Two recent studies show that banks are selling more mutual funds and boosting profits from investment services.
During the first half banks earned $1.67 billion in fee income from investment sales and management, according to Bank Insurance Market Research Group, Mamaroneck, N.Y. That is up 31% from the first half of 1996, and up 92% from the first half of 1995.
The firm studied data from approximately 2,500 banks and thrifts that sell long-term mutual funds and annuities, including proprietary products.
The fee income figure includes earnings from managing investments, sales commissions and trailing fees, and income from leasing arrangements with third-party marketers.
Gross sales of mutual funds and annuities rose 18%, to $43.3 billion of assets, during the same period, the study found.
Figures from another recent study confirm that bank fund sales are on the rise.
The survey of 20 financial services companies found that revenue from retail investment services rose 10% in the third quarter. Mutual fund sales at the banks accounted for 38% of investment revenue, up from 36% in the prior quarter, and 33% in the third quarter of 1996.
The study, commissioned by the Bank Securities Association, Wayne, N.J., and conducted by Kenneth Kehrer & Associates, Princeton, N.J., did not provide dollar figures.
It also found that sales of bank proprietary funds through bank- affiliated brokerages slipped to 13% of all fund sales in the third quarter, down from 14% in the second quarter, and 18% in the third quarter of 1996.
Heywood Sloane, managing director of the Bank Securities Association, called the decline "marginal," and emphasized that in absolute terms, "proprietary fund sales are going up, because all sales are going up."