WASHINGTON: Fourth-quarter trading revenue at Bank of America Corp.is on pace to increase from a year earlier when light activity crimped revenue and led the firms to ratchet down compensation.
Bank of America’s sales and trading revenue for 2015’s final three months “ought to be up mid-single digits from last year,” Chief Executive Officer Brian T. Moynihan said Wednesday at an investor conference in New York. Citigroup Chief Financial Officer John Gerspach declined to offer a similar comparison, but provided figures that suggest revenue would increase about 12 percent if his worst case scenario plays out, according to data compiled by Bloomberg.
“Last year was so bad in the fourth quarter, I don’t have a year-over-year comparison,” Gerspach said at the same conference, which was organized by Goldman Sachs Group Inc. “I almost want to forget the fourth quarter of last year.”
Wall Street firms have struggled with lower trading revenue for years, cutting costs and jobs amid the decline. The projected results from the two firms suggest it’s possible the worst is behind them. Morgan Stanley’s investment banking and trading head Colm Kelleher said last month that the low point for bond trading has potentially been reached, and this week JPMorgan Chase & Co. CFO Marianne Lake said an expected increase in interest rates could benefit trading businesses next year.
Equities, Fixed Income
In 2014, Bank of America posted $1.74 billion in fourth-quarter sales and trading revenue, or $2.4 billion excluding accounting adjustments. On that basis, trading revenue declined 14 percent from a year earlier on a slump in fixed-income.
