Banks’ annuity sales fell to $20.5 billion in the first half, down from $21.1 billion in the first half of 2006.

The drop was due mainly to a decline in sales of fixed annuities, to $7.8 billion, from $9.9 billion, according to Kehrer-LIMRA, a unit of LIMRA International, Windsor, Conn.

Bank sales of variable annuities rose to $12.7 billion, from $11.2 billion, over that same period, Kehrer-LIMRA reports.

AIG Annuity, a unit of American International Group Inc., New York, led the issuers of fixed annuities in the bank channel, generating a total of $2.9 billion in fixed annuity premiums.