Bank of America expects third-quarter investment banking fees to fall more than 10%; shares slide — SkimNews
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- Bank of America CEO Brian Moynihan told analysts at a conference Monday that Q3 investment banking fees will decline more than 10% from the year-earlier period, with trading revenue expected to be roughly flat
- The projected Q3 decline reverses BofA's blockbuster Q2, which posted a 50% jump in investment banking fees and a 33% jump in trading revenue
- Moynihan cited Dealogic data showing the broader investment banking market is also down about 10%, and said BofA will likely be down "a bit more" because it is "not as well positioned in some of the businesses that have more activity"
- Bank of America shares fell 5% in afternoon trading Monday following the comments
- Despite the muted near-term outlook, Moynihan pointed to a robust deal pipeline, particularly in middle-market investment banking
- The warning may be an early signal that Wall Street's AI-fueled advisory and trading boom has hit turbulence, testing whether the industry's capital markets surge will prove short-lived
Why it matters: BofA's 5% share drop shows investors are repricing the durability of the Q2 capital markets boom after the country's second-largest bank by assets flagged a double-digit fee decline ahead. If BofA — coming off a 50% Q2 fee surge — is already guiding down more than 10%, peers riding the same cycle face comparable revision risk and the post-pandemic advisory recovery narrative weakens.
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