Bank holding companies’ annuity sales rose 10% in the second quarter to $640.9 million from $582.6 million the previous quarter. Year-over-year sales rose 8%, from $593.1 million in the second quarter of 2009.
However, first-half year sales of $1.22 billion were down from the first half of 2009’s $1.33 billion. “It was a horrible first quarter 2010, which is why the numbers are down,” said Michael White, president of Michael White Associates in Radnor, Pa., and author of the report.
Sponsored by American Bankers Insurance Association, the report measures annuity fee income based on data from all 7,077 commercial and FDIC-supervised banks and 930 large BHCs.
Turmoil in the Top 10 BHCs’ results suggests that there may have been as many losers as winners in the second quarter. While Wells Fargo, at No. 1 with $347 million in annuity sales, held steady at around 2% year-over-year growth, many of its competitors didn’t fare so well for a variety of reasons, White suggested. Bank of America’s annuity sales were down 42% to $79 million, but that may be a result of acquisition Merrill Lynch’s product preferences. J.P. Morgan Chase, PNC, U.S. Bancorp and Sun Trust were all down significantly, without such obvious reasons. J.P. Morgan Chase declined to comment; the others didn’t respond by press time.
Meanwhile, Morgan Stanley, Keycorp and BBVA USA Bancshares were all up significantly. Morgan Stanley was up a massive 84%, to $160 million, which White suspects is due to its acquisition of Smith Barney. Keycorp’s annuity sales were up 17% to $35 million and BBVA was up 34%, to $24 million.
Overall, White has his fingers crossed for sales growth to continue in the future. “Hopefully the trend will continue upward,” he said.