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December 10, 2007 at 06:24 AM
Banks’ income from the sale and servicing of mutual funds and annuities rose 4.6% in the first 9 months of 2007 compared to the same period of 2006, a new study reports.
Bank income earned from funds and annuities increased from $4.1 billion to $4.3 billion for the first 3 quarters between 2006 and 2007, according to the Bank Fee Income Report by Michael White Associates, Radnor, Pa.
Banks’ third quarter tally of almost $1.5 billion in mutual fund and annuity fee income was a record for any quarter, according to MWA, which compiled data from all 7,729 commercial and FDIC-regulated savings banks.
According to the report, 23.5% of banks sold funds and annuities. Looking at annuity sales alone, banks reporting commissions from the sale of annuities accounted for $714.9 million in annuity sales, or 16.5% of banks’ total year-to-date mutual fund and annuity income.
The data does not include sales of annuities and funds by non-banking divisions of major banks, such as units devoted to selling securities and other financial products, notes Michael White, president of MWA.
A more complete picture of banks’ total income from mutual fund and annuity sales will be available in January 2008, when bank holding company fee income data for third quarter becomes available, White notes.
The largest banks, with over $10 billion in assets, had the lion’s share of fund and annuity fee income, recording about $3.9 billion in income for these products YTD as of the end of the third quarter, up 4.5% from $3.7 billion for the same period in 2006.
The largest banks also were also more likely than banks in any other asset class to sell these products, with 73.6% reporting mutual fund and annuity revenue. Their annuity commissions of $567.2 million made up 79.3% of total annuity commissions among all banks.
