Bank of America expects third-quarter investment banking fees to fall more than 10%; shares slide
Bank of America expects third-quarter investment banking fees to fall more than 10%, sending its shares lower and raising concern that Wall Street activity tied to the AI boom is losing momentum. The warning creates a read-through risk for other banks exposed to underwriting and deal fees, but the report does not establish whether the weakness is broad or specific to Bank of America.
CNBC reported that Bank of America expects its investment banking fees in the third quarter to decline more than 10%, a forecast that weighed on the bank’s shares. The report described Bank of America as the country’s second-largest bank by assets and framed the outlook as a potential early signal of turbulence in Wall Street’s AI-driven boom.
The warning changes the near-term picture from relying on strong capital-markets activity to monitoring whether deal flow is weakening as the quarter progresses. CNBC did not provide the prior quarter’s fee figure, a dollar amount for the expected decline, or a detailed split between advisory, equity underwriting and debt underwriting.
For Bank of America, the direct mechanism is investment-banking revenue: lower fees would reduce a fee stream within the broader bank. The read-through extends to other banks with material underwriting and advisory businesses, while the AI connection matters because a slowdown in technology financing or related deal activity could affect capital-markets volumes.
The evidence is limited to the bank’s outlook as reported by CNBC. The report did not say whether management attributed the expected decline to fewer transactions, pricing pressure, weaker issuance or a shift in the mix of deals, and it did not establish that the AI boom itself has caused the shortfall.
The next evidence point is Bank of America’s third-quarter results, but CNBC did not give a reporting date. The key figures will be the final investment-banking fee result, the bank’s explanation for the shortfall and whether its outlook changes for the remainder of the year.
The fee warning moves the near-term risk to the downside for BAC, with the weakness concentrated in a key capital-markets revenue stream.
The immediate consequence is pressure on Bank of America’s fee-income outlook, while the missing detail on deal volumes and the lack of a dated earnings event keep the setup from supporting a conviction trade. FY2025 revenue was $113.1B with 6.8% YoY growth, but that older full-year figure does not resolve the current-quarter investment-banking signal.
The read weakens if third-quarter fees hold up despite the warning or if management identifies a one-off mix issue rather than broad capital-markets weakness.
CoverageSource: CNBC · Published here MON, SEP 14 · 2:39 PM ET · 3 reports · 3 publishers in this record · latest listed: Yahoo Finance UK · MON, SEP 14 · 4:32 PM ETHow this is decided →
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Bank of America’s FY2025 revenue was $113.1B with 6.8% YoY growth, providing a broader revenue base that could cushion a weaker investment-banking quarter.
The strongest bear case is the bank’s expectation that third-quarter investment-banking fees will fall more than 10%, with shares already sliding on the warning.
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