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Life Health > Annuities > Fixed Annuities

BISA: Bank Broker-Dealers Improve Performance

By Trevor Thomas

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NU Online News Service, May 14, 2003, 4:59 p.m. EDT – Bank investment and insurance programs had a solid first quarter, reports the Bank Insurance and Securities Association, Wayne, Pa.

Although stock prices were down, bank investment and insurance programs ended the quarter with higher profits and higher revenue.

Average annualized profits from bank broker-dealer operations increased to $1,178 per $1 million in retail deposits, from $986 for the first quarter of 2002, BISA says.

Full-time, Series 7 retail investment sales representatives working in banks averaged $23,763 in gross commission revenues per month during the first quarter. That’s down from a monthly average of $25,382 for the first quarter of 2002, but it’s up slightly from $23,740 for the fourth quarter of 2002.

The sequential increase is the first recorded since the first quarter of 2001, according to the BISA data, which is compiled by Kenneth Kehrer Associates, Princeton, N.J.

The figures for licensed bankers paint an even brighter picture.

Licensed bankers generated an average of $2,392 in monthly gross commission revenues during the latest quarter. That’s down 13% from the average for the first quarter of 2002, but it’s up 28% from the average for the fourth quarter of 2002, BISA says.

Banks are coming to rely more and more on investment and insurance revenue.

The BISA figures show that banks brought in $2,462 in investment and insurance revenue for every $1 million in bank deposits during the first quarter, up from an average of $2,170 for the first quarter of 2002.

Fixed annuities contributed an average of $1,001 in revenue per $1 million in deposits, down from an average of $1,251 for the first quarter of 2002. Meanwhile, the average revenue contribution from variable annuities increased to $431 per $1 million in deposits, from $287.

The average contribution from mutual funds was $300 per $1 million in deposits, about the same as in the first quarter of 2002, but the average contribution from the sale of stocks and bonds soared to $435, from $152.

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