A summary of the major institutions' wealth management financial results for 2019.

Here is a summary of the results from a range of the major banking groups - and some other financial actors - around the world. The results focus on the largest institutions which provide wealth management. Not all banks report on a calendar year schedule, and not all of the institutions are alike, so the results from standalone institutions such as Julius Baer should be viewed differently from wealth management results embedded within a larger institution. These results may be subsequently revised. As not all the banks reported on the same day the exchange rate comparisons to the dollar have been taken out. We hope readers find it useful to see thse figures collated into one article. To comment, email tom.burroughes@wealthbriefing.com

JP Morgan 
The bank’s asset and wealth management arm logged net income in the fourth quarter of 2019 of $785 million, rising from $604 million a year earlier, and on the back of rising net revenue at $3.7 billion, versus $3.349 billion. 

Assets under management rose by 19 per cent to stand at $2.4 trillion, buoyed by higher markets and inflows into long-term and liquidity products. At the overall group level, net income in Q4 stood at $8.52 billion, up from $7.066 billion a year earlier but falling from $9.08 billion in the third quarter

Bank of America
The global wealth and investment management arm said that client balances in the fourth quarter of 2019 rose by 16 per cent year-on-year to $3.0 trillion. Net income rose by 7 per cent in Q4, from the same period a year earlier, to $4.3 billion on a 0.4 per cent rise in revenue, at $19.5 billion. The GWIM arm of the US banking group logged a pre-tax margin of 29 per cent, a record high. Referrals to and from GWIM businesses rose by 25 per cent on the year, it said.

New client relationship growth rates came in at record levels, rising by 64 per cent in 2019 from a year before. The total number of wealth advisors, including the Merrill and private banking business lines, held steady at 19,440. 

Morgan Stanley 
Wealth management reported net revenues for the current quarter of $4.6 billion compared with $4.1 billion a year ago. Pre-tax income of $1.2 billion in the current quarter resulted in a pre-tax margin of 25.4 per cent. Net revenues rose by 11 per cent from a year ago. Within wealth management, fee-based client assets at the end of last year stood at $1.267 trillion, up from $1.046 trillion a year earlier. The wealth business delivered a pre-tax margin of 27.2 per cent.

Across the whole firm, net revenues stood at $10.9 billion for the fourth quarter ended December 31, 2019 compared with $8.5 billion a year ago. Net income applicable to Morgan Stanley was $2.2 billion, or $1.30 per diluted share compared with net income of $1.5 billion, or $0.80 per diluted share, for the same period a year ago. 

Goldman Sachs
The consumer and wealth management arm of the firm reported net revenues of $1.408 billion in the fourth quarter of 2019, an 8 per cent year-on-year rise. Across the whole of the US-listed group, it logged net revenues of $9.955 billion, rising by 23 per cent, with asset management and the global markets divisions making strong contributions.

Operating costs, at $7.298 billion in Q4, rose by 42 per cent on the year, at a time when Goldman Sachs has spent significantly. The firm explained that provision for litigation and regulatory proceedings rose. Last year Goldman Sachs bought US wealth management firm United Capital, in a move that sees the group push after a wider clientele than its more traditional higher-end UHNW base. Some cost increases were associated with the United Capital acquisition. Transaction banking and credit card services also added to costs. For the entire firm, it said that assets under supervision rose by $317 billion last year to a record of $1.86 trillion.

Wells Fargo
The wealth and investment management arm of Wells Fargo, which includes the Abbot Downing business that serves ultra-high net worth clients, sustained a drop in this segment’s net income in the fourth quarter of 2019 from the previous quarter and a year ago, with higher costs taking a toll. The parent bank's profit was hit hard by costs related to its long-running fake-account scandal and weakness in some business areas.

Net income in Q4 was $254 million, down from $689 million a year earlier, and slumping from $1.28 billion in Q3 2019. Non-interest expense increased to $685 million, or 23 per cent in Q4 from the same quarter of 2018, primarily driven by higher employee benefits expense from an increased deferred compensation plan expense (largely offset by net gains from equity securities), higher operating losses, higher equipment expense related to the strategic reassessment of technology projects, and higher regulatory, risk and technology expense, partially offset by lower core deposit and other intangibles amortization expense.

