Banks Fee Income

Rose By $1 Billion In 2003

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Banks earned a new record of over $10 billion in investment commissions and fee income in 2003, according to the 2003 Year-End Bank Insurance & Investment Fee Income Report by Michael White Associates, LLC, Radnor, Pa.

Banks investment fee income increased by over $1 billion, or 11.5%, from $9.1 billion in 2002 to $10.2 billion in 2003.

About one-quarter of the banks in the United States engaged in investment activities that produced fee revenue, according to MWA.

However, among the biggest banks, that ratio was much higher.

Among banks with $10 billion and more in assets, almost 80% reported investment income, generating a total of almost $9.3 billion in fees, MWA reports. These large banks accounted for more than 91% of all bank investment fee income in 2003, up about 1% over their 2002 market share.

Banks under $1 billion in assets accounted for only 4%, or $402 million in investment fee income in 2003.

Banks under $100 million in assets produced around $18 million, or just 0.2% of the industry’s total.

The top 5 banks nationally in investment fee income last year were J.P. Morgan Chase Bank (N.Y.), Bank of America, N.A. (N.C.), Deutsche Bank Trust Company Americas (N.Y.), Wachovia Bank, N.A. (N.C.), and PNC Bank, N.A. (Pa.).

Banks over $10 billion in assets had the highest mean and median investment fee income and ranked first in every mean and median measurement of investment fee income. Their mean ratio of investment fee income to non-interest income was 9.1% and their median ratio was 4.0%.

Banks in the eastern United States dominated bank investment fee income in 2003, MWA found.

With the highest participation rate in investment fee activities (38.6%), the Northeast region maintained its first place among 6 regions with $4.5 billion of bank investment fee income in 2003. The Southeast region was second with $2.5 billion, and the Mid-Atlantic region was third with $1.3 billion.

MWA compiled the data from reports filed for 2003 with the Federal Reserve Bank and the Federal Deposit Insurance Corporation by all 8,254 commercial banks and federally insured savings banks.


Reproduced from National Underwriter Edition, May 28, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.