SunTrust Bank's wealth management businesses turned in another weak quarter, according to the bank's latest financial results released on Friday.
First-quarter revenue from trust and investment management services plunged 11% to $75 million from $84 million in the same quarter a year ago. Revenue was also off from the prior quarter, falling 5%.
The year-over-year drop was due to a decline in assets under management, the bank's parent explained in the earnings release. At the end of the first quarter, the trust and investment services business had $41.7 billion in assets under management, down 5% year-over-year.
The performance of the retail brokerage unit was also disappointing. First-quarter revenue from retail investment services fell 4% to $69 million from $72 million in the same quarter last year. Revenue was also down 3% from the prior quarter.
On a positive note, the retail brokerage unit was able to increase its assets under management 5% to $10.9 billion from $10.5 billion a year ago.
The overall sluggishness of the wealth management businesses was due to challenging market conditions, which reduced assets under management and client activity, Aleem Gillani, the bank's CFO said explained during the call.
Despite the headwinds, the bank is committed to its wealth management service lines, Gillani said. "Growing our wealth management business continues to be a key strategic priority for SunTrust and we remain focused on retaining and recruiting top talent in efforts to both grow AUM and expand our client base," he said.
Overall, SunTrust earned $430 million, or 84 cents per common diluted share, in the first quarter, compared with $411 million, or 78 cents per common diluted share, in the same quarter the prior year.
"We delivered solid revenue growth this quarter as we continued to meet more client needs across each of our businesses," William H. Rogers Jr., SunTrust's chairman and CEO said.