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Bank of America ranks 3rd in deal fees league despite 41% slump

During a turbulent year for investment banking, Bank of America’s dealmakers retained a competitive advantage over Wall Street rivals; yet, fees decreased by 41% from the previous year.

Photo: Bank of America Office Tower, New York. Shutterstock media

Last year, the US bank earned $3 billion from investment banking activities. This was a 41% decline, although it was not as severe as several of its competitors, like JPMorgan, whose dealmaking revenue dropped by 50% in the previous year.

Bank of America’s revenues from equities capital markets activities fell 78% to $268 million as initial public offerings and other stock listings disappeared due to unpredictable markets. Meanwhile, M&A revenue decreased 23% to $1.6 billion from 2022’s record year.

Last year, Bank of America’s total revenue grew to $95 billion, while net income declined 14% to $27.5 billion.

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Brian Moynihan, chief executive officer of Bank of America, said in a statement, “We concluded the year on a good note, with fourth-quarter earnings improving year-over-year despite a weakening economy.”

In the fourth quarter of the year, the global markets division of Bank of America saw its revenue climb by 8.5% to $16.5bn, while its fixed income division grew by 49%.

According to data provider Dealogic, Bank of America has risen from fourth to third in the investment banking fee league tables, maintaining a 6% market share.

Bank of America’s investment bank has not yet implemented layoffs, distinguishing it from its competitors who have done so in recent months. Earlier in January, Goldman Sachs announced plans to eliminate 3,200 employees, or approximately 6 percent of the workforce. Approximately 1,000 will come from its investment bank.

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After a spectacular year in 2021, when banks raked in a record $130bn, dealmaking fees have declined throughout the sector. This year, the amount has decreased 41% to $77.6 billion.

During an interview at a December financial services conference, Moynihan ruled out employee layoffs, stating that the bank had reset its recruitment and was only hiring for needed positions. He stated, “We don’t lay people off, but we have the potential to quickly restructure our headcount through turnover.”

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