Bank of America CEO Sees Trading Revenue Rising Close to 10% This Quarter

(Bloomberg) -- Bank of America Corp. Chief Executive Officer Brian Moynihan said he expects the company’s traders to do very well in the current quarter, while not up to the pace set in the first three months of the year.

Combined bond- and stock-trading revenue may rise in the “high single digits” or even close to 10% from a year ago, he told investors Wednesday at a virtual conference. The bank’s trading revenue jumped 22% in the first quarter to $4.3 billion.

“You’ve seen the volatility come down in the market, and so equities is down and FICC is up a lot,” Moynihan said, referring to the fixed income, currencies and commodities business.

Investment-banking revenue is forecast to rise by about 10%. That compares with an 11% decline in the first quarter to $4.6 billion.

Moynihan is the latest Wall Street bank chief to give a snapshot of trading performance. On Tuesday, JPMorgan Chase & Co. CEO Jamie Dimon said the environment has been as strong this quarter as it was in the first three months of the year, when the bank set a record for revenue from that unit.

Here are other takeaways from Moynihan’s remarks:

• The company has ample capital to support dividends. “We earned twice our dividend in the toughest quarter we’ve had in many years,” he said. “I don’t think it’d be good policy to restrict dividends across the board, because every company is different.”
• Negative interest rates are unlikely in the U.S., and have been shown to be detrimental in other nations, Moynihan said. “We’ll take whatever comes at us and deal with it, but I just don’t think it’s wise policy,” he said.
• Instead, he views U.S. efforts aimed at economic relief as more effective. “What the Fed has done with the standby facilities has stabilized markets,” while actions by the administration and Congress have helped cash-strapped consumers as unemployment rises. “That’s the way to go about fixing this crisis. The rate structure’s not going to make people take activity if they don’t have the cash and confidence to do it.”

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