Despite a decline in assets under management from a year earlier, Bank of America Corp. remains encouraged by its wealth management business.
The Charlotte, N.C., company, which reported stronger than expected second quarter earnings on Friday, highlighted increased referrals and strong organic growth from its wealth businesses.
Overall, the company earned $3.1 billion, or 27 cents per share, in the second quarter, as improving credit trends helped it beat expectations by a nickel, according to Thomson Reuters. The profits were down 3.1% from a year earlier.
"Our quarterly results show that we are making progress on our strategy to align around our three core customer groups -- consumers, businesses, and institutional investors," Bank of America CEO Brian Moynihan said in a press release.
Due to poor market conditions, assets under management fell 14.5% from a year earlier and 19.6% from the previous quarter to $603.3 billion.
Despite the decline in assets, BofA said its global wealth and investment management business reported strong asset management fees during the quarter and the second-highest quarterly brokerage income since the acquisition of Merrill Lynch.
Bank of America [BAC] said that referrals between its global wealth and investment management business and its commercial and corporate businesses increased 24% from the first quarter and Bank of America Merrill Lynch remained the largest nationally in terms of net investment banking revenues with a 13% market share, according to Dealogic second-quarter 2010 league tables.
As a result of strong organic growth from Merrill Lynch Global Wealth Management, average retail deposit balances rose 3% from a year earlier to $649.6 billion.
The company remains committed to its wealth businesses. Last month, it launched Merrill Edge. The platform is designed for self-directed and mass affluent clients to manage their investments, savings, credit, banking and retirement assets through an online platform, phone and branch offices. Since it was launched, Merrill’s advisors have has followed up with 7,000 qualified contacts.