Across the wealth and investment management arm as a whole, total client assets stood at $1.9 trillion, up by 10 per cent from a year ago, primarily due to higher market valuations, partially offset by net outflows in the Correspondent Clearing business. Within wealth management specifically, client assets were $240 billion at the end of 2019, up by 7 per cent from the prior year.

BNY Mellon
Assets under custody/administration stood at $37.1 trillion at the end of December 2019, rising by 12 per cent, primarily reflecting higher market values and client inflows. Assets under management reached $1.9 trillion, up by 11 per cent, primarily reflecting higher market values and the favorable impact of a weaker US dollar.

For the business as a whole, net income stood at $1.449 billion in Q4, up from $870 million a year earlier. Fee revenue rose to $3.971 billion, up from $3.146 billion. Total revenue was $4.778 billion, up from $4.007 billion.

Northern Trust
The firm reported fourth quarter net income per diluted common share of $1.70, compared with $1.80 in the fourth quarter of 2018 and $1.69 in the third quarter of 2019. Net income was $371.1 million, compared with $409.9 million in the prior-year quarter and $384.6 million in the prior quarter. The current quarter included a $20.8 million pre-tax charge recorded in other operating income related to the decision to substantially sell all of the lease portfolio and a $6.8 million pre-tax software disposition charge recorded in non-interest expense. 

Total assets under custody/administration stood at $11.311 trillion, up by 19 per cent on a year earlier. Wealth management total assets under custody/administration stood at $738 billion, up by 16 per cent. Wealth management assets under management were $313.8 billion, rising by 13 per cent.

Charles Schwab
The firm said that its net income for the fourth quarter of 2019 was $852 million, falling by 9 per cent from $935 million for the fourth quarter of 2018. Net income for the twelve months ended December 31, 2019 was a record $3.7 billion, up by 6 per cent year-over-year.

Net revenues in Q4, 2019 were $2.606 billion, falling by 2 per cent year-on-year; for the whole of last year they were $10.721 billion, rising by 6 per cent. 

BlackRock
The US-listed firm reported total assets under management of more than $7.429 trillion as at December 31, 2019, against $5.976 trillion a year before. As well as rising market levels, the colossal figure was lifted by net inflows of $438.736 billion in 2019. Revenues in the fourth quarter of last year came in at $3.977 billion, rising by 16 per cent from the same quarter a year ago. The firm made an operating margin of 38.7 per cent, widening from 36.43 per cent a year before. Net income surged by 40 per cent year-on-year to $1.3 billion in Q4.

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UBS
Its global wealth management business in the fourth quarter of 2019 logged a 160 per cent year-on-year jump in adjusted pre-tax profit, standing at $787 million. Operating costs fell significantly in Q4 2019 from a year before, explaining some of the profit gain. Recurring net fee income fell as a result of margin compression and by client moves into products which earned the bank a smaller margin, but transaction-based income rose by 26 per cent, or by 14 per cent when the fee paid by personal and consumer banking is stripped out. The adjusted cost/income ratio was 80.8 per cent. There was some net money outflow of $4.7 billion in Q4, caused largely by movements in the Americas business. 

For the whole of 2019, the global wealth division logged a fall in recurring net fee income. Transaction-based income rose by 3 per cent, however; net interest income slipped by 4 per cent. Throughout last year, UBS brought in net new money of $31.6 billion. Across the whole of UBS’ business lines, fourth-quarter 2019 adjusted pre-tax profit stood at $1.212 billion (rising by 153 per cent from the same quarter in 2018). The adjusted figures excluded $146 million of restructuring expenses, $110 million impairment of goodwill, and a loss of $29 million from properties held for sale. Total invested assets across UBS stood at $3.607 trillion at the end of December 2019, against $3.101 trillion a year earlier.

