Summary of financial results in Private Banking, Wealth Management



The first quarter 2021 results had a common theme in many cases – an unwinding of provisions that banks took a year ago to deal with the fallout from COVID-19. As a result, many results improved.

Here is a summary of the results of a series of large 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 an annual calendar and not all institutions are the same, so the results of stand-alone institutions like Julius Baer should be viewed differently from the results of integrated wealth management within an institution. bigger. These results can be revised later. As not all banks reported on the same day, exchange rate comparisons against the dollar were removed. We hope readers find it helpful to see these numbers put together in one article. To comment, email [email protected]

The bank reported first quarter 2021 net income of $ 7.9 billion, or $ 3.62 per diluted share, on revenues of $ 19.3 billion. This compares to net income of $ 2.5 billion, or $ 1.06 per diluted share, on revenue of $ 20.7 billion for the first quarter of 2020.

Revenues were down 7% from the same period a year earlier as higher investment banking and stock market income was more than offset by lower rates, no gains at the previous year’s market value on loan hedges within the institutional client group; and lower card volumes in global consumer banking. Net profit of $ 7.9 billion increased significantly from the period of the previous year, thanks to the drop in the cost of credit. Earnings per share of $ 3.62 increased significantly from the prior year period, reflecting the increase in net income, as well as a slight decrease in outstanding shares.

Private bank revenues of $ 1.0 billion increased 8%, driven by higher lending volumes and strong income from managed investments.

JP Morgan
The company reported net profit of $ 14.3 billion, up from $ 2.865 billion in the first quarter of last year. $ 5.2 billion in credit reserve releases caused the increase, along with rising income and lower credit loss provisions. Net income stood at $ 33.119 billion in the first quarter of 2021, up from $ 29.01 billion a year ago. Non-interest expense hit $ 18.725 billion, up from $ 16.791 billion a year earlier.

Unlike the $ 5.2 billion release of credit reserves in the first quarter, last year saw credit reserve build-ups of $ 6.8 billion. The bank boosted its reserves last year when the COVID-19 pandemic struck, forcing lenders to set aside capital for bad debts. Within the asset and wealth management arm, which includes private banking, the bank said net income reached $ 1.244 billion in the first quarter, from $ 669 million; net income reached $ 4.08 billion, up from $ 3.389 billion a year ago. Total assets under management stood at $ 2.8 trillion at the end of March.

Goldman Sachs
The company reported an increase in net income applicable to common shareholders to $ 6.711 billion in the first three months of 2021, from $ 1.123 billion a year earlier. Total operating costs reached $ 9.437 billion in the first quarter, from $ 6.458 billion, blunting some of the improved profit bottom line.

The company had to set aside significantly less money for credit losses over the 12-month period as the COVID-19 crisis that erupted last year began to ease. The allowance for credit losses represents net income of $ 70 million for the first quarter of 2021, compared to net provisions of $ 937 million for the first quarter of 2020 and $ 293 million for the fourth quarter of 2020 .

Within the consumer and wealth management industry, Goldman Sachs said net income was $ 1.738 billion, up from $ 1.492 billion a year earlier, an increase of 16%. Within this combination, private banking and loan revenues amounted to $ 371 million, up from $ 282 million a year earlier; wealth management revenues increased from $ 1.210 billion to $ 1.367 billion. The gain from private banking mainly reflected higher net interest income on loans, while incentive fees fell.

Morgan stanley
Its acquisition last year of discount E * TRADE, one of the largest such wealth management deals in years, helped propel its profits for 2020. It reported net sales of 13 , $ 6 billion for the fourth quarter ending Dec.31, 2020, up from $ 10.9 billion a year ago. . Net income applicable to Morgan Stanley was $ 3.4 billion, or $ 1.81 per diluted share, compared to $ 2.2 billion, or $ 1.30 per diluted share, for the same period a year.

The organization said the E * TRADE transaction affected comparisons of current year results with previous periods in its wealth segment. This agreement was concluded in early October 2020. The same month, Morgan Stanley announced the acquisition of asset manager, Eaton Vance. The transactions consolidated the firm’s presence in the discount brokerage and asset management arena, where scale is crucial in a low-margin business that is also under fierce competitive pressures.

BNY Mellon
Assets under custody / administration amounted to $ 41.7 trillion, up 18 percent, supported by higher market values, net new business and the one-dollar exchange rate effect. low. Assets under management stood at $ 2.2 trillion, up 23%.

Northern Trust
The company reported net profit of $ 375.1 million in the first quarter, up from $ 240.9 million in the previous quarter and $ 360.6 million in the previous year quarter. Total wealth management assets at the end of March stood at $ 355 billion, up from $ 347.8 billion at the end of 2020 and $ 276.7 billion a year earlier. Across all of its lines of business, assets under management were $ 1.449 billion, compared to $ 1.405 billion and $ 1.119 billion, respectively.

Black rock
The world’s largest asset manager bolstered its status by declaring $ 9 trillion in assets under management at the end of March, up from $ 6.466 billion a year earlier. It posted total net inflows of $ 171.6 billion in the first three months of this year, up from $ 34.9 billion in the first quarter of 2020. The company reported net profit of $ 1.199 billion, compared with $ 806 million.

UBS’s global wealth management arm posted pre-tax profit of $ 1.409 billion in the first quarter of 2021, up from $ 1.218 billion a year ago. GWM’s operating income was $ 4.848 billion, up from $ 4.547 billion a year earlier. Meanwhile, operating costs edged up to $ 3.439 billion from $ 3.329 billion a year earlier.

Total invested assets stood at $ 3.1 trillion in global wealth management at the end of March. New net assets amounted to $ 36.2 billion, with inflows coming from all regions. Commission-generating assets stood at $ 1.328 trillion at the end of March, up 4% sequentially. (New Fee-Generating Assets figure “reflects growth in clients’ invested assets from net flows relating to mandates, recurring-fee investment funds, hedge funds and private market investments, combined dividend and interest payments on mandates, less fees paid to UBS by clients.)

German Bank
Deutsche Bank announced that its private bank’s profits jumped 92% year-on-year in the first quarter of 2021 to reach € 274 million. The net income of private banking remained stable a year ago at 2.2 billion euros. The continued compression of the deposit margin due to interest rate headwinds was mitigated by continued business growth, with a record net new business volume of € 15 billion in the quarter. The net new business volume includes a net inflow of investment income of 9 billion euros and new net customer loans of 4 billion euros. In private banking in Germany, revenues increased by 1 percent, while in private international banking, revenues decreased by 1 percent compared to the previous year.

Assets under management increased by € 26 billion to € 519 billion in the quarter, exceeding € 500 billion for the first time since 2017, reflecting net investment income and positive effects market performance and currency conversion. Across the Deutsche Bank Group, its allowance for credit losses collapsed 86%, down from 506 million euros in the first quarter of 2020.

BNP Paribas
The wealth and asset management branch recorded revenue of 784 million euros in the first three months of 2021, up from 743 million euros a year ago, although it was down from 786 million euros in the last quarter of last year. Pre-tax income jumped to 275 million euros from 102 million euros. Operating expenses and depreciation fell to 612 million euros from 642 million euros a year earlier. There were “very good net asset inflows, particularly with large accounts and a very good level of commissions on assets under management and on transactions” in the wealth business during the quarter, said the company, without specifying any figures.

Explaining its results, the group said that the impact of the low interest rate environment on the net interest income of wealth management was partly offset by higher commissions. Income from asset management is “solid”, driven by strong 2020 net inflows and the performance effect. Income from Real Estate Services “is very gradually returning to normal.”


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