Bank of America 2014 Annual Report Download - page 115

Bank of America 2014 113
Consumer Real Estate Services
CRES recorded a net loss of $5.0 billion in 2013 compared to a
net loss of $6.3 billion in 2012 with the decrease in the net loss
primarily driven by lower provision for credit losses and lower
noninterest expense, partially offset by lower mortgage banking
income. Mortgage banking income decreased $968 million due
to both lower servicing income and lower core production revenue,
partially offset by a $3.1 billion decrease in representations and
warranties provision as 2012 included provision related to the
January 2013 settlement with FNMA. The provision for credit
losses improved $1.6 billion to a benefit of $156 million due to
improved delinquencies, increased home prices and continued
loan balance run-off. Noninterest expense decreased $1.2 billion
to $15.8 billion due to lower operating expenses in Legacy Assets
& Servicing, partially offset by higher litigation expense.
Global Wealth & Investment Management
GWIM recorded net income of $3.0 billion in 2013 compared to
$2.2 billion in 2012 with the increase driven by higher revenue
and lower provision for credit losses, partially offset by higher
noninterest expense. Revenue increased $1.3 billion primarily
driven by higher asset management fees. The provision for credit
losses decreased $210 million to $56 million driven by continued
improvement in the home equity portfolio. Noninterest expense
increased $311 million to $13.0 billion due to higher volume-driven
expenses and higher support costs, partially offset by lower other
personnel costs.
Global Banking
Global Banking recorded net income of $5.0 billion in 2013
compared to $5.3 billion in 2012 with the decrease primarily driven
by an increase in the provision for credit losses, partially offset by
higher revenue. Revenue increased $810 million to $16.5 billion
in 2013 as higher net interest income due to the impact of loan
growth, and higher investment banking fees were partially offset
by lower other income due to gains on the liquidation of certain
portfolios in 2012. The provision for credit losses increased $1.4
billion to $1.1 billion compared to a benefit of $342 million in
2012 primarily due to increased reserves as a result of commercial
loan growth. Noninterest expense remained relatively unchanged
in 2013 primarily due to lower personnel expense largely offset
by higher litigation expense.
Global Markets
Global Markets recorded net income of $1.2 billion in 2013
compared to a net loss of $2.0 billion in 2012. Excluding net DVA
and charges of $1.1 billion related to the U.K. corporate income
tax rate reduction in 2013 and $781 million in 2012, net income
decreased $548 million to $3.0 billion primarily driven by lower
FICC revenue due to a challenging trading environment, and higher
noninterest expense, partially offset by an increase in equities
revenue. Net DVA losses were $1.2 billion compared to losses of
$7.6 billion in 2012. Noninterest expense increased $711 million
to $12.0 billion due to an increase in litigation expense. Income
tax expense for both years included a charge for remeasurement
of certain deferred tax assets due to the decreases in the U.K.
corporate tax rate.
All Other
All Other recorded net income of $712 million in 2013 compared
to a net loss of $703 million in 2012 with the increase driven by
improvement in the provision for credit losses, higher equity
investment income and lower noninterest expense, partially offset
by a lower income tax benefit and lower gains on sales of debt
securities. The provision for credit losses improved $3.3 billion to
a benefit of $666 million in 2013 primarily driven by continued
improvement in portfolio trends including increased home prices
in the residential mortgage portfolio. Noninterest expense
decreased $2.0 billion to $4.6 billion primarily due to lower
litigation expense. The income tax benefit was $2.0 billion in 2013
compared to a benefit of $4.2 billion in 2012. The decrease was
driven by the decline in the pretax loss in All Other and lower tax
benefits as 2012 included a $1.7 billion tax benefit attributable
to the excess of foreign tax credits recognized in the U.S. upon
repatriation of the earnings of certain subsidiaries over the related
U.S. tax liability.