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Bank of America CEO Says Q2 Trading Revenue to Rise by Nearly 10%

By Eric Volkman – May 28, 2020 at 8:00PM

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If Brian Moynihan's forecast proves true, the take from the activity might help save the company's quarter.

Bank of America (BAC 4.15%) should see a revenue improvement this quarter in one crucial area for U.S. banks -- securities trading revenue. In an industry conference on Wednesday, the sprawling bank's CEO Brian Moynihan said he expects that the revenue for this category will increase at high single-digit percentage rates -- "probably closer to 10%," in Moynihan's words -- on a year-over-year basis in the current Q2.

Much of this has to do with equities trading volume, which has seen sharp increases amid general market volatility lately in the wake of the SARS-CoV-2 coronavirus outbreak that has spread throughout the world. According to Moynihan, Bank of America is also benefiting from secondary share issues during the period.

A stock market trading graph.

Image source: Getty Images.

But in such a tense and nervy environment, the situation could shift quickly, and the company's Q2 doesn't end for another few weeks. "You've got another month, and these things can bounce around on you," Moynihan said.

Trading activity was a money-spinner for Bank of America in Q1, rising by 22% from the same quarter of 2019 to hit $4.3 billion. That figure comprised roughly 19% of the big bank's total revenue for the period.

The company has had a very strong presence in securities trading for years, thanks to its financial-crisis-era purchase of storied investment bank Merrill Lynch. One telling factor in the bank's ownership is that it has retained elements of the Merrill Lynch brand name in some of its investment banking and other operations.

Thursday wasn't a good day for banking stocks, in general. Bank of America shares fell by 4.3% on the day, a steeper fall than the broader equities market.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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