Bank of America CEO Brian Moynihan reported a more subdued outlook for the bank's Wall Street advisory and trading businesses following a strong second quarter. He indicated that investment banking fees are expected to fall by over 10% compared to the same period last year, while trading revenue is projected to remain flat.
This contrasts sharply with the previous quarter, where the bank experienced a 50% increase in investment banking fees and a 33% rise in trading revenue. Moynihan noted that the overall investment banking market is down 10%, and Bank of America may be affected even more due to its positioning in less active business areas. Following these comments, Bank of America's shares fell by 5%.
The forecasted decline raises concerns among investors about the sustainability of the recent surge in capital markets activity, despite Moynihan mentioning a strong deal pipeline in middle-market investment banking