J.P. Morgan & Co. took first place in a recently disclosed tally of bank investment product sales for the second quarter.
The New York-based company sold $559 million of long-term mutual funds and annuities in the period, more than any other bank holding company, according to an analysis of call report data by the Bank Insurance Market Research Group, Mamaroneck, N.Y.
The second-quarter data, which only recently became available, showed that Morgan was not immune to the sales slump that has dogged the mutual fund business for much of the year. Its second-quarter sales were down 23% from the $721 million it reported in the first quarter.
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But Morgan did better than the banking industry as a whole, which reported total second quarter sales of $7.16 billion, down nearly 40% from the $11.4 billion sold in the first quarter.
The next three biggest sellers of funds and annuities in the second quarter -- Wells Fargo & Co., Chase Manhattan Corp., and NationsBank Corp. -- also showed steep declines, ranging from about 25% to nearly two-thirds.
Of this group, NationsBank had the biggest decline, going from $1.2 billion of sales reported in the first quarter to $431 million in the second.
But these sales figures must be taken with a grain of salt, since some banks are still learning how to compile the sales information, which banking regulators only began asking for in the first quarter.
Likewise, the data are not terribly precise.
For example, while regulators want banks to count transfers of assets between funds as fund sales, they do not say so on their call report questionnaire. The sales data also do not adjust for withdrawals of assets from mutual funds, or distinguish between sales of proprietary funds and other companies' funds.
Nonetheless, the data make a persuasive case that mutual fund and annuity sales are a relatively small businesses for banks.
According to Bank Insurance Market Research Group, the 2,121 banks that sold mutual funds or annuities in the second quarter pulled in an average of 2.1% of their noninterest revenues from this activity. The country's 100 largest banks received an average of only 1.8%.
"I'm struck by how far banks still have to go in this area," said Andrew W. Singer, managing director of the research firm.
But some banks managed to substantially best their peers in mutual fund and annuity sales and service fees as a percentage of non-interest income.
The top performer on this front -- at least among bigger banks -- was Boatmen's National Bank of St. Louis. This institution raked in $7.7 million of mutual fund and annuity fees in the first half of this year.
The 11.8% of noninterest revenues that these fees represented was a higher percentage than that reported by any other bank with more than $10 billion of assets, according to the research group.
First Union Bank of North Carolina took second place among the larger banks, with $16.9 million of mutual fund and annuity fees making up 7.9% of its non-interest revenues. Wells Fargo's lead bank was a close third, with $44.5 million of fees accounting for 7.3% of its noninterest revenues.
Citibank had the highest fee income from mutual fund and annuity sales in the first half -- $48 million.
Wells Fargo came next, followed by BankAmerica's lead bank in California, with $43 million of fees.
