Summary of bank and wealth manager results for the second quarter and first half of 2022
A roundup of the financial results of major banks during the second quarter of 2022 and the full year. (Results are subject to review.)
Here is a summary of the results of a series of major banking groups and a few other financial players around the world. The results focus on the largest institutions that provide wealth management. Not all banks report on a calendar year, and not all institutions are alike, so the results of stand-alone institutions such as Julius Baer need to be viewed differently than the results of wealth management integrated within a larger institution. These results may be revised later. Not all banks reported on the same day, so dollar exchange rate comparisons were removed. We hope readers will find it helpful to see these numbers brought together in one article. To comment, send an e-mail [email protected]
Its second-quarter results show revenue grew 11% better than expected year-on-year, driven by higher rates, client activity in the markets and continued growth. dynamics of card business in the United States. This was partially offset by a slowdown in investment banking activity as well as headwinds on investment fees in global wealth management. Revenue reached $19.6 billion in the second quarter, more than $1 billion above estimates, with growth in both net interest income and non-interest income.
The increase in net interest income was primarily due to the benefits of higher rates as well as strong volumes in the institutional client group, retail banking and wealth management. Global wealth management revenue of $1.9 billion nonetheless remained flat as headwinds in investment fees, particularly in Asia, were offset by growth in average deposits and loans.
Within the asset and wealth management arm – which includes private banking – JP Morgan said net profit was $1.0 billion, down 13% from a year ago . Net income was $4.3 billion, up 5%, primarily due to growth in deposits and loans on higher balances and spreads, partially offset by valuation losses from investments compared to prior year gains and lower performance fees. Non-interest expense increased 13% to $2.9 billion, driven by higher structural costs and business investments, including compensation, and higher volume and income, including distribution fees.
It announced a 28% drop in its net profit for the three months to the end of June, amounting to 8.649 billion dollars. The lender built up $428 million in net credit reserves during the quarter, compared to a net release of $3.0 billion in the same period a year ago. The change made headlines.
The private banking, consumer banking and wealth arm saw a 33% year-on-year increase in pretax profit to $238 million, while net profit rose 37% to $201 million. Net revenue for this business division rose 21% to $2.104 billion, while the provision for credit losses rose to a net release of $254 million last quarter, a change of 323% during of the last 12 months.
Assets under watch across Goldman Sachs fell $76 billion in the quarter, with property and consumer management AuS down $13 billion and asset management AuS down $63 billion. of dollars. In total, consumer and wealth management AuS were $738 billion at the end of June; AuS asset management was $1.656 trillion
Pretax profit fell to $3.319 billion in the second quarter of 2022 from $4.566 billion a year ago as net revenue fell and non-compensation costs rose. Net revenue fell to $13.132 billion from $14.759 billion; non-compensation spending rose from $3.697 billion to $4.162 billion, it said in a statement.
Within the wealth management business, this division generated a pre-tax margin of 26.5% or 28.2% excluding integration costs. Net income was $5.7 billion, negatively impacted by mark-to-market losses on investments associated with certain employee deferred compensation plans. The business added net new assets of $53 billion in the quarter and $195 billion in the first half of 2022. The quarter also saw continued growth in bank loans and $29 billion in fee-based flows.
Wealth management pretax profit at BNY Mellon was $296 million in the three months to June 30, down slightly from $299 million a year earlier. Market and wealth management services, including the Pershing business that provides custody and other offerings to wealth managers and banks, were $1.314 billion in the second quarter of 2022, down from $1.192 billion. billion dollars a year earlier. Investment services fees at Pershing rose from $439 million to $479 million for the year, up 9%
Chicago-based Northern Trust’s net income was $406 million in the fourth quarter of 2021, nearly doubling from $240 million a year earlier, while revenue hit $1.68 billion dollars, up 9%. Wealth management assets under management were $416 billion, up 20% at the end of 2021 from $347.8 billion a year earlier. With respect to wealth assets under custody/administration, the figure increased by 21% to $1.065 billion at the end of December 2021. Total wealth management, investment and other service fees reached $485.9 billion, up 13%. Within Northern Trust’s Global Family Office segment, those fees fell 1% year-on-year in the quarter to $73 billion. Commissions in the family office segment decreased sequentially, primarily due to increased money market mutual fund fee waivers.
The world’s largest fund management company said its total assets under management could not withstand the asset erosion impact of falling markets. In its results for the three months to the end of June, it reported total assets under management of $8.487 billion, down 11% from a year earlier. Total net flows to the business held steady, however, and totaled $89.573 billion in the quarter.
On an adjusted basis, net profit fell 30% year-on-year to $1.122 billion; diluted earnings per share were $7.36 per share, down 30%. Operating profit fell to $1.727 billion, down 14%. Revenues fell 6%.
He said the global wealth management arm posted second-quarter 2022 pre-tax profit of $1.157 billion, up from $1.294 billion a year ago and $1.31 billion in the first quarter of this year. year. Total wealth management revenue fell 2% to $4.667 billion; spending was $3.523 billion, up from $3.479 billion.
Net interest income increased by 24%, mainly due to higher deposit income, which was due to a combination of higher margins on deposits, due to higher interest rates, and by increasing deposit volumes. Recurring net commission income decreased by 6%, mainly due to negative market performance and currency effects, partially offset by net new commission-generating assets over the last 12 months.
The bank recorded a net loss, attributable to shareholders, of 1.593 billion francs, against a net profit of 253 million francs a year earlier. At the investment banking level in particular, Credit Suisse said that on an adjusted basis, that division recorded a “significant” pre-tax loss of $860 million, compared to a pre-tax profit of $663 million in 2Q21, “reflecting extremely challenging market conditions, particularly in capital markets. (IB figures were given in US dollars rather than Swiss francs.)
On an adjusted basis, its pre-tax wealth management income fell to 114 million Swiss francs, from 432 million Swiss francs, a 74% drop from a year ago due to the reduction in the customer activity, lower volumes affecting revenues and higher costs.
Adjusted pre-tax profit was impacted by certain asset impairments and non-operating charges, including CHF 17 million related to certain third-party assets, mark-to-market losses in Asia-Pacific financing of CHF 21 million , 24 million francs related to the supply chain financing fund fee waiver program and other costs. WM’s net income fell 34% to 1.3 billion francs.
The WM business recorded net asset outflows of CHF 1.4 billion in the second quarter, mainly driven by outflows from EMEA and Switzerland, including client deleveraging, partially offset by inflows from Asia-Pacific and the Americas. Total assets under management were CHF 662 billion, compared to CHF 769 billion, mainly due to falling markets.