Credit card services revenue and earnings remain healthy for now

Credit card servicing net revenue rose 6% to $3.9 billion and net income declined 20% to $609 million. Loan portfolio at the end of the quarter increased 4% or $4.4 billion to $150.9 billion for 3.4 million active accounts. Charge volume increased 5% or $4.1 billion to $85.4 billion and merchant processing volume increased 11% to $182.4 billion.

The provision for credit losses was $1.7 billion, an increase of $441 million, or 36%, from the prior year, due to a higher level of charge-offs and an $85 million prior-year release of the allowance for loan losses.

The net charge-off rate for the quarter was 4.37%, up from 3.57% in the prior year and 3.89% in the prior quarter. The 30-day managed delinquency rate was 3.66%, up from 3.07% in the prior year and 3.48% in the prior quarter.

Private equity loan revenues rise

Private equity loan revenues rose 10% to $1.4 billion from a year ago and net income increased 63% to $1.03 billion. Excluding Visa stake sale proceeds the net income was $72 million and revenue of $163 million.

Asset management net income declines

Asset management revenues were nearly unchanged from a year ago to $1.9 billion and net income declined 16% to $356 million.

Private banking revenue grew 17% to $655 million due to higher assets under management and increased deposit and loan balances, partially offset by lower performance and placement fees.

Institutional revenue declined 11% to $490 million due to lower performance fees, partially offset by growth in assets under management. Retail revenue declined 12% to $466 million, largely due to net equity outflows and lower market valuations for seed capital investments.

Private client services revenue grew 9% to $290 million due to higher deposit and loan balances and growth in assets under management.

Assets under supervision were $1.6 trillion, an increase of $174 billion, or 12%, from the prior year and assets under management were $1.2 trillion, up 13%, or $134 billion, from a year ago.

Treasury and securities revenue and income increases

Net revenue increased 25% to $1.9 billion and earnings rose 53% to $403 million.