Bank of America Corp. (BofA) has generated less revenue from its equity and fixed-income trading businesses so far this year than in the same period of 2015, according to people with knowledge of the matter.
The second-largest US lenderâ€™s revenue from fixed-income trading, which includes credit, currencies and commodities, dropped about 10 percent from a year earlier, the people said, asking not to be identified discussing the firmâ€™s performance. The bank has collected 11 percent to 12 percent less from equity trading this quarter than last year, one of the people said.
This yearâ€™s global market turmoil, including the worst start ever for US stocks, is hampering banksâ€™ profit outlook and adding pressure to pare operations. Investment banks were already struggling to overhaul fixed-income units amid stiffer capital rules and a trading slump.
Revenue from equities sales and trading was $1.15 billion in the first quarter of 2015, excluding accounting adjustments, while fixed-income products totaled $2.76 billion, according to a Jan. 19 regulatory filing. The bank generated $882 million from trading stocks and $1.76 billion from fixed-income in the fourth quarter, the filing shows. Annual trading revenue has fallen every year since 2012.
Selena Morris, a spokeswoman for the Charlotte, North Carolina-based lender, declined to comment.
Daniel Pinto, JPMorgan Chase & Co.â€™s investment-banking head, said Feb. 23 that equity and fixed-income sales and trading revenue had tumbled about 20 percent so far this year. Pinto also said that investment-banking fees could slump 25 percent this quarter.
Bank of America plans to cut about 150 trading and investment-banking employees on March 8, other people with knowledge of the matter said Thursday. The dismissals stem from Chief Operating Officer Thomas Montagâ€™s push to reduce expenses and are part of the firmâ€™s periodic cull of low performers, the people said.
The lenderâ€™s shares have slid 19 percent this year, the worst performance in the 24-company KBW Bank Index, which is down 10 percent.