Bank of America Forecasts Over 10% Drop in Q3 Investment Banking Fees as Trading Revenue Stagnates

Bank of America CEO Brian Moynihan testified before the Senate Banking Committee on Dec. 6, 2023, in Washington, D.C.

Win Mcnamee | Getty Images

Bank of America expects investment banking fees for the third quarter to decline by more than 10% year‑over‑year, while trading revenue is projected to remain roughly flat, Moynihan told analysts on Monday. This follows a robust second quarter, in which the bank saw a 50% surge in investment banking fees and a 33% increase in trading revenue.

“The broader investment‑banking market is down about 10%,” Moynihan said, citing Dealogic data. “Because we are not as well positioned in some of the higher‑activity businesses, we anticipate a decline that will be slightly steeper than the market average.”

Bank of America shares fell about 5% in afternoon trading after the comments. The subdued outlook from the nation’s second‑largest bank by assets may signal that the recent AI‑driven advisory and trading boom is losing momentum.

Although Moynihan highlighted a solid pipeline of deals—especially in middle‑market investment banking—the double‑digit drop in investment banking fees could raise questions among investors about the durability of the recent surge in capital‑markets activity.

Source link