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Bank of America’s global markets unit edged up 8% in the third quarter after a fresh push in its trading business, helping the Wall Street bank beat market expectations for the period despite an ongoing slump in dealmaking revenue.
The bank unveiled $4.4bn in revenue within its global markets unit, up by 8%, with fixed income revenue of $2.7bn rising by 6%. While this is a smaller increase than at rival Citigroup — where fixed income revenue jumped 14% during the period — its performance beats JPMorgan where market fees were down by 3%.
Bank of America is making a renewed push in its trading business under Jim DeMare, president of its global markets unit, and is gunning for a top-three position in most fixed income products. The bank is hiring traders and salespeople in a bid to gain market share, having traditionally lagged its Wall Street rivals, with Europe a particular focus, DeMare told Financial News earlier in October.
READ Bank of America aims to be a ‘top-three player’ in fresh Europe trading push
Overall net income of $7.8bn at Bank of America was ahead of analyst expectations for the third quarter.
“Our growth in revenue and earnings allowed us to continue our investments in our people and technology to drive an enhanced client experience,” said chief executive Brian Moynihan in a statement.
Investment banking fees edged up 2% in the third quarter to $1.2bn. This was down to a sharp rise in equity capital markets revenue, but fees from M&A work were down by 3% to $448m, which was nonetheless ahead of market predictions.
Bank of America ranks third globally in the investment banking fee league tables with 6.1% of the market, according to data provider Dealogic. After finishing third in Europe, the Middle East and Africa for the first time in a decade last year, it currently sits in fourth place.
Wall Street banks have taken the axe to their dealmaking teams this year as fees have remained in the doldrums. Banks have brought in $52.4bn so far this year, according to Dealogic, down by 20% on an already weak 2022. Goldman Sachs has cut around 3,300 roles this year, while Citi has stripped out 7,000 jobs in the first three quarters of 2023 and Morgan Stanley around 3,400.
Citigroup’s investment banking fees jumped 34% in the third quarter as a surge in capital markets revenue offset an ongoing slump in M&A, which declined 21%. Fees from advisory also weighed on JPMorgan’s dealmaking fees during the period, which dropped by 3% as M&A revenue slipped 10% to $767m.
To contact the author of this story with feedback or news, email Paul Clarke
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