As full-year bank result reports come out in a few days' time, here is a reminder of what happened during the third quarter of what was a tumultuous year.

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 with 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

Goldman Sachs
The consumer and wealth management arm chalked up net revenues of $1.49 billion for the third quarter of 2020, 13 per cent higher than the third quarter of 2019 and 10 per cent higher than the second quarter of 2020. Within wealth management specifically, net revenues rose by 6 per cent year-on-year to $1.17 billion, helped by higher management and other fees, primarily reflecting the impact of higher average assets under supervision and higher transaction volumes, partially offset by a lower average effective management fee due to shifts in the mix of client assets and strategies. 

Citigroup
It reported net income of $3.2 billion for the third quarter, down by 34 per cent year-on-year. Nevertheless, the numbers were viewed as a stabilizing trend after it had to set aside money to cover bad loans and suffered a sharp fall in profit in the middle of the year. Earnings per share fell by a third to $1.40, but beat the 93 cents forecast by some analysts. Operating costs stood at $11 billion for the quarter, rising by 5 per cent based on putting in greater risk management controls and the ongoing COVID-19-related expenses.

Bank of America
The group’s global wealth management arm logged record client balances of $3.1 trillion, rising by 6 per cent, driven by higher market valuations and client flows. The private bank added more than 1,400 new relationships from the start of 2020. At group level, Q3 net income was $4.9 billion, declining from $5.8 billion.

JP Morgan
The asset and wealth management arm of JP Morgan said that it logged net income of $877 million in Q3, up from $668 million. Net revenue was $3.74 billion, up from $3.58 billion. Assets under management stood at $2.6 trillion, rising by 16 per cent.

Wells Fargo
The wealth and investment management arm of Wells Fargo, covering business lines such as Abbot Downing, reported that total revenue for the three months to September 30 came in at $3.794 billion, up from $3.66 billion in the previous quarter but sliding from $5.141 billion a year ago. Net income at this business unit rose to $463 million in Q3 from $180 million in the previous three months, but it is way below the $1.28 billion result for the same quarter of 2019. Average assets stood at $88.2 billion, against $87.7 at the end of June.

Morgan Stanley
The bank’s net revenues were $11.7 billion in the third quarter - rising from $10 billion a year before. It chalked up net income in Q3 of $2.7 billion, up from $2.2 billion a year before. The Wall Street firm, which a week before announced that it was buying asset management house Eaton Vance, said that its wealth management arm delivered pre-tax income of $1.1 billion with a reported pre-tax margin of 24.0 per cent. It said the results “reflect strong fee-based flows and significant increases in bank lending and deposits." 

Net revenues in Q3, 2020 stood at $4.657 billion in the wealth management side, up from $4.358 billion a year earlier. Fee-based client assets in wealth management reached $1.333 trillion at the end of September 2020, up from $1.186 trillion a year before. Wealth management total compensation rose to $2.684 billion from $2.34 billion a year ago. Morgan Stanley said that its provision for credit losses on loans and lending commitments was $111 million for Q3, compared with $51 million a year earlier, but down from Q2 this year. 

BNY Mellon
The US group reported an attributable net income of $944 million for the third quarter of 2020, down from $1.04 billion a year earlier. Total revenue stood at $3.847 billion, down from $3.861 billion a year ago. Its pre-tax operating margin came in at 30 per cent down from 33 per cent a year earlier. On the wealth management side, Q3 revenue came in at $277 million, down from $279 million a year earlier. Across the wealth and investment group, pre-tax income was $245 million, down from $295 million. The year-on-year fall in wealth revenues was mainly caused by lower net interest revenue.

Wealth management client assets stood at $265 billion at the end of Q3, against $259 billion a year before. Assets under management across the whole wealth and asset management segment stood at $2.041 trillion, from $1.881 trillion.

