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

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 should be viewed differently from wealth management results embedded within a larger group. These results may be subsequently revised. 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. Noninterest 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.