expected hits from the pandemic.

Julius Baer
Julius Baer said total assets under management rose to SFr482 billion at the end of 2021, rising by SFr48 billion, or 11 per cent from a year earlier, buoyed by rising markets and net new inflows. Gains to the US dollar more than outweighed depreciation in the euro over the period. 

Net new money improved by 30 per cent to SFr20 billion, growing at a rate of 4.5 per cent over the year. All regions saw positive net inflows, with “particularly strong” contributions from clients domiciled in Western Europe (especially the UK, Ireland, Germany, Switzerland, and Luxembourg), Asia (especially Singapore, Japan, and India), the UAE, and Brazil. Including assets under custody of SFr80 billion. Total client assets grew by 11 per cent to SFr561 billion.

Vontobel 
The Swiss firm logged a 46 per cent year-on-year pre-tax profit of SFr467 million. Profit after taxes rose by 48 per cent to SFr384 million. Operating income rose by 21 per cent to SFr1.536 billion. Wealth and asset management business accounted for 80 per cent of the record income generated in 2021. Operating income in the business with asset management clients rose by 15 per cent to SFr594 million. The strongest income driver was the global business with wealth management clients, where operating income grew by 15 per cent to SFr634 million compared with 2020’s level.

Deutsche Bank
The European group reported its highest full-year net profit since 2011, standing at €3.4 billion – a rise of more than three times from the previous year. Fourth-quarter earnings showed pre-tax profit of €82 million. Net profit for the full year rose more than four-fold to €2.5 billion. Private bank net revenues were €8.2 billion in 2021, up by 1 per cent on a year before, or up 2 per cent if adjusted for forgone revenues resulting from the German Federal Court of Justice (BGH) April 2021 ruling on customer consent for pricing changes on current accounts and the non-recurrence of a negative prior-year impact from the sale of Postbank Systems AG.

The private bank generated business volume growth of €45 billion in 2021, 50 per cent above its target threshold, including €23 billion in net inflows into investment products and €15 billion in net new client loans. In the fourth quarter, private bank net revenues were €2.0 billion, up 4 per cent. Revenues in Private Bank Germany rose 8 per cent, or were down 2 per cent if adjusted for the prior year impact of Postbank Systems and the BGH ruling. Revenues in the international private bank were down 2 per cent, or up 6 per cent if adjusted for the non-recurrence of prior-year revenues relating to Sal Oppenheim workout activities. (Sal Oppenheim is a German wealth manager which was integrated into the Deutsche business in 2017.)

HSBC
The group said that its wealth and personal banking arm, which includes private banking, logged adjusted pre-tax profit of $7.048 billion in 2021, rising sharply from $4.13 billion a year ago as global economic conditions improved. Adjusted total pre-tax profit stood at $21.92 billion for the whole HSBC group, up from $12.271 billion.

In 2021, the wealth and personal banking side booked net operating costs of $15.384 billion, against $15.443 billion a year earlier in 2020. This division of the bank provided for $3.005 billion in expected credit losses and impairments, but swung into a net release of $288 million last year, helped by the Covid-19 crisis easing.

The group said its WPB arm logged $1.67 trillion of reported wealth balances last year, up from $1.59 billion in 2020, helped by a total of $64 billion net new invested assets in 2021, up from $53 billion. Within wealth and personal banking asset management, funds under management rose to $630 billion from $602 billion. In the Asia WPB business specifically, wealth revenue rose to $5.8 billion from $5.2 billion.

Barclays
Barclays reported profit attributable to shareholders of £6.375 billion for 2021, surging from £1.526 billion a year before, with results benefiting from a reversal of the large credit impairments in 2020 and rising income. The UK-listed bank, which does not typically break out separate financial results for its wealth and investment business, said pre-tax profit came in at £8.414 billion against £3.065 billion. Total income rose 1 per cent year-on-year to £21.94 billion. 

However, Barclays did publish a line about its private bank, noting that total private bank total income for 2021 was £781 million, up from £707 million the previous year. Earlier in February, Credit Suisse signed a pact with Barclays to serve high net worth clients in Africa after the Zurich-listed lender decided to shut services in a variety of markets. It is also stepping up its presence in the Spanish wealth management market, it celebrated its 100th anniversary of business in Monaco, and has been reviving its private banking business in Asia-Pacific.

Lloyds Banking Group
The insurance and wealth arm of the UK group posted an underlying profit of £427 million in 2021, up from £338 million. Net income was £1.502 billion, up from £1.25 billion.