Northern Trust 
The US firm logged a year-on-year slip in net income of $294.5 million for the third quarter, against $384.6 million. The latest results included a $43.4 million pre-tax charge related to a corporate action processing error. Custody and administration and assets under management performed well, ending the quarter at $13.1 trillion, rising by 13 per cent and $1.3 trillion, up by 9 per cent from the prior year, respectively. Corporate and investment services, trust, investment and other servicing fees rose by 4 per cent year-on-year to $584.9 million, Northern Trust said. Wealth management fees, including work with family offices, rose by 1 per cent over the 12-month period to $418.9 million. Within family offices, fees were $72.2 million, up by 6 per cent. Wealth management trust, investment and other servicing fees increased compared with the prior-year quarter, primarily due to favorable markets, partially offset by higher money market mutual fund waivers, it added.

BlackRock
Net income stood at $1.364 billion in Q3, rising by 22 per cent on the same quarter of 2019. Earnings per share on a diluted basis were $8.87, up by 24 per cent. Revenue rose by 18 per cent to $4.369 billion. Total assets under management stood at $7.808 trillion, rising by 12 per cent on a year earlier. Total net flows were $128.7 billion, rising from $84.246 billion.

UBS
The global wealth management arm clocked up pre-tax profit of $1.057 billion in the three months to the end of September, rising by 18 per cent year-on-year, and earning record Q3 pre-tax profit in Asia and the Americas. GWM’s results were driven by lending growth and higher transaction-based income, while costs fell. Operating income grew by 3 per cent on continued high levels of client activity and greater market volatility, causing a 16 per cent rise in transaction-based income. Net interest income slipped by 2 per cent, however, as further pressure from lower dollar interest rates was mostly offset by higher revenues from lending. Recurring net fee income also reduced marginally, with shifts in invested assets into lower-margin funds and advisory mandates. 

Invested assets rose to an all-time high of $2,754 trillion. Net new money was $1.4 billion, with tax-related outflows in the US of $5.5 billion.

Credit Suisse
Within the international wealth management business, adjusted net revenue fell by 12 per cent year-on-year in the third quarter to SFr1.42 billion; pre-tax income fell by 30 per cent on a year to SFr268 million. At the Suisse Universal Bank, adjusted pre-tax income was flat on the quarter, at SFr471 million; net revenue inched higher by 1 per cent reaching SFr1.294 billion. In Asia-Pacific, adjusted pre-tax income rose by 4 per cent, at SFr179 million and net revenues rose by 7 per cent, at SFr728 million.

Julius Baer
Assets under management stood at SFr413 billion at the end of September 2020, an increase of 3 per cent since the end of June 2020, as the stock market recovery that started in March 2020 continued into the third quarter of 2020. Since the end of 2019, AuM was down by 3 per cent. Net new money inflows rose considerably in the third quarter of 2020, resulting in an annualized growth rate of close to 4 per cent for the first nine months of 2020 (compared with 2.3 per cent for the first half of 2020 and 2.8 per cent for the full year 2019).

After an exceptional increase in market volatility and trading volumes had driven the gross margin to a very high level in the first four months of 2020, it fell back towards a more sustainable level in May-June 2020. In the third quarter of 2020, the gross margin remained at close to the level of those two months, with an essentially unchanged contribution from client-activity-driven income and a slightly lower contribution from net interest income, as loans grew less than AuM. As a result, the gross margin in the first nine months of 2020 was just over 89 basis points (bps). This compares with 92 bps in the first half of 2020 and 82 bps for the full year 2019.

Deutsche Bank
Private bank net revenues stood at €2.0 billion in the third quarter, holding steady on the same period a year earlier. There was a pre-tax loss of €4.0 million in this business division, versus a profit of €121 million a year earlier. On an adjusted basis, however, Deutsche Bank logged a pre-tax profit of €180 million, rising by 55 per cent. Growth in volumes at the private bank, including net inflows in investment products of €3 billion and €5 billion in net new client loans, respectively, offset the impact of COVID-19 and low interest rates.

