BofA Puts More Capital Into Sales, Trading Teams, CEO Says

Bank of America Corp. Chief Executive Officer Brian Moynihan said the bank will put more capital into its sales and trading teams, after it took advantage of wild swings in the stock market during the pandemic.

“On the sales and trading side, our team’s done a fantastic job,” Moynihan said Thursday at an Alliance Bernstein conference. “We’re putting more capital into that team frankly because they’ve been consistently able to perform, and we saw them perform in a wild set of circumstances.”

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Traders and investment bankers at the biggest Wall Street lenders saw their capital-markets businesses soar last year and into 2021 amid stock-market volatility sparked by the Covid-19 outbreak. Bank of America reported a 17% surge in revenue from sales and trading in the first quarter.

The infusion of more capital will allow that business to run a larger balance sheet, Moynihan said.

“We like that business, it’s going to ebb and flow based on opportunity; it has some seasonality to it,” he said. “For us, it’s been a relatively consistent amount of revenue,” Moynihan said, adding that on the investment-banking side, deals are also still strong.

Bank CEOs were called before Congress last week for two days of hearings in which lawmakers grilled them on issues from climate to consumer fees and lending to controversial — though legal — industries. A lack of questioning on banks’ financial health could mean the path is clear for more flexible capital-return policies, Wells Fargo & Co. analyst Mike Mayo wrote in a note, potentially allowing lenders to double capital returns to shareholders. Mayo said Bank of America and Citigroup Inc. could benefit the most.

Bank of America’s fixed-income traders delivered a 22% jump in revenue in the first quarter, while its stock desks posted a 10% rise. Still, the overall increase didn’t reach the blowout numbers posted by rivals JPMorgan Chase & Co. and Goldman Sachs Group Inc.

(Updates with Wells Fargo analyst commentary in sixth paragraph.)

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