Global Commercial Banking
(Dollars in millions) Q1 2010 Q1 2009
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Total revenue, net of interest
expense, FTE basis $3,007 $2,683
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Provision for credit losses 916 1,765
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Noninterest expense 954 961
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Net income (loss) 713 (30)
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Efficiency ratio, FTE basis 31.71% 35.77%
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Return on average equity 6.82 n/m
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Average loans and leases $211,683 $235,386
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Average deposits 143,357 118,489
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n/m = not meaningful
Global Commercial Banking returned to profitability, recording net income of $713 million, driven by lower credit costs and increased revenues.
Net revenue rose as improved loan spreads on new, renewed and amended facilities drove an increase in net interest income. The increase was partially offset by reduced loan balances. Net revenue also benefited from strong deposit growth, as clients remain very liquid, partially offset by narrower spreads on deposits and lower treasury services transaction volumes that reflect current economic conditions.
The provision for credit losses decreased to $916 million on lower credit costs in the retail dealer-related portfolio and stabilization across most commercial portfolios.
Average loan balances decreased $23.7 billion as loan demand remained weak. Average deposit balances continued to grow, increasing $24.9 billion as clients sought to increase liquidity.
Note: Global Commercial Banking clients include middle-market and business banking companies, commercial real estate firms and governments and are generally defined as companies with sales up to $2 billion. Lending products and services include commercial loans and commitment facilities, real estate lending, asset-based lending and indirect consumer loans. Treasury solutions include treasury management, foreign exchange and short-term investing options.
Global Banking and Markets
(Dollars in millions) Q1 2010 Q1 2009
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Total revenue, net of interest
expense, FTE basis $9,776 $8,981
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Provision for credit losses 256 347
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Noninterest expense 4,386 4,724
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Net income 3,218 2,509
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Efficiency ratio, FTE basis 44.86% 52.60%
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Return on average equity 23.64 22.05
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Total average assets $782,415 $836,939
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Global Banking and Markets net income increased $709 million to $3.2 billion, driven by record performance in sales and trading. Revenue increased by $795 million as market conditions improved and the impact of writedowns on legacy assets decreased from a year earlier. Noninterest expense declined $338 million due to merger efficiencies and the shift in compensation that delivers a greater portion of incentive pay over time.
Fixed Income, Currency and Commodities revenue of $5.8 billion was primarily driven by sales and trading revenues. Revenue rose on improved market conditions, increased liquidity, tighter credit spreads and the reduced impact of writedowns on legacy assets.
Equities revenue rose to $1.7 billion primarily driven by sales and trading revenues of $1.5 billion. Higher revenue was driven by effective market positioning and related equity derivative trading gains.
Corporate and Investment Banking revenue of $2.3 billion included corporate banking revenue of $1.6 billion. Corporate banking revenue was flat year over year, as higher credit related revenue was offset by lower treasury services revenue. Investment banking revenue, which rose 18 percent to $1.2 billion, was shared between the subsegments of Global Banking and Markets. The increase reflected the strength of the Bank of America Merrill Lynch platform and was driven by debt and equity issuances.
Note: Global Banking and Markets includes the results of the Fixed Income, Currency and Commodities, Equities, and Corporate and Investment Banking businesses and the core banking products to large corporate clients that are defined as having sales in excess of $2 billion, as well as the results related to the Merchant Services joint venture.
Global Wealth and Investment Management
(Dollars in millions) Q1 2010 Q1 2009
Total revenue, net of interest $4,409 $4,346
expense, FTE basis
Provision for credit losses 242 254
Noninterest expense 3,374 3,322
Net income 497 479
Efficiency ratio, FTE basis 76.52% 76.45%
Return on average equity 8.83 11.10
Average loans $99,063 $110,535
Average deposits 224,514 250,913
(in billions) At 3/31/10 At 3/31/09
Assets under management $750.7 $697.3
Total net client assets(1) $2,183.2 $1,987.4
(1)Client assets are defined as assets under management, client
brokerage assets, other assets in custody and client deposits
Global Wealth and Investment Management net income rose to $497 million, driven mainly by higher investment and brokerage activity. Net revenue increased to $4.4 billion on the absence of support for certain cash funds and higher investment and brokerage service income, partially offset by lower net interest income.
Merrill Lynch Global Wealth Management net revenue declined $202 million to $3.1 billion from a year earlier, mainly due to the impact of the migration of certain deposits and loan balances to the Deposits and Home Loans and Insurance businesses and lower residual net interest income. These impacts to net interest income were partially offset by improvements in investment and brokerage income due to higher valuations in the equity markets and increased transactional activity.
U.S. Trust, Bank of America Private Wealth Management net revenue of $688 million was flat as higher valuations in the equity markets and increased deposit spreads were offset by net outflows and lower residual net interest income.
Columbia Management net revenue increased $127 million to $277 million, driven by the absence of support provided to certain cash funds and the impact of higher valuations in the equity markets. These were partially offset by a reduction in revenues, driven by net outflows in the cash complex.
Global Wealth and Investment Management also includes the results related to the Retirement and Philanthropic Services business and the economic ownership interest related to the company's investment in BlackRock, Inc.
All Other
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