The bank, in an October 17 earnings statement covering the three months to September 30, said that a stronger performance across credit products and continued strength in rates and client financing helped to boost fixed-income, currencies and commodities revenues up 39% from a year earlier to $ 2.8 billion – its best performance since the first quarter of 2014, according to analysis of the bank’s past results.
That more than offset a 17% drop in equities revenues to $ 960 million driven by lower cash and derivatives client business, and left total sales and trading revenues in BAML’s global markets division, excluding the effects of debt valuation adjustments, 18% ahead of the third quarter of 2015 at $ 3.7 billion.
That helped power net profits from global markets, excluding DVA effects, up 45% to $ 1.2 billion, according to a presentation released alongside the results. Revenues rose by a fifth from a year earlier to $ 4.5 billion.
BAML’s strength in FICC echoes the performances of JP Morgan and Citigroup, which published their own third-quarter results on October 14. JP Morgan’s fixed-income revenues leapt by 48% from the third quarter of 2015 to $ 4.3 billion, with the bank singling out its rates business, which it said had been active since the UK’s Brexit vote in late June, as well as credit and securitised products.
Citi posted a 35% rise in fixed-income sales and trading revenues to $ 3.5 billion on the back of strength in rates, currencies and spread products.
In BAML’s global banking division, which spans investment banking, business lending and transaction services, third-quarter revenues were up 10% year at $ 4.7 billion, with profits of $ 1.6 billion showing a near-22% rise.
Sharp rises in capital markets fees drove that performance. After suffering its worst quarterly performance in equity underwriting since at least 2010 in the third quarter of 2015 – a feat that BAML matched in the first three months of 2016 – the business bounced back in the three months to September 30, with corporation-wide revenues soaring by 39% to $ 261 million.
The bank was a top five equity capital markets house globally during the third quarter, according to Dealogic, ranking fourth by deal value and winning a bookrunner role on Postal Savings Bank of China’s IPO in September, which at more than $ 8 billion was the quarter’s largest ECM deal.
In debt issuance, where the bank ranked third for bookrunner activity globally during the quarter, revenues rose by 21% to $ 908 million. Those increase in capital markets issuance revenues more than offset a 16% drop in advisory revenues to $ 328 million.