After a record first quarter, Bank of Americas brokerage units maintained much of their momentum through the first half of the year even as volatility and tax season weighed on results.
The Global Wealth and Investment Management division, which includes Merrill Lynch Wealth Management, Global Wealth and Retirement Solutions, U.S. Trust, and Bank of America Global Capital Management, broke the record net income and revenue numbers it set in the first quarter. Earnings across the divisions reached $758 million, up 37.4% year-over-year and up from $720 million last quarter. Revenue rose to $4.5 billion, up 9.9% from last years quarter and up from $4.4 billion last quarter thanks to market performance and record asset management fees of $1.7 billion, the firm said.
Results were similar for the individual segments. Merrill Lynch accounted for $3.7 billion of the total revenue for the Global Wealth division, which was an increase from $3.6 billion in the first quarter and $3.4 billion in the year-ago quarter.
Overall assets under management for the Global Wealth division were up to $2.215 trillion from $2.066 trillion in 2Q 2012, but they fell slightly from $2.231 trillion in the first quarter of this year. Incoming assets also declined after strong market performance in the first quarter helped bring in a record $18 billion. In the second quarter, increased market volatility as well as tax season reduced net new assets to $7.0 billion, the firm said.
Similarly, Merrill Lynch also saw its assets under management decline slightly from $1.812 trillion in the first quarter to $1.8 trillion in the second. At the same time, revenue per advisor leapt up to over $1 million from $971,000 in the last quarter and $895,000 in the second quarter last year. The firm said it had shed a large number of underperforming advisors in its Practice Management Development training program, which accounted for a "vast majority" of the 306-person decline in number of advisors, a spokesperson at the firm said.
Total headcount still stood at 15,759, and the firm said its experienced advisor losses to the competition were the lowest since the merger.
U.S. Trust, the division that focuses on some of the firms largest private client accounts, had its best quarter in five years as revenue rose to $740 million, up from $721 million last year. Total client balances were $351 billion in the second quarter, up 8% from last year, and headcount remained mostly steady at 2,084 client-facing professionals. The firm said it had retained 100% of its top-tier advisors in the U.S. Trust division.
Business in its global wealth business helped lift results across the firm as referrals to the Global Commercial Banking division rose 15% from last quarter and 144% from 2Q 2012. Referrals to the Global Banking and Markets division are up 16% year over year, the firm reported.
Overall, Bank of America bested analyst estimates with a 63% rise in profit, which hit $4 billion. Revenue across the firm was $22.7 billion in the second quarter, up from $22 billion.