Issuance and sales of structured notes have helped the US bank deliver strong advisory and asset management results.

Bank of America issued a total of 173 structured products worth US$1.4 billion in the third quarter of 2021, according to SRP data. The figure represents a 97.3% increase from the same quarter a year prior, as well as a 122% increase from the previous quarter.

As an issuer group, Bank of America’s issuance has steadily gained traction over the past year before stagnating with 106 products being churned out in Q3 20. This number increased to 187 by the beginning of 2021 and subsequently dropped to 166 and 173 products in Q2 21 and Q3 21, respectively.

SRP data shows that Bank of America has entered the top 10 rankings as an issuer group during Q3 21, in seventh position ahead of other leading manufacturers in the US market such as Credit Suisse, Royal Bank of Canada and HSBC.

The US bank has also doubled its issuance of structured products tied to exchange-traded fund (ETF) asset classes with 23 products worth US$201m in Q3 21, compared 10 products valued at US$90.7m in Q3 20.

During the third quarter of 2021, the best-selling BofA structured tied to an ETF asset class was the Trigger Callable Contingent Yield Notes - Worst of Option (09710E473). Selling for US$27.83m, this income note tracks the iShares MSCI EAFE ETF, SPDR S&P 500 ETF Trust, iShares Russell 2000 ETF.

The product offers a quarterly coupon of 8.05% pa if each underlying is greater than or equal to 70% of its respective initial level on the observation date. The issuer may terminate the product on any quarterly observation date for a pay out of 100% plus the coupon.

The bank has also introduced seven structured notes tied to interest rates worth US$62m in Q3 21. The best-selling product for the period is the Issuer Callable Daily Range Accrual Notes - 2Y USD ICE Swap Rate (09709T5Y3).

Selling for US$15m, this income note has a 20-year investment term and tracks the 2Y USD ICE Swap Rate. The product offers a quarterly coupon of four percent pa prorated for the number of days that the level is at or above three percent during the observation period.

Business lines

For the quarter ended September 30, 2021, the bank led by Brian Moynihan (pictured) reported net income rises of 58% to total US$7.7 billion while revenue, net of interest expense, increased by 12% to stand at US$22.8 billion.

Provision for credit losses improved by US$2 billion to a benefit of US$624m, reflecting a reserve release of US$1.1 billion. This was primarily driven by asset quality improvements during the third quarter.

Net interest income has also increased by 10% or US$1 billion to value US$11.1 billion while noninterest income rose by 14% to total US$11.7 billion in Q3 21.

Noninterest expenses remain stagnant at US$14.4 billion as higher revenue-related expenses were mostly offset by lower litigation expenses and decreased Covid-related costs.

Click to view the bank’s third quarter earnings release.