Bank of America investment banking fees are expected to fall by more than 10% in the third quarter from a year earlier, chief executive Brian Moynihan has told analysts, while trading revenue is forecast to remain broadly flat.
The outlook marks a sharp slowdown from the bank’s performance in the previous quarter, when investment banking fees rose 50% and trading revenue increased 33%.
Moynihan said at a conference on Monday that the wider investment banking market was down by 10%, 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,” he said.
Shares in Bank of America fell by 5% in afternoon trading following the comments. The bank is the second-largest in the US by assets.
The weaker forecast could raise questions over whether the recent surge in Wall Street advisory and trading activity, fuelled in part by enthusiasm around artificial intelligence, is beginning to lose momentum.
Moynihan nevertheless pointed to a strong pipeline of deals, particularly among middle-market companies. The projected decline in investment banking fees may still prompt investors to question whether the wider increase in capital markets activity can be sustained.
