By Saeed Azhar and Arasu Kannagi Basil
NEW YORK (Reuters) -Bank of America expects its trading revenue to grow by a mid-single-digit percentage this quarter, the 13th consecutive gain, CEO Brian Moynihan said on Wednesday.
By contrast, investment banking fees are likely to fall to about $1.2 billion in the second quarter from $1.6 billion a year earlier, he told investors at a conference. That is “not where we want to be, but great prospects, great conversations,” Moynihan said.
Dealmaking has slowed this year as U.S. President Donald Trump’s tariffs on trading partners fanned turmoil in markets and sparked concerns about slowing economic growth.
Still, banking executives have expressed optimism about a recovery in investment banking while noting their trading divisions have cashed in on volatile markets.
Morgan Stanley CEO Ted Pick told investors on Tuesday he expected a strong finish this quarter, while Citigroup’s head of banking Vis Raghavan said performance in its banking and trading divisions will improve.
Moynihan reiterated the bank’s guidance for growth in net interest income this year. The lender earlier projected its NII – the difference between what it earns on loans and pays out for deposits – to climb to a range of $15.5 billion to $15.7 billion by the fourth quarter, versus $14.6 billion in the first.
BofA’s earnings per share are expected to rise to 90 cents in the second quarter from 83 cents a year earlier, as it brings in more income from interest payments, according to LSEG estimates.
Consumers are spending on travel and entertainment, and credit quality is strong, Moynihan said, as clients pay off debts on time. But he cautioned small businesses are more affected by uncertainty over the tariffs.
Separately, BofA is working independently and with other industry participants on a stablecoin – a type of cryptocurrency designed to maintain a stable value relative to a reference asset, such as the dollar.
“We’ve not been quite sure how big it will be, but we have to be ready,” Moynihan said.
Federal legislation currently before the Senate that would establish rules around stablecoins “will allow us to figure out whether there’s really a business proposition,” he added.
Big U.S. banks are holding internal discussions about expanding into cryptocurrencies as they get stronger endorsements from regulators, but initial steps will be tentative, centering on pilot programs, partnerships or limited crypto trading, Reuters reported in May.
(Reporting by Saeed Azhar and Arasu Kannagi Basil; editing by Lananh Nguyen and Rod Nickel)
