Bank of America (BAC) Q3 investment banking fees to drop over 10%
Bank of America CEO Brian Moynihan announced that Q3 investment banking fees are expected to drop over 10% and trading revenue will be flat, signaling a potential slowdown after a strong Q2. This muted outlook, also echoed by Citigroup, caused Bank of America shares to fall. Moynihan noted the overall investment banking market is down 10%, with BofA potentially down more due to its positioning.
Why it matters
This indicates a potential cooling in the financial sector's 'AI-fueled' boom, impacting major banks' revenues and potentially signaling broader economic shifts in capital markets and investor sentiment.
Bank of America is seeing a far more subdued few months for its Wall Street advisory and trading businesses after a blockbuster second quarter, CEO Brian Moynihan told analysts Monday.
Investment banking fees will likely decline by more than 10% in the third quarter from the year-earlier period, while trading revenue will be roughly flat, Moynihan said at a conference . That compares to a second quarter in which the bank posted a 50% jump in investment banking fees and a 33% jump in trading revenue.
"What we're seeing is the market generally in investment banking is down 10%," Moynihan said, citing Dealogic data. "We're not as well positioned in some of the businesses that have more activity, so we'll be down probably a bit more than that."
Bank of America shares were down 5% in afternoon trading Monday following Moynihan's comments.
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