BofA Bond, Stock Trading Revenue Said to Decline This Year

  • Fixed-income trading said to drop 10% from a year earlier
  • Revenue from equity trading said to slump 11% to 12%

Bank of America Corp. has generated less revenue from its equity and fixed-income trading businesses so far this year than in the same period of 2015, according to people with knowledge of the matter.

The second-largest U.S. lender’s revenue from fixed-income trading, which includes credit, currencies and commodities, dropped about 10 percent from a year earlier, the people said, asking not to be identified discussing the firm’s performance. The bank has collected 11 percent to 12 percent less from equity trading this quarter than last year, one of the people said.

This year’s global market turmoil, including the worst start ever for U.S. stocks, is hampering banks’ profit outlook and adding pressure to pare operations. Investment banks were already struggling to overhaul fixed-income units amid stiffer capital rules and a trading slump.

Revenue from equities sales and trading was $1.15 billion in the first quarter of 2015, excluding accounting adjustments, while fixed-income products totaled $2.76 billion, according to a Jan. 19 regulatory filing. The bank generated $882 million from trading stocks and $1.76 billion from fixed-income in the fourth quarter, the filing shows. Annual trading revenue has fallen every year since 2012.

Selena Morris, a spokeswoman for the Charlotte, North Carolina-based lender, declined to comment.

Job Cuts

Daniel Pinto, JPMorgan Chase & Co.’s investment-banking head, said Feb. 23 that equity and fixed-income sales and trading revenue had tumbled about 20 percent so far this year. Pinto also said that investment-banking fees could slump 25 percent this quarter.

Bank of America plans to cut about 150 trading and investment-banking employees on March 8, other people with knowledge of the matter said Thursday. The dismissals stem from Chief Operating Officer Thomas Montag’s push to reduce expenses and are part of the firm’s periodic cull of low performers, the people said.

The lender’s shares have slid 19 percent this year, the worst performance in the 24-company KBW Bank Index, which is down 10 percent.

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