Banks' Q1 income from annuities dropped

Bank holding companies’ income from annuity sales plummeted in the first quarter, as the annuities lost their appeal during the stock market recovery. Commissions and fees from the sale of annuities in the first quarter fell 20.7% to $582.6, from $734.5 million a year earlier, according to the Michael White-ABIA Bank Annuity Fee Income Report, sponsored by the American Bankers Insurance Association. The data came from some 951 major top-tier bank holding companies. The decline in commissions and fees from fixed and variable annuities was particularly acute among the largest bank holding companies with more than $10 billion in assets. Among those institutions, fee income from annuities fell to $697.1 million, down 21.4% from the year-earlier period. Wells Fargo & Co. led as the bank holding company with the most annuity fee income in the first quarter, with $169 million in commissions and fees. That’s down 4.52% from a year earlier. Morgan Stanley Smith Barney LLC and JPMorgan Chase & Co. rounded out the top three, respectively, as the former reported a 122% leap in year-over-year annuity fee income — rising to $82 million. Meanwhile, JPMorgan Chase’s annuity fee income slipped by about a third to $60 million in the first quarter. “[Fees and commissions] are down because yields are very low, and the benefit between the taxable certificate of deposit and the fixed annuity has shrunken decidedly,” said Michael White, president of Michael White Associates LLC, which compiled the data for the report. “At this stage, it’s a downward trend.”