Bank of America expects M&A fees to fall again as bond trading supports investment banks

However, the outlook for M&A remains challenging. Commissions on equity trading decreased from $232 million in the third quarter of 2023 to $199 million in the fourth quarter. The investment bank is supported by debt capital markets fees, which also fell 13% to $389 million in advisory fees, which rose 3% to $589 million.

CEO Brian Moynihan said in a December briefing that Bank of America’s investment banking fees will be $1 billion in the fourth quarter, down from a year ago as public listings and mergers remain low. He said it is expected to decline by a single digit. In a difficult macroeconomic environment, there is a big difference between the two.

Global banking revenue came in at $5.9 billion, slightly below analysts’ expectations of $6 billion. Analysts had expected an even bigger decline in advisory business to $347 million and equity trading fees to $170 million.

Total investment banking fees across the market continued to fall last year, dropping 15% to $67.1 billion, according to data provider Dealogic. Bank of America maintained his third place in the revenue rankings and accounted for his 6.1% of the total market.

Although the bank has not yet experienced the large-scale layoffs of its Wall Street rivals, Bank of America’s workforce will fall from 216,823 at the end of 2022 to 212,985 at the end of 2023. did.

Bank of America said in its fourth-quarter results that the $210 million decrease in expenses was “primarily due to lower average headcount and lower revenue-related expenses.”

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Moynihan said in December that the firm continues to invest in key areas and has added 1,500 staff within its corporate and investment bank over five years. The bank did not have to make “massive layoffs” and the number of employees was reduced through “headcount management”.

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