BofA’s wealth business sees Q3 profit rise

NEW YORK (BestGrowthStock) – Bank of America Merrill Lynch’s global wealth management business saw a 33.8 percent rise in quarterly net income, boosted by lower credit costs and higher noninterest income.

The Bank of America Corp (BAC.N: ) unit posted earnings of $313 million for the third quarter, up from $234 million a year earlier. Revenue rose $200 million to $4.1 billion, as higher asset management fees helped offset lower brokerage income.

“They are kind of the beta in the story, you know, they just keep chugging along … and unless they do something fundamentally wrong to undermine a great portion of their adviser or client base, they’ll continue to do respectably,” said Scott Smith, a research analyst at Cerulli Associates.

“They’re not going to knock the cover off the ball, but I don’t think they’re going to be losing money either.”

The unit includes the Merrill Lynch wealth management brand and the U.S. Trust private banking unit, as well as Bank of America’s investment in BlackRock Inc (BLK.N: ). The year-earlier results include the bank’s Columbia Management long-term asset management business, which was sold on May 1.

Assets under management fell 15.6 percent to $624.2 billion. A year earlier, they were bolstered by the contribution of Columbia Management.

Part of the old Merrill Lynch business — which Bank of America bought in September 2008 — is also wrapped into Bank of America’s global banking and markets unit.

The bank said net income for that unit fell 35 percent to $1.45 billion, due to lower revenues and higher noninterest and income tax expenses, which were partially offset by lower credit costs.

Revenue in the unit fell 7 percent to $7.18 billion on lower sales and trading revenues.

Merrill Lynch added 361 new advisers from a year earlier, bringing its total adviser force to 15,340 at the end of the quarter.

U.S. Trust lost 23 client-facing professionals, bringing its advisory staff to 2,178.

Advisers generated more revenue compared to a year earlier, averaging $851,000 each during the third quarter compared with $837,000. In the second quarter, however, revenue per adviser was at $853,000.

Bank of America, the largest U.S. bank by assets, reported better-than-expected operating earnings on Tuesday on declining credit losses, but faced new questions about whether it will have to buy back troubled mortgages from investors.

(Reporting by Clare Baldwin in New York, additional reporting by John McCrank in Ottawa, editing by Gerald E. McCormick)

BofA’s wealth business sees Q3 profit rise