Bank of America was the number one bank brokerage again in 2008, according to the Bank Insurance Market Research Group (BIMRG). BofA brokerage posted $1,792.9 million in “investment income” in 2008—way ahead of the second-largest, Wells Fargo. (The numbers from last year do not include the BofA’s Merrill Lynch acquisition or Wells Fargo’s purchase of Wachovia Securities.)
By “investment income,” BIMRG means gross commissions from the sale and servicing of mutual funds and annuities. The sale of individual securities and separately managed accounts are not included in the sums, neither are revenues generated from bank trust departments.
Not surprisingly, BofA’s selling of funds and annuities was off by 15 percent last year compared to 2007. More than 1,800 operating banks and thrifts reported some investment income in 2008. Collectively, they accounted for $4,860.5 million in gross commissions, down from 24 percent $6,391.3 million in 2007. This marks the steepest decline in bank investment income since BIMRG began tracking this metric in 1994.
“It was a bad year for investment products at banks,” says Andrew Singer, of BIMRG “People were bailing out of the market, of course, and that showed up. Mutual funds and variable annuities plunged at bank programs, but fixed-income annuities are still doing well.”
Top Five Bank Brokerage Programs in 2008
(Dollars in millions)
| 2008 | |||||
| Investment income: | Investment | ||||
| (revenues from annuities | Bank | Income/ | |||
| & mutual funds) | Bank | State | Deposits | Deposits | |
| 1 | $1,792.9 | Bank of America, NA | NC | $754,920 | 0.24% |
| 2 | $369.0 | Wells Fargo Bank, NA | SD | $308,404 | 0.12% |
| 3 | $219.0 | JPMorgan Chase Bank | OH | $695,497 | 0.03% |
| 4 | $190.5 | U.S. Bank NA | OH | $145,018 | 0.13% |
| 5 | $140.3 | PNC Bank, NA | PA | $88,175 | 0.16% |
* Revenues (not sales) from mutual funds and annuities in millions of dollars based on analysis of FDIC and Office of Thrift Supervision data in 2008.
Source: Singer’s Annuity & Funds Report.
Bank of America (NC) was followed by Wells Fargo Bank, JPMorgan Chase Bank, U.S. Bank NA, and PNC Bank, NA. For more complete data on the top 20 banks go to http://singerpubs.com/html/databaseproducts.html.