Noninterest expense decreased 6 percent from the year-ago quarter to $3.2 billion, due to lower FDIC expense and lower litigation and other related expenses, partially offset by higher revenue-related compensation. The provision for credit losses was $112 million which was relatively flat compared to $118 million in the year-ago quarter.

Client balances rose 7 percent to $2.17 trillion driven by higher market levels and net inflows, driven by client activity in long-term AUM, deposits and loans. Assets under management rose $62.5 billion from the fourth quarter of 2011 to $698.1 billion, driven by higher market levels and long-term AUM flows.

Global Banking
  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 $ 4,326   $ 4,002 $ 17,207   $ 17,312
Provision for credit losses 180 (256 ) (103 ) (1,118 )
Noninterest expense 1,946 2,136 8,308 8,884
Net income $ 1,432 $ 1,337 $ 5,725 $ 6,046
Return on average equity 12.47 % 11.51 % 12.47 % 12.76 %
Return on average economic capital 1 27.32 25.06 27.21 26.59
Average loans and leases $ 278,218 $ 276,850 $ 272,625 $ 265,568
Average deposits   268,045     240,757     249,317     237,312  

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.

Business Highlights
  • BofA Merrill was ranked No. 2 globally in investment banking fees for both the fourth quarter and the full year of 2012, according to Dealogic. Based on deal volumes for the year, BofA Merrill was ranked among the top three banks in high-yield corporate debt, leveraged loans, investment-grade corporate debt, asset-backed securities and syndicated loans. Debt issuance fees of approximately $1.1 billion during the fourth quarter of 2012 were the highest since the merger between Bank of America and Merrill Lynch.
  • Period-end loan and lease balances increased $10.1 billion, or 4 percent from the year-ago quarter, to $288.3 billion at the end of the fourth quarter of 2012, with growth in the commercial and industrial and leasing portfolios.
  • Period-end deposits rose to $269.7 billion at the end of the fourth quarter of 2012 from $246.4 billion at the end of the fourth quarter of 2011.

Financial Overview

Global Banking net income of $1.4 billion was up $95 million from the year-ago quarter, as higher revenue and a decline in noninterest expense were partially offset by an increase in provision expense. Revenue of $4.3 billion was up 8 percent from the year-ago quarter, primarily due to higher investment banking fees and net interest income.

Firmwide investment banking fees of $1.6 billion, excluding self-led deals, increased $587 million, or 58 percent from the year-ago quarter, mainly due to a 84 percent increase in debt underwriting fees, a record performance since the merger between Bank of America and Merrill Lynch. Global Banking investment banking fees, excluding self-led deals, were $842 million in the fourth quarter of 2012 compared to $629 million in the year-ago quarter. Global Corporate Banking revenue of $1.4 billion and Global Commercial Banking revenue of $2.0 billion remained relatively unchanged compared to the year-ago quarter. Business Lending revenue of $1.8 billion and Treasury Services revenue of $1.6 billion remained in line with the year-ago quarter.

If you liked this article you might like

How to Make Your Life Successful Just Like Billionaire Warren Buffett

How to Get Rich Using Warren Buffett's Favorite Stock Market Indicators

With the Fed, It's Different This Time

How to Live Just Like Billionaire Warren Buffett

Why Hurricanes Won't Force the Fed to Ditch a December Rate Hike