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Bloomberg
Bank of America (BofA) Corp posted the biggest jump in investment-banking fees on Wall Street, helping profit overcome headwinds from lower interest rates.
Third-quarter debt underwriting fees unexpectedly surged 19% and the firm’s fixed-income traders eked out a slight increase, pushing profit above analysts’ estimates. Its gains in advisory fees also surpassed rivals in the best quarter for the investment bank in more than two years.
The 27% increase in fees shows progress by the bank’s new corporate and investment-banking chief, Matthew Koder, who’s overhauling the unit after executives admitted last year they had pulled back too much on risk. He’s reinvigorated efforts to clinch more midsize transactions in the US and has been adding dozens of bankers across the division.
Chief Executive Officer Brian Moynihan has expressed confidence in the US economy even as the Federal Reserve cuts interest rates and growth estimates are revised down. Lower borrowing costs are a major headwind for banks, while concerns about a global economic slowdown and trade tensions stymie client activity.
Bank of America shares advanced 1.5% to $30.17 in early trading in New York at 7:07 am. They gained 21% this year through Tuesday, compared with a 17% increase for the KBW Bank Index.