Bank of America’s Q1 results for 2025 were released today. They weren’t great. The bank was generally behind US rivals that already announced results.
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The most conspicuous failures were in BofA’s investment bank. Its capital markets teams performed worse than JPMorgan, Morgan Stanley, or Goldman Sachs with equity capital markets (ECM) revenues falling 34% – and debt capital markets (DCM) revenues growing only 7%. In M&A, BofA had the second-worst performance of its peers (up 7%), although it managed to avoid the large fall that Goldman suffered.
Who (or what) is to blame for the BofA investment bank stutter? The bank didn’t note anything special on the fall, although it did say that its market share increased by 23 basis points (0.23%).
There may, however, be other issues at play. For example, BofA has bled managing directors (MDs): in the US, it had a net loss of 19 MDs in 2024, compared to a net loss of two at JPMorgan. Market research firm BCG Expand says MDs bring an average of $4.5m in revenue to a bank per year at a major bank such as BofA, each.
BofA has been taking action. After freezing hiring and refusing to cut bankers during COVID, it cut over 100 junior investment bankers globally in the first quarter of 2025. The previous hope had been that attrition would relieve the need for cuts. Instead, BofA said employee churn reached a low last year. Across the bank, no one left, including – it seems – investment bankers who weren’t producing.
In the first quarter. BofA’s sales & trading business also performed poorly. Although equities trading revenue grew substantially (by 18%), it was still behind all of its peers. In fixed income, currencies, and commodities (FICC) 8% revenue growth was on par with JPMorgan’s performance.
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Source: efinancialcareers.com
