A summary of the major institutions' wealth management financial results for 2019.

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 of 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. As not all the banks reported on the same day the exchange rate comparisons to the dollar have been taken out. We hope readers find it useful to see thse figures collated into one article. To comment, email tom.burroughes@wealthbriefing.com

JP Morgan 
The bank’s asset and wealth management arm logged net income in the fourth quarter of 2019 of $785 million, rising from $604 million a year earlier, and on the back of rising net revenue at $3.7 billion, versus $3.349 billion. 

Assets under management rose by 19 per cent to stand at $2.4 trillion, buoyed by higher markets and inflows into long-term and liquidity products. At the overall group level, net income in Q4 stood at $8.52 billion, up from $7.066 billion a year earlier but falling from $9.08 billion in the third quarter

Bank of America
The global wealth and investment management arm said that client balances in the fourth quarter of 2019 rose by 16 per cent year-on-year to $3.0 trillion. Net income rose by 7 per cent in Q4, from the same period a year earlier, to $4.3 billion on a 0.4 per cent rise in revenue, at $19.5 billion. The GWIM arm of the US banking group logged a pre-tax margin of 29 per cent, a record high. Referrals to and from GWIM businesses rose by 25 per cent on the year, it said.

New client relationship growth rates came in at record levels, rising by 64 per cent in 2019 from a year before. The total number of wealth advisors, including the Merrill and private banking business lines, held steady at 19,440. 

Morgan Stanley 
Wealth management reported net revenues for the current quarter of $4.6 billion compared with $4.1 billion a year ago. Pre-tax income of $1.2 billion in the current quarter resulted in a pre-tax margin of 25.4 per cent. Net revenues rose by 11 per cent from a year ago. Within wealth management, fee-based client assets at the end of last year stood at $1.267 trillion, up from $1.046 trillion a year earlier. The wealth business delivered a pre-tax margin of 27.2 per cent.

Across the whole firm, net revenues stood at $10.9 billion for the fourth quarter ended December 31, 2019 compared with $8.5 billion a year ago. Net income applicable to Morgan Stanley was $2.2 billion, or $1.30 per diluted share compared with net income of $1.5 billion, or $0.80 per diluted share, for the same period a year ago. 

Goldman Sachs
The consumer and wealth management arm of the firm reported net revenues of $1.408 billion in the fourth quarter of 2019, an 8 per cent year-on-year rise. Across the whole of the US-listed group, it logged net revenues of $9.955 billion, rising by 23 per cent, with asset management and the global markets divisions making strong contributions.

Operating costs, at $7.298 billion in Q4, rose by 42 per cent on the year, at a time when Goldman Sachs has spent significantly. The firm explained that provision for litigation and regulatory proceedings rose. Last year Goldman Sachs bought US wealth management firm United Capital, in a move that sees the group push after a wider clientele than its more traditional higher-end UHNW base. Some cost increases were associated with the United Capital acquisition. Transaction banking and credit card services also added to costs. For the entire firm, it said that assets under supervision rose by $317 billion last year to a record of $1.86 trillion.

Wells Fargo
The wealth and investment management arm of Wells Fargo, which includes the Abbot Downing business that serves ultra-high net worth clients, sustained a drop in this segment’s net income in the fourth quarter of 2019 from the previous quarter and a year ago, with higher costs taking a toll. The parent bank's profit was hit hard by costs related to its long-running fake-account scandal and weakness in some business areas.

Net income in Q4 was $254 million, down from $689 million a year earlier, and slumping from $1.28 billion in Q3 2019. Non-interest expense increased to $685 million, or 23 per cent in Q4 from the same quarter of 2018, primarily driven by higher employee benefits expense from an increased deferred compensation plan expense (largely offset by net gains from equity securities), higher operating losses, higher equipment expense related to the strategic reassessment of technology projects, and higher regulatory, risk and technology expense, partially offset by lower core deposit and other intangibles amortization expense.

Across the wealth and investment management arm as a whole, total client assets stood at $1.9 trillion, up by 10 per cent from a year ago, primarily due to higher market valuations, partially offset by net outflows in the Correspondent Clearing business. Within wealth management specifically, client assets were $240 billion at the end of 2019, up by 7 per cent from the prior year.

BNY Mellon
Assets under custody/administration stood at $37.1 trillion at the end of December 2019, rising by 12 per cent, primarily reflecting higher market values and client inflows. Assets under management reached $1.9 trillion, up by 11 per cent, primarily reflecting higher market values and the favorable impact of a weaker US dollar.

For the business as a whole, net income stood at $1.449 billion in Q4, up from $870 million a year earlier. Fee revenue rose to $3.971 billion, up from $3.146 billion. Total revenue was $4.778 billion, up from $4.007 billion.

Northern Trust
The firm reported fourth quarter net income per diluted common share of $1.70, compared with $1.80 in the fourth quarter of 2018 and $1.69 in the third quarter of 2019. Net income was $371.1 million, compared with $409.9 million in the prior-year quarter and $384.6 million in the prior quarter. The current quarter included a $20.8 million pre-tax charge recorded in other operating income related to the decision to substantially sell all of the lease portfolio and a $6.8 million pre-tax software disposition charge recorded in non-interest expense. 

Total assets under custody/administration stood at $11.311 trillion, up by 19 per cent on a year earlier. Wealth management total assets under custody/administration stood at $738 billion, up by 16 per cent. Wealth management assets under management were $313.8 billion, rising by 13 per cent.

Charles Schwab
The firm said that its net income for the fourth quarter of 2019 was $852 million, falling by 9 per cent from $935 million for the fourth quarter of 2018. Net income for the twelve months ended December 31, 2019 was a record $3.7 billion, up by 6 per cent year-over-year.

Net revenues in Q4, 2019 were $2.606 billion, falling by 2 per cent year-on-year; for the whole of last year they were $10.721 billion, rising by 6 per cent. 

BlackRock
The US-listed firm reported total assets under management of more than $7.429 trillion as at December 31, 2019, against $5.976 trillion a year before. As well as rising market levels, the colossal figure was lifted by net inflows of $438.736 billion in 2019. Revenues in the fourth quarter of last year came in at $3.977 billion, rising by 16 per cent from the same quarter a year ago. The firm made an operating margin of 38.7 per cent, widening from 36.43 per cent a year before. Net income surged by 40 per cent year-on-year to $1.3 billion in Q4.