Bank of America, one of the largest U.S. banks, said on Monday that it expects to do slightly better than the industry average in terms of investment banking fees for the third quarter of 2023. The bank’s chief financial officer, Alastair Borthwick, made the remarks at the Barclays Financial Services Conference.
Industry fee pool down 30%-35% year-on-year
Borthwick said that the investment banking fee pool for the industry is down 30% to 35% from a year earlier in the third quarter, reflecting a slowdown in deal activity amid market volatility and regulatory uncertainty. He attributed the decline to lower fees from mergers and acquisitions, equity capital markets, and leveraged finance.
However, he said that Bank of America will fare better than the industry average, as it has a diversified and balanced portfolio of businesses. He said that the bank expects its investment banking fees for the quarter to be around $1 billion, which is below its second-quarter result of $1.2 billion, but still higher than some analysts’ estimates.
Global markets income to rise in low single digits
Borthwick also said that the bank’s global markets business, which includes trading and sales of securities, should see its income rise in the low single digits from a year ago. He said that the bank has benefited from its strong client franchise and its focus on risk management.
He said that the bank’s trading revenues have been resilient despite lower volumes and volatility in the markets. He also said that the bank has seen strong growth in its fixed income, currencies, and commodities (FICC) business, as well as in its equities business.
Bank of America shares up slightly
Bank of America’s shares were up 0.05% at $43.76 on Monday, after Borthwick’s presentation. The bank’s stock has gained 18% year-to-date, outperforming the S&P 500 index, which has risen 15%. The bank is scheduled to report its third-quarter earnings on October 18.