As a result, in the first nine months, net new client loans rose to €9 billion and net inflows of investment products to €12 billion. Net revenues in the Private Bank Germany rose by 1 per cent year-on-year, while the international private bank’s net revenues declined by 2 per cent, or 1 per cent when specific items were stripped out. Private bank assets under management rose by €5 billion in the quarter, driven by net inflows of €5 billion and market appreciation, partially offset by the negative impact of currency translation effects. Net inflows in investment products were €3 billion.

ABN AMRO
The bank said its third-quarter 2020 net profit was €301 million, bouncing back from a net loss of €5 million a year earlier; the progress was assisted by lower impairments (€270 million) and a book gain from the sale of a large office building in Paris, partly offset by costs incurred from winding down its corporate and investment bank non-core portfolio. The bank, which has had some compliance issues, said “we are making progress on our AML remediation programmes.” Some 3,400 full-time-equivalent are “fully committed” to these efforts.

The Common Equity Tier ratio stood at 17.2 per cent, as defined under Basel III capital adequacy standards. Within its private banking arm, ABN AMRO logged a pre-tax profit of €324 million, surging from €63 million a year ago and up from €38 million in the second quarter. Operating income rose by 88 per cent year-on-year to €556 million; operating costs rose by 4 per cent, to €231 million in Q3. 

The bank said that net fee and commission income had risen rose since Q2 2020, largely as a result of higher asset management fees as stock markets showed recovery in Q2 2020. Some of that effect was offset by fewer client transactions. Net new assets amounted to €1.2 billion this quarter, largely due to custody inflow in the Netherlands. The cost/income ratio was 41.6 per cent in Q3, narrowing sharply from 75.5 per cent a year ago.

BNP Paribas
Insurance, wealth and asset management businesses had “very good net asset inflows.” Assets under management came to €1.11 trillion as of September 30, 2020, 1.2 per cent lower than at December 31, 2019, due to an “unfavorable valuation impact” of €25 billion caused by the slide in the financial markets in the first quarter 2020, mitigated partly by the rebound in the second and third quarters, but also to an unfavorable exchange rate impact of €17.4 billion.

Net asset inflows were solid, at €30.4 billion in the first nine months of 2020, driven by wealth management’s good asset inflows in Europe and Asia, asset management’s “very strong” net asset inflows in both money-market and medium and long-term vehicles, and insurance’s slightly negative decline overall. 

For the banking group as a whole, its net income attributable to equity holders totaled €1.894 billion, slipping by 2.3 per cent compared with the third quarter 2019. When excluding exceptional items, it came to €1.940 billion euros, down by 8.3 per cent. 

Societe Generale
Reported net income stood at €862 million, inching up by 0.9 per cent from a year ago; operating income fell by 1.56 per cent to €1.466 billion. Operating costs fell by 8.2 per cent to €3.825 billion.  The bank had a Common Equity Tier 1 capital ratio of 13.1 per cent at the end of September. Private banking net banking income fell by 7.3 per cent year-on-year to €153 million. Assets under management held steady at €114 billion; net inflows were €1.8 billion in the first nine months of this year, driven by its French business.

HSBC
The wealth and personal banking arm, the recently reconfigured division that includes private banking, logged a sharp fall in adjusted pre-tax profit for the nine months to September 30, at $3.121 billion, from $6.798 billion a year ago.  For the three months to end-September, wealth and personal banking adjusted pre-tax profit did not drop as severely, however – down to $1.426 billion, falling from $1.973 billion.

Across the entire banking group, adjusted pre-tax profit for the nine-month period was $9.939 billion, falling from $17.693 billion. The main cause of the decline was lower revenue. The banking group said its third-quarter figures included its share of an impairment of goodwill by its associate, The Saudi British Bank, of $500 million. On an adjusted basis, pre-tax profit in Q3 fell by 21 per cent year-on-year to $4.3 billion.

