Bank of America Forecasts Q3 Investment Banking Fees to Drop by Over 10%

Bank of America (NYSE:BAC) anticipates its investment banking fees will decline by at least 10% in the third quarter, while its sales and trading revenue is expected to remain flat, CEO Brian Moynihan said Monday. The forecast, delivered at a financial services conference, prompted a sharp drop in the bank's stock.

Q3 Projections

Speaking at the Barclays global financial services conference, Moynihan projected third-quarter investment banking revenue to land between $1.6 billion and $1.8 billion. This represents a significant decrease from the $2 billion generated in the same period a year earlier.

In contrast, the CEO stated that sales and trading revenue is expected to be roughly flat compared to the $5.4 billion reported in the third quarter of 2025. Moynihan noted that the broader investment banking market is down approximately 10%, and BofA could see a slightly larger decline. "We’re down to small position in some of the businesses that had more activity, so we’ll be down probably a bit more than that," he said.

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Market Impact and Outlook

The market reacted swiftly to the guidance. Following Moynihan's remarks on Monday, shares of Bank of America fell over 5%, and the broader S&P 500 banking index declined 2.7%.

Despite the projected slowdown in fees, Moynihan said the pipeline for deals remains strong. However, he cautioned that potential interest rate hikes by the Federal Reserve could dampen demand for financing. His comments align with broad market expectations that the central bank will continue its monetary tightening in response to recent inflation data.