BANK of America (BOA) expects its investment banking revenue to rise by 10 to 15 per cent in the first quarter from a year earlier, joining rivals who have recently turned more optimistic.
“We have had better capital markets activity, you can see that just in the deal flow,” BOA’s chief financial officer Alastair Borthwick said on Wednesday (Mar 6).
Citigroup Jane Fraser told investors on Tuesday she expects investment banking fees to rise by a low-teens percentage in the first quarter versus the fourth quarter of 2023. And JPMorgan Chase CFO Jeremy Barnum had earlier signalled fees would climb by a percentage in the low-to-mid teens this quarter versus a year earlier.
The BOA markets division is expected to have a robust performance fuelled by equities trading in the first quarter, Borthwick said. That will translate to flat revenue growth compared with a strong quarter a year earlier.
The S&P 500 index has gained 6.9 per cent so far this quarter, led by technology stocks such as Nvidia.
Citigroup expects its market revenue to drop by 8 to 12 per cent in the first quarter compared with a strong comparable quarter in 2023, while JPMorgan expects trading revenue to decline by 5 to 10 per cent in the quarter compared to a strong quarter in the previous year.
Bank of America’s net interest income (NII) – the difference between what lenders earn on loans and pay on deposits – is expected to hit the upper range of the US$13.9 billion to US$14 billion forecast in the first quarter.
The lender’s NII decreased 5 per cent to US$13.9 billion in the fourth quarter as it paid more for customer deposits.
Profit at the second-largest US bank shrank in the fourth quarter, hurt by US$3.7 billion in one-off charges and a slide in interest income as it paid more to hold on to customer deposits. REUTERS
