Bank of America joins rivals in predicting stronger investment banking revenue

BANK of America (BOA) expects its funding banking income to rise by 10 to fifteen per cent within the first quarter from a 12 months earlier, becoming a member of rivals who’ve not too long ago turned extra optimistic.

“We have had better capital markets activity, you can see that just in the deal flow,” BOA’s chief monetary officer Alastair Borthwick stated on Wednesday (Mar 6).

Citigroup Jane Fraser instructed traders on Tuesday she expects funding banking charges to rise by a low-teens share within the first quarter versus the fourth quarter of 2023. And JPMorgan Chase CFO Jeremy Barnum had earlier signalled charges would climb by a share within the low-to-mid teenagers this quarter versus a 12 months earlier.

The BOA markets division is predicted to have a sturdy efficiency fuelled by equities buying and selling within the first quarter, Borthwick stated. That will translate to flat income progress in contrast with a robust quarter a 12 months earlier.

The S&P 500 index has gained 6.9 per cent up to now this quarter, led by expertise shares corresponding to Nvidia.

Citigroup expects its market income to drop by 8 to 12 per cent within the first quarter in contrast with a robust comparable quarter in 2023, whereas JPMorgan expects buying and selling income to say no by 5 to 10 per cent within the quarter in comparison with a robust quarter within the earlier 12 months.

Bank of America’s web curiosity revenue (NII) – the distinction between what lenders earn on loans and pay on deposits – is predicted to hit the higher vary of the US$13.9 billion to US$14 billion forecast within the first quarter.

The lender’s NII decreased 5 per cent to US$13.9 billion within the fourth quarter because it paid extra for buyer deposits.

Profit on the second-largest US financial institution shrank within the fourth quarter, harm by US$3.7 billion in one-off fees and a slide in curiosity revenue because it paid extra to carry on to buyer deposits. REUTERS