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Assets Revenues Wells Fargo Chase Citibank Citigroup BNY Mellon State Street Trusts 2013 Second Quarter Trust Estates A.M. Publishing Garbo Trust Revenues Continue to Grow While Assets Remain Flat

(Sept. 18, 2013 --Chicago, IL) -- Mixed performance in the second quarter among industry giants resulted in total industry assets remaining flat while total industry revenues grew by 7 percent, as compared to the same period in 2012, according to Trust Performance Report’s quarterly update. TPR is a sister publication of TRN. This performance reflects results among those institutions with more than $100 billion in assets.

Among the eight institutions with over $1 trillion in assets, only Wells Fargo reported declining revenues for the first half of the year, as compared to the same period last year. However, three of these trillion-dollar institutions reported asset declines, while two reported no change in total assets. State Street, the industry leader, reported asset growth of 5 percent; while respectable, it was not sufficient to offset the declines at BNY Mellon, Chase, and Citigroup.

Asset performance among all other peer groups was strong. As a weighted average, both industry assets and revenues increased 9 percent.,

P.I.E. Boosts Assets

The industry’s giants, while reporting declines in nonmanaged asset categories, such as custody and corporate trusts, boosted P.I.E. assets by 8 percent. P.I.E. includes traditional trust accounts: personal trusts (including foundation accounts), investment management agencies, and employee benefit trusts.

The strongest asset growth reported by the largest institutions was in personal trusts and employee benefit accounts. In the latter category, these institutions reported asset declines in defined-benefit accounts, which were offset by asset gains in defined-contribution accounts. Employee-benefit account categories include defined-benefit, defined-contribution, and other accounts, primarily IRAs.

Other peer groups also reported strong asset growth in employee benefit accounts. Peer group 4 institutions, those with assets between $500 million and $1 billion, while reporting an increase in total employee benefit assets, was the only peer group to report asset declines in defined-contribution accounts.

With assets growing slower than revenues, it took only $880 in P.I.E. assets to generate $1 of revenue, compared to $890 in the first quarter. It took more than five times as much ($4,700) in non-P.I.E. assets to generate $1 of revenue, down from $5,000 in the first quarter.

Expenses Also Rising

While revenues are rising, so too are expenses, according to Fiduciary Earnings & Expenses, a sister publication of Trust Performance Report. Expenses at bank trust divisions (both trust departments and national trust companies) appear to be growing slower than at independent trust companies. In part, this may reflect banks or their holding companies subsidizing expenses of their trust division. FEE 2013 will be available in early October. For more information on FEE click here.

Trust Performance Report 2013’s annual data book (published in May) provides both industry and peer group performance data by assets, gross revenue, net income, and account category; subscribers receive quarterly updates. TPR findings are based on its annual survey of the top 1500 fiduciary institutions.

For more best practices and benchmark data see Trust Performance Report 2013. For information on ordering Click Here or the link below.

No statement in this issue is offered as or should be construed as legal opinion or advice or as an indicator of future performance.
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