Credit Suisse
The bank said that it had logged SFr3.419 billion in income attributable to shareholders for 2019, surging by 69 per cent from the year before. Net revenues rose by 7 per cent to SFr22.484 billion. Within the overall figure, wealth management-related revenues rose by 9 per cent to SFR14.398 billion. Return on tangible equity rose to 9 per cent in 2019, up by 4 percentage points.

The bank attracted group net new assets of SFr79.3 billion last year, a record since 2013, taking its total asset base to a record of SFr1.5 billion in assets under management. When total provisions for litigation are included, total operating costs stood at SFr17.4 billion, up a touch from SFr17.3 billion in 2018.

Julius Baer
The bank reported a 12 per cent rise in assets under management in 2019 from a year earlier, standing at SFr426 billion and driven partly by a SFr10.6 billion (or 2.8 per cent) rise in net new money. 

Net profit attributable to shareholders stood at SFr465 million, falling by more than a third (37 per cent). At the same time it announced targets for 2020-2022, including a SFr200 million cut in its cost base, and measures to simplify its organization. The change will include closing its booking centre in the Bahamas. 

Net new money inflow was hampered by outflows at Italian asset and wealth management subsidiary Kairos, following underperformance in its funds in 2018 and a number of management departures in 2019. Excluding the Kairos situation, net inflows for the group developed at a net new money growth rate of 4.1 per cent.

Vontobel
Vontobel reported a net profit of SFr265.1 million for 2019, a 14 per cent gain from the year before. When one-off items are excluded, the net profit figure came in slightly lower at SFr258.9 million, up by 4 per cent. 

Total advised client assets rose by 17 per cent in 2019 to finish at SFr226.1 billion at the end of December, and net new money growth was 6.9 per cent, also beating Vontobel’s targets. In 2019, net new money came in at SFr117 billion. The group proposed to boost its dividend to SFr2.25 per share, up by 7 per cent on the year.

It had a Common Equity Tier 1 ratio – a common international yardstick of a financial group’s capital strength – of 13.5 per cent at the end of 2019, up from 12.3 per cent. The cost/income ratio, adjusted for one-off items, was 75.1 per cent. Vontobel has set itself a cost/income ratio target of below 72 per cent for 2020.

Pictet
It reported a 2.4 per cent year-on-year drop in operating income down to SFr2.629 billion, and a 9.5 per cent drop in consolidated net profit down to SFr539 million. The decline was largely due to continued investments in staff and infrastructure. The group added 374 employees in 2019. 

Assets under management or custody rose by 16 per cent to SFr576 billion to December 31, 2019, up from SFr 496 billion from the previous calendar year. The group apportioned the rise to combined strong markets and net inflows into its three business units. Net new money into asset management, wealth management and asset services reached SFr25 billion.

The core tier 1 capital ratio for 2019 remained stable at 20.5 per cent based on SFr2.59 billion of core tier 1 equity (the strongest), while the liquidity coverage ratio stood at 156 per cent. These ratios are measured against the minimum 7.8 per cent core tier 1 capital ratio set by the Swiss regulator FINMA, and the minimum 100 per cent liquidity ratio under Basel III rules.

Lombard Odier
Total client assets at Lombard Odier for 2019 stood at SFr299 billion, up by 16 per cent on the previous year. Total consolidated net profit for the year stood at SFr203 million and operating income was up by 3 per cent to SFr1.2 billion. Profits at the bank, excluding one-off items, rose by 6 per cent to SFr175 million. The group reported a total balance sheet of SFr17.4 billion that remained “highly liquid” and “conservatively invested”. It reported solid capitalization, with a CET1 ratio of 29.8 per cent and a liquidity coverage ratio of 204 per cent for the year, and no external debt. The group’s Fitch credit rating remained at AA as of July 2019.

Deutsche Bank
Fourth-quarter net revenues were €2.0 billion, down by 4 per cent, or down by 2 per cent if adjusted for specific revenue items. Revenues in the Private Bank Germany fell by 7 per cent, reflecting interest rate-driven compression of deposit margins, funding cost allocations and lower gains from asset sales. This was partly offset by the seventh consecutive quarter of loan growth, with €2.0 billion in net new client loans, mainly mortgages. Private and Commercial Business International revenues were up by 3 per cent as strong growth in loan products and investment products, combined with repricing measures, offset margin compression. Wealth Management revenues were down by 3 per cent, due to a €14 million decline in revenues relating to Sal. Oppenheim legacy workout activity and the non-recurrence of a €40 million gain on a property sale in Sal. Oppenheim in the prior year quarter. Adjusting for these items, revenues were up by 11 per cent, reflecting improved market conditions and targeted hiring.