Barclays
The UK bank logged an attributable profit of £1.31 billion in the first nine months of this year, down by 27 per cent from a year before. Pre-tax profit fell by 26 per cent year-on-year to £2.419 billion. Total income rose by 3 per cent to £16.825 billion. The cost/income ratio was 60 per cent, narrowing from 72 per cent. The bank had a Common Equity Tier 1 capital ratio of 14.6 per cent at the end of September. (The bank does not disclose results for its wealth and investment arm.)

Standard Chartered
The bank said that its profit attributable to ordinary shareholders, on an underlying basis, has fallen by 50 per cent to $428 million for the third-quarter, while its pre-tax profit fell by 40 per cent to $745 million. On a statutory basis, attributable profit slumped by 80 per cent to $123 million. The bank’s cost/income ratios widened to 71.7 per cent to 64.8 per cent. Its Common Equity Tier 1 ratio stood at 14.4 per cent, widening from 13.5 per cent. 

Explaining its pre-tax profit slump, Standard Chartered said charges relating to goodwill impairment, restructuring and other items increased by $177 million to $310 million, primarily relating to $231 million of goodwill impairment in UAE ($204 million) and Indonesia ($27 million) due to a lower GDP growth outlook, and a $35 million dilution loss relating to the initial public offering of the Group’s associate, China Bohai Bank. Private banking pre-tax profit was $17 million, against a $3 million loss a year earlier, and $73 million for the first nine months of this year.

Royal Bank of Scotland (renamed as Natwest)
The private banking arm reported an operating profit in the third quarter of £57 million, down from £81 million a year earlier, but rising from £35 million at the end of June this year. Part of the shift in profit for the private banking businesses, operating under the Coutts and Adam & Co names, was caused by the rise in impairment losses in Q3 to £18 million against a net release figure of £2 million for the same period 12 months ago. The group logged about £1.0 billion of new investment inflows during the quarter, while lending rose by 9 per cent to £1.3 billion. Total income in Q3 was £187 million, down from £198 million a year earlier. The cost/income ratio held steady at 59.9 per cent in Q3, from 60.1 per cent at the end of September 2019. Total assets under administration were £30.1 billion at September 30, 2020, against £30.4 billion the previous year.

DBS
Pre-tax profit fell by 24 per cent year-on-year in the three months to 30 September 2020, reaching S$1.484 billion. For the first nine months of 2020, the profit figure fell by 27 per cent to S$4.262 billion. Allowances for credit and other losses dented the profit figures, more than doubling year-on-year in the third quarter to S$554 million. Total income, at S$3.577 billion, fell by 6 per cent on the same quarter in the previous year. DBS said that its Common Equity Tier 1 ratio was 13.9 per cent at the end of Q3, slightly higher than a year earlier.

UOB
The Singapore-based bank reported a 3 per cent quarter-on-quarter rise in operating profit for the third quarter of 2020, reaching S$1.25 billion. Net earnings for 3Q20 were S$668 million, dipping by 5 per cent on the previous quarter and sliding by 40 per cent on a year ago, hit by the bank’s build-up of credit allowances of S$339 million in the latest quarter. UOB had a Common Equity Tier 1 ratio of 14.0 per cent.

Bank of Singapore
Assets under management reached S$159 billion ($116 billion), up by 5 per cent on a year earlier. The gain was driven by higher market levels and client inflows. Wealth management fees rose to the pre-COVID-19 levels of the previous year, rising by 24 per cent on the previous quarter and rising by 4 per cent from a year earlier to S$252 million. For the OCBC group as a whole, group profit of S$1.028 billion in Q3 fell by 12 per cent on the same quarter a year earlier. Total income of S$2.539 billion fell by 4 per cent on a year ago. Parent bank OCBC had a Common Equity Tier 1 ratio of 14.4 per cent at September 30, unchanged from a year earlier.

Emirates NBD
The bank delivered a net profit of AED5.6 billion in the first nine months of 2020. Net interest income increased by 21 per cent year-on-year. Net profit declined by 55 per cent on a year ago due to higher impairment charges and the gain on disposal of a stake in Network International not repeated in 2020.