The US bank has returned to the top 10 issuer ranking on the back of increased issuance and sales of structured products in 2021.

Bank of America increased its US structured product issuance to US$3.9 billion (678 products) in sales volumes during 2021, compared with US$2.5 billion (346 products) in the previous year, SRP data shows.

In the fourth quarter of 2021, the bank issued US$1.1 billion in sales across 152 products, a 130% increase from the same period of 2020 (111 products /US$478m). However, the figure dropped from the previous quarter where sales stood at US$1.4 billion (173 products).

BofA was in the top 10 list of issuer groups in Q4 21 in which Morgan Stanley led the ranks in with US$3.4 billion (857 products). Citi followed behind with US$3.1 billion (913 products), JPMorgan issued US$2.9 billion (1,390 products), and Barclays issued US$2.8 billion (567 products).

In 2021, the bank also boosted its sales of structured products tied to exchange-traded fund asset classes to US$621m from the year before (US$266m). The most dominant asset class was equities with index baskets - US$1.9 billion across 423 products, taking over single indices which accrued US$1.1 billion over 87 products.

In addition, BofA increased its issuance of products tied to MSCI Emerging Markets to total US$214m in 2021, compared with US$54.4m in 2020. Other popular underlyings included VanEck Vectors Goldminers ETF (29 products/US$109m), SPDR S&P Biotech ETF (15 products/US$145m), and iShares Global Clean Energy (12 products/US$54m).

The callable payoff also gained momentum in 2021 among BofA’s issuance with US$1.3 billion (203 products), compared with US$315m (66 products) in 2020. Other payoff types in focus included worst of option (528 products/US$2.4 billion), reverse convertible (440 products/US$2.3 billion), and autocallable (351 products/US$1.5 billion).

Business lines

In the final quarter of 2021, the bank led by Brian Moynihan (pictured) reported a net income rise of 28% to US$7 billion, reflecting a strong operating leverage as revenues grew faster than expenses, while revenue, net of interest expense, increased by 10% to US$22.1 billion.

Net interest income went up by US$1.2 billion, or 11%, to total US$11.4 billion, driven by strong deposit growth and investment of excess liquidity

Provision for credit losses improved by US$542m to a benefit of US$489m, driven by asset quality and macroeconomic improvements, partially offset by loan growth.

Global markets reported a net income of US$669m while sales and trading revenue went down by 2% to US$2.9 billion. This included net debit valuation adjustment (DVA) gains of US$2m million; fixed income currencies and commodities (FICC) revenue of US$1.6 billion and equities revenue of US$1.4 billion.

Risk-weighted assets (RWAs) stand at US$1.6 billion for the quarter, compared with US$1.5 billion in the same period of 2020.

Click in the link to view the bank’s fourth quarter earnings release.