Net Income Dips Slightly At Bank Of America's Wealth Arm

Editorial Staff

17 January 2023

, based in Charlotte, North Carolina (pictured) said 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, it said in a statement late last week.

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 non-interest income.

Non-interest 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.

Group results
The firm said its net income for Q4 2022 stood at $7.1 billion, or $0.85 per diluted share, compared with $7.0 billion, or $0.82 per diluted share for Q4 2021. Pre-tax income rose 1 per cent to $7.9 billion due to a reserve build compared with a reserve release in the fourth quarter of 2021, it said.

The Common Equity Tier 1 (CET1) ratio – a common measure of a bank’s capital buffer – is 11.2 per cent, up by 25 basis points from the third quarter of 2022.