BofA’s Investment Banking Revenue to Plummet 25% as Trump Policies Chill Dealmaking
When dealmakers get cold feet, banks feel the chill in their wallets. Bank of AmericaBAC CEO Brian Moynihan said investment banking fees will drop about 25% in Q2. The decline would mark one of the weakest quarters since 2023, with President Trump’s trade policy announcements creating uncertainty in the merger market. Additionally, while consumer spending patterns remain robust with strong credit quality, small and mid-market businesses are showing more vulnerability to tariff-related uncertainty than individual customers.
- The projected $1.2B in quarterly revenue falls well short of the $1.5B analysts were banking on, representing a sharper decline than Wall Street had anticipated.
- However, there is a silver lining — BofA’s trading division is expected to notch its 13th consecutive quarter of growth with mid-to-high single-digit percentage gains.
Dealing the cards: While trading teams are benefiting from market swings, investment banking has slowed as companies hold off on big deals, waiting for clearer policy signals. Still, bank leaders remain hopeful. Morgan Stanley’s CEO, Ted Pick, sees a strong end to the quarter, and Citigroup’s Vis Raghavan foresees gains in both banking and trading. BofA’s Moynihan admitted the climate is tough but said he’s had “great conversations” with potential clients and is optimistic about what’s ahead.