A reserve build related to the Covid-19 pandemic hit profit at Bank of America Global Wealth and Investment Management arm in Q1 2020.
The unit reported a net income of $866m in the January-March quarter, a 17% decrease from $1.04bn in the previous year.
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Revenue at the division of $4.9bn was 2% higher than the previous year. The rise was attributed to higher asset management and brokerage fees.
Higher market valuations and positive AUM flows led to a 10% increase in asset management fees.
Brokerage revenue rose 10% as a result of higher transactional activity.
Overall client balances at the wealth division decreased to $2.6trn from $2.8trn.
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By GlobalDataMerrill Lynch brought in over 7,500 net new households in Q1 2020 while Private Bank added more than 600 net new relationships.
All three of the bank’s main units reported a fall in profit with trading remaining the only bright spot.
Net income in Global Markets jumped 65% year-on-year to $1.7bn. Revenue at the unit surged 25% to $5.22bn from $4.18bn.
At a group level, Bank of America’s profit in Q1 2020 plummeted 45% as the bank put aside $3.6bn to cover loan losses due to the Covid-19 pandemic.
The bank registered a profit of $4.01bn and revenue of $22.76bn in Q1 2020.
The comparable figures in the prior year are $7.31bn and $23bn, respectively.
Bank of America chairman and CEO Brian Moynihan said: “Our results reflect the strength of our balance sheet, the diversity of our earnings, and the resilience of our teammates to serve clients around the world. Despite increasing our loan loss reserves, we earned $4bn this quarter, maintained a significant buffer against our most stringent capital requirement, and ended the quarter with more liquidity than when we began.”
