Bank of America Q3 investment banking fees to drop, CEO warns

Bank of America CEO Brian Moynihan told analysts Monday that investment banking fees are headed for a decline exceeding 10% versus the same period last year, with trading revenue expected to hold roughly even, a disclosure that dragged the bank's stock down more than 5%.

Speaking at the Barclays 24th Annual Global Financial Services Conference, Moynihan said the broader investment banking market is down about 10% based on Dealogic data, but that Bank of America would fare worse because of its positioning. He projected total investment banking fees of $1.6 billion to $1.8 billion for the quarter. Analysts had expected those fees to come in closer to $2 billion, according to Bloomberg .

"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," Moynihan said at the conference .

On trading, Moynihan said it would be "one of the better third quarters we've ever had," but that results would be roughly flat compared with a year ago, when the business posted a strong recovery from the second quarter. Within trading, equities is up in the quarter while fixed income is down, he said. A moderation in international and Asian prime brokerage balances has weighed on results, according to Bloomberg.

The third-quarter outlook marks a sharp reversal from Bank of America's second-quarter performance. In the second quarter, investment banking fees rose 50% to $2.1 billion and total sales and trading revenue surged 33% to $7.1 billion , including a 70% jump in equities trading.

Bank of America stock closed Monday at $59.47, off 5.1%, marking its worst one-day drop since April 2025. Goldman Sachs shares lost roughly 4% on the day, Morgan Stanley gave up 3.6%, and Citigroup ended down 1.9%, according to Bloomberg.

Also on Monday, Citigroup CFO Gonzalo Luchetti said his firm's investment banking revenue is on pace for low-single-digit growth this quarter, while the trading business is pointed toward mid-single-digit gains, according to CNBC .

Moynihan said other parts of the business are performing as expected. Net interest income growth remains at the upper end of the bank's 6% to 8% guidance range for 2026, and wealth management fees from its Merrill and private banking units are up 10% to 15% in the quarter. He described the broader picture as positive despite the capital markets headwinds.

"The underlying economy is good and the business is good," Moynihan said. "It's kind of this capital markets movement makes you not feel good — but it's actually a pretty good quarter."