Coutts
Coutts, the private banking arm of UK-listed NatWest, reported a 68 per cent year-on-year surge in operating profit to £350 million for 2021, and an 11 per cent rise in assets under management and administration to £35.6 billion from the end of 2020.

The organization logged £3 billion of net new money, double the amount from a year before. Of all sales, digital channels now account for 26 per cent of net new money. More than 2,000 clients were taken on board in 2021, a rise of 29 per cent from a year before.

BNP Paribas
The French group said that pre-tax income for its wealth and asset management business stood at €951 million in 2021, up from €583 million a year ago. Revenues rose to €3.422 billion last year, up from €2.982 billion; operating costs in this business division were €2.628 billion, up from €2.51 billion a year earlier. In the fourth quarter of 2021, wealth and asset management pre-tax income was €237 million, up from €233 million in the same three months of 2020.

Societe Generale
Private banking’s assets under management totaled €78 billion at end-December 2021. Net inflow was buoyant at €4.1 billion in 2021, an increase of 68 per cent vs 2020. In 2021, private banking posted an increase in revenues of +3.1 per cent vs 2020, to €699 million when restated for an exceptional impact of €+29 million related to an insurance pay-out received in 2020, revenues are up +7.7 per cent). The business benefited from strong commercial activity in all regions. Net inflow amounted to € +7.7 billion in 2021. Assets under management totaled €130 billion. They rose +12 per cent in 2021.

ABN AMRO 
The bank reported a profit of €552 million in the final three months of last year, surging from €54 million a year ago, while full-year 2021 profit rose to €1.234 billion, recovering from a loss of €45 million. Impairment charges fell by 45 per cent in Q4 2021 from a year ago, and slumped by 46 per cent for the whole of 2021 as the Covid-19 position, among other forces, improved over the year. Operating income in Q4 rose by 27 per cent on a year earlier to €2.284 billion, while operating costs rose just 2 per cent to €1.433 billion. The cost/income ratio narrowed sharply to 62.8 per cent at the end of 2021 from 77.8 per cent a year earlier. The bank’s fully-loaded Common Equity Tier 1 ratio – a standard international measure of a bank’s capital buffer – fell slightly to 16.3 per cent from 17.7 per cent.

DBS
Wealth management and consumer banking income fell by 8 per cent in 2021 from a year before to S$5.32 billion, with the impact of lower interest rates somewhat moderated by loan and deposit growth. For DBS overall, it achieved a record net profit of S$6.80 billion in 2021, rising 44 per cent from the previous year and restoring a trend of consecutively higher earnings disrupted by the pandemic in 2020. 

Return on equity rose to 12.5 per cent from 9.1 per cent a year ago. “Strong business momentum” mitigated the full-period impact of interest rate cuts in March 2020 and “exceptional investment gains” the previous year, it said in a statement. Loan growth of 9 per cent was the highest in seven years, while fee income and Treasury Markets income rose to record levels. Fourth-quarter 2021 net profit was S$1.39 billion, a 37 per cent rise from a year ago. 

Wealth management fees increased by 19 per cent to a record S$1.79 billion from higher sales of investment products and bancassurance. Assets under management in the wealth arm stood at S$291 billion at the end of 2021, up from S$264 billion a year before.

The Common Equity Tier-1 ratio – a standard international measure of a bank’s capital buffer – was little changed from the previous quarter at 14.4 per cent, DBS said.

OCBC
The group’s wealth management income, comprising consolidated income from insurance, premier and private banking, asset management and stockbroking, rose 11 per cent to S$3.92 billion, up from S$3.54 billion last year, and contributed 37 per cent to the Group’s total income. As at December 31, 2021, Group wealth management AuM rose 7 per cent to S$258 billion from S$241 billion a year ago. Non-interest income was S$1.31 billion in 2021, up 16 per cent on a year before.

Global consumer/private banking pre-tax profit fell 7 per cent year-on-year to S$1.121 billion.

UOB
Wealth management fees grew to a record S$823 million on the back of returning investor confidence, it said. For the group as a whole, it reported total income of S$9.79 billion and net profit of S$4.07 billion for the financial year ended 31 December 2021 (FY21). 

In particular, assets under management from high affluent customers reached a new record of S$139 billion, with 57 per cent coming from overseas customers served by the group’s network of wealth management centres in Southeast Asia.

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