Global Corporate Banking revenue increased to $1.6 billion in the fourth quarter, up $125 million from the year-ago quarter, and Global Commercial Banking revenue increased $117 million to $1.8 billion. Included in these results are Business Lending revenue of $1.8 billion, up $180 million from the year-ago quarter, and Treasury Services revenue of $1.5 billion, up $62 million from the year-ago period. Global Banking investment banking fees, excluding self-led deals, increased $101 million from the year-ago quarter.

Noninterest expense increased $174 million, or 10 percent, from the year-ago quarter to $1.9 billion, primarily from higher incentive compensation associated with the strong performance in investment banking.

Global Markets
  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 $ 3,624   $ 3,020 $ 16,058   $ 14,284
Total revenue, net of interest expense, FTE basis, excluding DVA 1 3,824 3,296 16,566 16,732
Provision for credit losses 104 17 140 34
Noninterest expense 3,284 2,627 12,013 11,295
Net income $ 215 $ 181 $ 1,563 $ 1,229
Net income, excluding DVA and U.K. tax 1 341 355 3,009 3,552
Return on average allocated capital, excluding DVA and U.K. tax 2, 3, 4 4.54 % 10.06 %
Return on average economic capital, excluding DVA and U.K. tax 2, 3, 4 9.98 % 25.76 %
Total average assets $ 603,110     $ 645,808     $ 632,804     $ 606,249  

1 Total revenue, net of interest expense, on an FTE basis excluding DVA and net income excluding DVA and the U.K. corporate tax rate adjustments are non-GAAP financial measures. DVA losses were $200 million and $276 million for the three months ended December 31, 2013 and 2012, and $508 million and $2.4 billion for the years ended December 31, 2013 and 2012. U.K. corporate tax rate adjustments were $1.1 billion and $0.8 billion for the years ended December 31, 2013 and 2012.

2 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.

3 Return on average allocated capital and return on average economic capital, excluding DVA and U.K. corporate tax rate adjustments, are non-GAAP financial measures. Return on average allocated capital was 5.24 percent for 2013 and return on average economic capital was 8.95 percent for 2012.

4 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.

Business Highlights
  • Sales and trading revenue, excluding DVA F, rose 19 percent from the fourth quarter of 2012 to $3.0 billion.
  • Equities sales and trading revenue, excluding DVA G, rose 27 percent from the fourth quarter of 2012, due to continued gains in market share and increased market volumes.
  • Bank of America Merrill Lynch was named "No. 1 Global Research" firm for the third consecutive year by Institutional Investor.

Financial Overview

Global Markets reported net income of $215 million in the fourth quarter of 2013, compared to $181 million in the year-ago quarter. Excluding DVA F losses, net income was $341 million in the fourth quarter of 2013, compared to $355 million in the year-ago quarter.

Global Markets revenue increased $604 million, or 20 percent, from the year-ago quarter to $3.6 billion. Excluding DVA F, revenue increased $528 million, or 16 percent, to $3.8 billion driven by strong performance in Equities in both primary and secondary markets. DVA losses were $200 million, compared to losses of $276 million in the year-ago quarter.

Fixed Income, Currency and Commodities sales and trading revenue, excluding DVA G, was $2.1 billion in the fourth quarter of 2013, an increase of $292 million, or 16 percent, from the year-ago quarter, as stronger results in credit and mortgage products more than offset weakness in rates and commodities.

Equities sales and trading revenue, excluding DVA G, was $904 million, an increase of $191 million, or 27 percent, from the year-ago quarter due to gains in market share, higher market volumes, and increased client financing balances.

Noninterest expense increased to $3.3 billion from $2.6 billion in the year-ago quarter, primarily driven by expense associated with RMBS litigation.

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