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February 01, 2016 at 07:00 PM
Bank of America said its fourth-quarter profits increased 9% to $3.3 billion, or $0.28 per share, from $3.1 billion, or $0.25 per share, a year earlier. Excluding accounting adjustments and onetime items, its net income was $0.29 a share, topping analysts’ estimates.
Revenue, however, fell short of estimates at $19.5 billion, a jump of roughly 4% from last year.
The bank’s global wealth group, which includes Merrill Lynch, saw its results weaken — with net income falling 9% year over year to $614 million and revenue down nearly 4% to $4.4 billion. Its pretax margin was 21%, while long-term assets flows were $6.7 billion in Q4.
“Strong client activity, as demonstrated by long-term AUM flows and deposit flows, was more than offset by difficult markets causing lower asset management fees and transactional revenue,” BofA said in a statement.
For the full year, the wealth and investment unit reported a 2% drop in revenue to $18 billion in 2015, with about $15 billion related to the Merrill Lynch operations. Net income declined 13% to $2.6 billion. Client assets for the group stood at about $2.5 trillion as of Dec. 31, 2015.
The Merrill Lynch group of advisors includes 14,533 registered reps, up 448 from a year ago but down 30 from the prior quarter. U.S. Trust has close to 2,200 registered reps.
On average, the Merrill Lynch advisors have annual fees & commissions of $990,000; however, veteran advisors’ average productivity is $1.3 million. With total assets of about $2 trillion, Merrill FAs have about $138 million in assets under management per rep.
Morgan Stanley
Meanwhile, Morgan Stanley reported fourth-quarter net income of $908 million, or $0.39 per share, up from a loss of $1.6 billion, or $0.91 per share, a year earlier. After accounting adjustments, earnings were $0.43 a share, beating estimates.
The wealth group had revenues of $3.75 billion, down from $3.80 billion in the year-ago period. Pretax net income, though, rose to $768 million in the most recent quarter vs. $736 million in Q4’14; the pretax margin for Q4’15 was $20%.
For the full year, the group’s net revenues totaled $15.1 billion, up from $14.9 billion in 2014. Pretax profits for the year were $3.3 billion compared with $3.0 billion in the prior 12 months. The pre-tax profit margin for all of 2015 was 22%. After-tax profits were $2.1 billion, down from $3.2 billion in 2014.