Full-year net revenues were €8.2 billion, down by 5 per cent. Excluding specific revenue items, revenues were down by 2 per cent, as loan growth and an increase in fee income, together with repricing measures, materially offset interest rate headwinds.

The private bank reported a loss of €283 million in the fourth quarter. Adjusted for transformation charges, restructuring and severance and specific revenue items, profit before tax in the fourth quarter was €45 million. In the full year, the business reported a loss before tax of €265 million. Adjusted for aforementioned items and goodwill impairments, full-year profit before tax was €524 million.

Societe Generale
Asset and wealth management arms logged net banking income for 2019 at €947 million, rising by 1.2 per cent on a year before. The figure was adjusted for the sale of SocGen's Belgian private banking group. In the fourth quarter of last year, net banking income in the wealth and asset management business was €243 million, an 8.2 per cent year-on-year gain.

At the end of December last year, private banking assets under management rose by 1.4 per cent from the end of September 2019, reaching €119 billion.

BNP Paribas
The wealth and asset management arm clocked up a rise in revenues in the fourth quarter of 2019, at €957 million, versus €803 million in the previous three-month period, and down from €866 million a year earlier. Pre-tax income in this segment rose to €216 million in Q4 2019 from €146 million in the same quarter the previous year. For the whole of 2019, the insurance, wealth and asset management businesses continued their growth. Assets under management reached €1.123 trillion at December 31, 2019. They rose by 9.3 per cent compared with December 31, 2018 due in particular to a “very favorable performance effect”: +€79.7 billion on the back of the rebound of financial markets.

Net asset inflows came in at €20.2 billion with good net asset inflows at wealth management in Asia, Germany and Belgium, slight asset outflows in asset management due to money market funds, good net asset inflows in real estate investment management in Germany and France and, lastly, “good asset inflows” in insurance in particular in unit-linked policies. 

ABN AMRO
The bank reported net profit of €2.046 billion down by 13 per cent for the year. The bank said that the Q4 2019 net profit of €316 million, which was down by 43 per cent compared with Q3 the previous year but flat on the same quarter of 2018, was hampered by low interest rates and high loan impairments in sectors of its corporate and institutional banking (CIB) division.

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HSBC
The bank logged a reported profit attributable to ordinary shareholders of $6.0 billion in 2019, sliding by more than half (53 per cent) from a year ago, affected by a goodwill impairment of $7.3 billion. Reported profit before tax fell by 33 per cent year-on-year to $13.3 billion. Reported revenue rose by 4 per cent and reported operating costs rose by 22 per cent because of a goodwill impairment of $7.3 billion. The goodwill impairment was mainly related to its global banking and markets business and the commercial banking operations in Europe. These setbacks reflected lower long-term economic growth rate assumptions, and additionally for GB&M, the planned reshaping of the business. Its global private banking arm drew in $23 billion of net new money in 2019 and increased adjusted revenue by 5 per cent. For 2019, private banking’s adjusted pre-tax profit was $402 million, up from $339 million in 2018. The cost/income ratio was 77.1 per cent, down from 81.1 per cent.   

Barclays 
The UK-listed group reported a slight rise in its full-year-income, at £21.6 billion, from £21.1 billion a year before. Costs slipped to £13.6 billion from £13.9 billion in 2018. The cost/income ratio of the bank narrowed to 63 per cent from 66 per cent. Pre-tax profit was £6.2 billion, up from £5.7 billion.

The bank had a Common Equity Tier 1 ratio of 13.8 per cent, up from 13.2 per cent a year before. Barclays does not break out its wealth and investment segment’s results.

