The MSR asset was $5.7 billion at December 31, 2012, up $629 million from September 30, 2012, due in part to the previously described MSR valuation adjustment related to MSR sales.

Global Wealth and Investment Management (GWIM)
    Three Months Ended   Year Ended
(Dollars in millions)     December 31 2012   December 312011   December 31 2012   December 312011
Total revenue, net of interest expense, FTE basis $ 4,194   $ 3,943 $ 16,517   $ 16,495
Provision for credit losses 112 118 266 398
Noninterest expense 3,195 3,392 12,755 13,383
Net income $ 578 $ 272 $ 2,223 $ 1,718
Return on average equity 12.43 % 6.22 % 12.53 % 9.90 %
Return on average economic capital 1 28.46 16.02 30.52 25.46
Average loans and leases $ 103,785 $ 97,722 $ 100,456 $ 96,974
Average deposits 249,658 237,098 242,384 241,535
 
(Dollars in billions)

At December 31, 2012
 

At December 31,2011
Assets under management $ 698.1 $ 635.6
Total client balances 2             2,166.7     2,030.5  

1 Return on average economic capital is a non-GAAP financial measure. For reconciliation to GAAP financial measures, refer to pages 25-28 of this press release.

2 Total client balances are defined as assets under management, assets in custody, client brokerage assets, client deposits and loans.

Business Highlights
  • Record net income of $578 million for the quarter and $2.2 billion for the year, up 29 percent from full-year 2011.
  • Record asset management fees of $1.6 billion for the quarter and $6.1 billion for the year.
  • Client activity was strong in 2012. For the full year, period-end deposit balances increased $25.6 billion, up 11 percent from the year-ago quarter to a record $266.2 billion; period-end loan balances grew $7.3 billion, or 7 percent, to a record $105.9 billion; and long-term AUM flows were $26.4 billion for the year. Fourth-quarter 2012 long-term AUM flows of $9.1 billion were the 14th consecutive quarter of positive flows.

Financial Overview

Global Wealth and Investment Management net income rose $306 million from the fourth quarter of 2011 to $578 million due to higher revenue and lower noninterest expense. Revenue increased 6 percent to $4.2 billion, driven by higher asset management fees due to higher market levels and long-term AUM flows, as well as higher brokerage transactional revenue. The pretax margin was 21 percent for both the fourth quarter of 2012 and full-year 2012, up from 11 percent in the year-ago quarter and 16 percent for the full-year 2011.

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