Bank of America CEO Warns Q3 Investment Banking Fees Could Fall More Than 10%, Trading Revenue Seen Flat

Bank of America CEO Brian Moynihan told analysts at a conference Monday that the bank's third-quarter investment banking fees are likely to decline by more than 10% from the year-earlier period, while trading revenue will be roughly flat, according to CNBC. Shares of the bank fell sharply following the remarks.

What Moynihan Said

Speaking at the conference, Moynihan pointed to broader industry softness rather than a company-specific problem alone. "What we're seeing is the market generally in investment banking is down 10%," he said, citing Dealogic data, according to CNBC. He added that Bank of America's own mix of businesses could make its decline steeper than the industry average: "We're not as well positioned in some of the businesses that have more activity, so we'll be down probably a bit more than that," he said, per CNBC's report.

Despite the softer near-term outlook, Moynihan pointed to a robust deal pipeline, particularly in middle-market investment banking, CNBC reported. That comment leaves open the question of whether the third-quarter slowdown is a temporary lull in deal timing or a more durable shift, a point CNBC itself raised in noting that the guidance "may make investors wonder if the industry's surge in capital markets activity will prove short-lived."

The Numbers Behind the Guidance

The new guidance stands in sharp contrast to Bank of America's second-quarter results. CNBC reported that the bank posted a 50% year-over-year jump in investment banking fees and a 33% year-over-year jump in trading revenue in the second quarter.

Based on those two reported figures, the second quarter's investment banking growth rate exceeded its trading revenue growth rate by 17 percentage points (50 minus 33), a relative gap of roughly 51.5% ((50 - 33) / 33 x 100). That arithmetic comparison, drawn directly from CNBC's reported second-quarter figures, underscores how much more the bank's advisory and underwriting business outperformed trading last quarter, before the third-quarter guidance pointed the other direction: fees now expected to fall while trading holds roughly steady.

Market Reaction

Investors reacted quickly to the comments. CNBC reported that Bank of America shares were down 5% in afternoon trading Monday following Moynihan's remarks. Seeking Alpha put the decline at 5.29%, with shares trading at $59.38 shortly before Monday's close, and noted that the stock "plunge[d]" after the CEO said sales and trading revenue would be "flat" year-over-year, part of a broader sell-off among bank stocks that day, per Seeking Alpha.

A Possible Early Signal for Wall Street

CNBC framed the guidance as evidence that Bank of America is heading into "a far more subdued few months" for its Wall Street advisory and trading businesses after a blockbuster second quarter. The outlet went further, suggesting the muted outlook from the country's second-largest bank by assets "could be an early signal that Wall Street's AI-fueled advisory and trading boom might have hit turbulence."

That framing is CNBC's interpretation rather than a claim made by Moynihan himself in the reported remarks, and readers should treat it as such. The underlying facts are narrower: one bank's CEO guided a single quarter's investment banking fees lower and its trading revenue roughly flat, while also describing a robust deal pipeline. Whether that combination reflects a temporary pause in deal timing, a broader market pullback, or something more structural is not resolved by the available reporting.

Bottom Line

Bank of America's CEO has now put a specific, if preliminary, number on the third quarter: investment banking fees down more than 10% year-over-year, with trading revenue roughly flat. That guidance follows an unusually strong second quarter, in which investment banking fees jumped 50% and trading revenue jumped 33%, according to CNBC. The stock's roughly 5% drop Monday shows investors took the comments seriously, even as Moynihan flagged a healthy pipeline, particularly in middle-market banking, that could support activity later in the year. For now, the reported facts stop with a guided quarter and a market reaction, leaving open the broader question of whether this marks a turning point for Wall Street's capital markets rebound.