Bank of America Chairman and CEO Brian Moynihan testifies during a Senate Banking Committee hearing at the Hart Senate Office Building in Washington, DC, on December 6, 2023.
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bank of america The company’s CEO Brian Moynihan told analysts on Monday that he expects the Wall Street advisory and trading business to be much weaker in the coming months after a blockbuster second quarter.
Investment banking fees will likely fall more than 10% in the third quarter from a year ago, while trading revenue will be roughly flat, Mr. Moynihan said at a news conference. This compares to the second quarter, when the bank saw investment banking fees increase by 50% and trading revenue by 33%.
“What we’re seeing is a 10% decline in the market across the investment banking industry,” Moynihan said, citing data from Dealogic. “We’re probably a little bit lower than that because we’re not that well-positioned among some of the businesses that are more active.”
Bank of America stock fell 5% in afternoon trading Monday after Moynihan’s comments.
The slowing outlook for the nation’s second-largest bank by assets could be an early sign that Wall Street’s boom in AI-powered advice and trading may be in turmoil.
Moynihan pointed to a strong deal pipeline, particularly in middle-market investment banking, but with a projected double-digit decline in investment banking, investors may wonder whether the uptick in capital markets activity in the investment banking industry will be short-lived.
From Monday onwards citygroup Chief Financial Officer Gonzalo Lucchetti told analysts that the investment banking division posted “low single-digit” revenue growth in the third quarter, while the trading division was on track for “mid-single-digit” revenue growth.
He said that number could rise further if Citigroup’s bankers and traders end the quarter on a positive note.
“September is an important month,” Lucchetti said. “The last few weeks have been very rewarding.”
