Bank Of America's Wealth Arm Logs Slight Net Income Drop

Editorial Staff

18 October 2022

Bank of America yesterday said that its global wealth management business, which includes its private banking arm, logged a 3 per cent year-on-year fall in net income for the third quarter of 2022, coming in at $1.2 billion. Pre-tax income fell also by 3 per cent, to $1.6 billion.

The result was delivered on the back of a 2 per cent rise in revenues, reaching $5.4 billion. Non-interest costs rose 2 per cent, to $3.8 billion, at this side of the bank, it said in a statement.

Provision for credit losses in the wealth business was $37 million, up a touch from the end of June.

Total client balances fell by 12 per cent, reaching $3.2 trillion, as markets fell, although client inflows partly offset the market impact.

Within the private banking side of BoA, client balances were $538 billion, the group said. The private bank added about 550 new relationships in the third quarter of this year, rising 101 per cent. As the bank has done before, it spelled out the level of digital engagement of its clients. In the private banking side, 86 per cent of clients are digitally active across the enterprise, it said. Digital wallet transactions have risen 63 per cent, for example.

Group results
Across the Bank of America group as a whole, the lender said pre-tax income fell 7 per cent to $8.3 billion in Q3, reflecting a reserve build compared with a release of such reserves in the same period a year before. Pre-tax, pre-provision income rose 10 per cent to $9.2 billion.

BoA said it had a Common Equity Tier 1 ratio of 11.0 per cent, widening by 48 basis points from the second quarter of this year. The ratio is a standard international benchmark of a bank’s financial buffer.

“We continued to see strong organic client growth across our businesses, with increased client activity helping to drive revenue up by 8 per cent,” Brian Moynihan, chief executive, said.