Story
Bank of America Projects 10% Drop in Q3 Investment Banking Fees
Summary
CEO Brian Moynihan forecasts third-quarter investment banking revenue between $1.6 billion and $1.8 billion, citing a broader market slowdown, while sales and trading results are expected to be flat.
Bank of America (NYSE: BAC) anticipates a significant decline in its investment banking fees for the third quarter, projecting revenue to fall by at least 10% compared to the same period last year. The guidance was provided by Chief Executive Officer Brian Moynihan during a presentation at the Barclays global financial services conference.
Investment Banking Outlook
Moynihan stated that the bank expects third-quarter investment banking fees to land between $1.6 billion and $1.8 billion. This is a notable decrease from the $2 billion generated in the third quarter of the prior year.
The CEO attributed the expected shortfall to challenging broader market conditions. He noted that the overall market for investment banking is down by approximately 10%, suggesting the bank's performance is in line with a wider industry trend.
AdTrading and Consumer Health
In contrast to the investment banking division, Moynihan projected that the bank's sales and trading division will deliver results that are flat compared to the previous year. This indicates resilience in its markets-facing businesses despite volatility.
Moynihan also commented on the financial state of the American consumer, describing credit quality as remaining "good." However, he pointed out that affordability has become the primary concern for consumers, a key data point for assessing future loan demand and credit performance.
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