Lloyds Banking Group
The group’s wealth and insurance group, which includes its joint venture with Schroders, reported underlying profit of £1.101 billion in 2019, up from £927 million a year earlier. Net income rose by 7 per cent year-on-year to £2.133 billion.

Standard Chartered
The bank reported an 8 per cent year-on-year rise in underlying pre-tax profit, standing at $4.2 billion, while statutory pre-tax profit rose by 46 per cent, standing at $3.7 billion. The bank said that the coronavirus outbreak and slower economic growth will drag on its ability to hit its return on a tangible equity target of 10 per cent. Income rose by 2 per cent, at $15.3 billion, when measured on a constant currency basis, the bank said in a statement. Costs fell by 1 per cent during 2019 to $10.1 billion.

The firm’s private bank logged pre-tax underlying profit of $94 million, bouncing back from a $14 million loss in 2018. Private banking operating income was $577 million, against $516 million in 2018. The underlying profit figure was helped by a net $31 million release in credit impairment and improvement in top-line growth. The private bank had a cost/income ratio of 89.1 per cent at the end of 2019.

Underlying return on equity was 7.3 per cent. Total private banking assets under management rose by $8 billion, equal to 14 per cent on a year earlier, driven by $2.6 billion of net new money.

Royal Bank of Scotland (now renamed as Natwest)
The private banking arm, covering Coutts and Adam & Company, reported a small rise in total income for 2019, coming in at £777 million versus £775 million in the previous year. Operating profit dipped to £297 million from £303 million. The cost/income ratio expanded to 62.5 per cent as at December 31, 2019, from 61.7 per cent a year before, RBS, in which the UK government still holds an ownership stake a decade after the financial crisis, said in a statement.

Assets under management inched up to £30.4 billion at the end of last year, rising from £26.4 billion a year before, it said. Lending increased by £1.2 billion to £15.5 billion, rising by 8.4 per cent.

Royal Bank of Canada
Royal Bank of Canada, said that in the three months to the end of January 2020, it logged net income of C$3.509 billion, up $337 million or 11 per cent from the prior year, with strong diluted EPS growth of 12 per cent. Results were driven by record earnings in Capital Markets, as well as by strong earnings growth in Personal & Commercial Banking. The bank said earnings in wealth management and insurance were “solid”. (The bank operates a different end point for its reporting than the calendar years used by most other institutions.)

Within wealth management, RBC reported net income of C$623 million, up by 4 per cent from a year ago, primarily due to an increase in average fee-based client assets reflecting market appreciation, largely due to strong North American equity markets. Higher transaction volumes also contributed to the increase. These factors were partially offset by higher variable compensation commensurate with revenue growth, as well as higher technology and staff-related costs. 

DBS
The Singapore-based group logged a 14 per cent year-on-rise in net profit to S$6.39 billion for 2019. Total income increased by 10 per cent over the year to $14.5 billion from broad-based business momentum in spite of external headwinds. Return on equity advanced from 12.1 per cent to a record 13.2 per cent. Fourth-quarter earnings increased by 14 per cent to S$1.51 billion. Total income rose by 7 per cent to S3.46 billion from loan growth and a double-digit improvement in fee income.

By business unit, consumer banking/wealth management income rose by 11 per cent to S$6.30 billion, led by deposit and investment product income. Wealth management fees rose by 13 per cent as demand for investment products accelerated in the second half. Investment banking fees increased by 66 per cent as income from equity capital markets reached a new high. Card fees advanced by 11 per cent from higher transactions across the region. Transaction service fees increased by 6 per cent, mainly from cash management. Brokerage fees fell by 26 per cent on reduced market volumes.

OCBC
The parent of Bank of Singapore, the private bank, logged wealth management income – comprising income from insurance, private banking, asset management, stockbroking and other wealth management products – of S$3.4 billion, up by 20 per cent. The income represented 31 per cent of the bank’s total income for the year, up from the 29 per cent share a year before.

UOB
Wealth management income totaled S$641 million, up by 18 per cent on a year before. Wealth management income accounted for 31 per cent of UOB’s total net fee and commission income, up from 27 per cent a year before.