WASHINGTON: Bank of America Corp. Chief Executive and Chairman Brian Moynihan said here the other day that the bank’s trading revenue could fall 5% to 6% in the third quarter.
Mr. Moynihan, speaking at the Barclays financial services conference, said he expected revenue from the unit that trades bonds, currencies and commodities would be down, but revenue from the smaller equities-trading unit would be up.
His statements echoed a similar prediction Wednesday by Citigroup Inc. Chief Financial Officer John Gerspach, who said his bank’s trading revenue could decline 5% in the third quarter. Mr. Gerspach said the decline would be partly because of tough comparisons, given the strong performance in rates and currencies products in September 2014.
At Bank of America, second-quarter revenue from the trading business, excluding an accounting adjustment, fell 2%. It followed the same pattern that Mr. Moynihan predicted for the third quarter, with revenue down in fixed-income trading and up in equities trading.
Mr. Moynihan took several questions; none were about the shareholder vote next week that will determine whether he gets to keep the chairman job.
The bank has been slashing expenses for years and Mr. Moynihan vowed Thursday to continue to do so. But he also said that the bank will double down on expenses even more if interest rates don’t go up.
“Let me assure you, if the revenue environment weakens or interest rate structures don’t move up and the economy slows down, we’ll have to take out more costs,” Mr. Moynihan said.
