Global Wealth and Investment Management (GWIM)

  Three Months Ended   Year Ended
(Dollars in millions) December 31 2013   December 312012   December 31 2013   December 312012
Total revenue, net of interest expense, FTE basis $ 4,480   $ 4,193 $ 17,790   $ 16,518
Provision for credit losses 26 112 56 266
Noninterest expense 3,264 3,196 13,038 12,721
Net income $ 777 $ 576 $ 2,974 $ 2,245
Return on average allocated capital 1, 2 30.97 % % 29.90 % %
Return on average economic capital 1, 2 28.36 30.80
Average loans and leases $ 115,546 $ 103,785 $ 111,023 $ 100,456
Average deposits 240,395 249,658 242,161 242,384
At period-end (dollars in billions)
Assets under management $ 821.4 $ 698.1
Total client balances 3         2,366.4     2,151.6  

1 Effective January 1, 2013, the company revised, on a prospective basis, its methodology for allocating capital to the business segments. In connection with this change in methodology, the company updated the applicable terminology to allocated capital from economic capital as reported in prior periods. For reconciliation of allocated capital, refer to pages 23-25 of this press release.

2 Return on average allocated capital and return on average economic capital are non-GAAP financial measures. The company believes the use of these non-GAAP financial measures provides additional clarity in assessing the results of the segments. Other companies may define or calculate these measures differently. For reconciliation to GAAP financial measures, refer to pages 23-25 of this press release.

3 Total client balances are defined as assets under management, assets in custody, client brokerage assets, client deposits and loans (including margin receivables).

Business Highlights
  • Pretax margin increased to 26.6 percent from 21.1 percent in the year-ago quarter.
  • Asset management fees grew to $1.8 billion, up 15 percent from the year-ago quarter.
  • Client balances increased 10 percent to a record $2.37 trillion, driven by higher market levels and net inflows.
  • Period-end loan balances increased to a record $115.8 billion, up 9 percent from the year-ago quarter.
  • Fourth-quarter 2013 long-term AUM flows of $9.4 billion were the 18th consecutive quarter of positive flows. For the full year, long-term AUM flows were a record $47.8 billion, up $21.4 billion or 81 percent from a year ago.
  • Return on average allocated capital increased to 30.97 percent in the fourth quarter of 2013 from 28.68 percent in the third quarter of 2013.

Financial Overview

Global Wealth and Investment Management reported strong results across many measures in the fourth quarter of 2013 with record net income, record asset management fees and strong client flows. Net income rose 35 percent from the fourth quarter of 2012 to a record $777 million, reflecting strong revenue performance and low credit costs.

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