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.
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 bank is the country's second-largest by assets, and the outlook signals potential 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. The specific drivers of the decline—fewer transactions, pricing pressure, weaker issuance, or a shift in the mix of deals—remain unclear.
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.
Bank of America's third-quarter results will provide the final investment-banking fee result, the bank's explanation for the shortfall and whether its outlook changes for the remainder of the year.
Bank of America expects third-quarter investment banking fees to fall more than 10%, and BAC shares slid.
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 · 5 reports · 3 publishers in this record · latest listed: Investing.com · TUE, SEP 15 · 11:49 AM ETHow this is decided →
- Investing.com — Bank of America CEO sees at least 10% drop in Q3 investment banking fees
- Yahoo Finance UK — Bank of America leads financial services stocks lower on weak Wall Street fee forecast
- Yahoo Finance — Bank of America Warns of 10%+ Drop in Q3 Investment Banking Fees
- Investing.com — Big U.S. bank shares fall after Bank of America outlook
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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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