Bank of America Corp. (BAC) reported Tuesday a net loss of $7.3 billion, or $0.77 per diluted share, in the third quarter of 2010. The loss came largely from a non-tax deductible goodwill impairment charge of $10.4 billion in the bank’s credit card unit due to federal regulations limiting debit fees.
Excluding this charge, net earnings were $3.1 billion, or $0.27 per diluted share, compared with a net loss of $1.0 billion, or $0.26 per diluted share, in the third quarter of 2009. Analysts’ expectations were for earnings per share of $0.16.
In contrast, the global wealth and investment management, or GWIM, unit reported total revenues of $4.07 billion, up from $3.87 billion in ’09 but down from $4.33 billion in the previous quarter. Net income was $313 million vs. $234 million last year and $356 million in the second quarter.
GWIM's largest contributor, Merrill Lynch, reported that as of Sept. 30, it included 15,340 financial advisors, up from 14,979 a year ago and 15,142 in the previous quarter.
The number of U.S. Trust wealth advisors is 2,128, giving the global wealth and investment management unit (or GWIM), a combined 16,790 financial advisors. This puts it close to Morgan Stanley Smith Barney, which had 18,087 FAs as of June 30; the Merrill rival reports its third-quarter earnings on Wednesday.
“Despite a challenging market, Merrill Lynch financial advisors have been strong contributors to the overall company’s revenue stream,” said Mark Elzweig, an executive search consultant in New York. “The advisor numbers verify the fact that Merrill Lynch has been a successful player in the wirehouse recruiting wars – and has shown it can increase its headcount by hiring high-end professionals.”
Merrill's Sales Per Rep
In terms of annualized advisor revenues (or GDC), Merrill FAs averaged $851,000 in sales in the recent quarter vs. $853,000 in the second quarter and $837,000 a year ago. Based on the first nine months of 2010, the advisors have annualized sales of $841,000 vs. $825,000 in the same period of 2009.
In contrast, Morgan Stanley’s advisors had annualized sales of $679,000 as of the second quarter.
Sales at Merrill Lynch hit $3.10 billion vs. $3.08 billion last year and $3.12 billion in the second quarter.
The GWIM unit reported total revenues of $4.07 billion, up from $3.87 billion in ’09 but down from $4.33 billion in the previous quarter. Net income was $313 million vs. $234 million last year and $356 million in the second quarter.
Client assets for the GWIM unit totaled $2.17 trillion in the third quarter, down slightly from $2.23 trillion a year ago but up a bit from $2.09 trillion in the earlier quarter.