BAML enjoys double boost from fixed income and advisory

Bank of America Merrill Lynch offices in London

BAML’s revenues from fixed income trading and advisory work surged in the second quarter of 2016

The US bank on July 18 reported its results for the three months to June 30, announcing that fixed income trading revenues, excluding the effects of debt valuation adjustments, surged 22% to $ 2.6 billion – the highest quarterly tally since the first three months of 2015, matching the results of JP Morgan and Citigroup.

That helped offset a 7.5% drop in equities revenues to $ 1.1 billion, leaving total underlying sales and trading revenues up more than 11% to $ 3.7 billion.

BAML’s performance in equity issuance also matched that of its competitors, which have suffered from a slow start to the year amid market volatility and uncertainty surrounding the UK’s vote to leave the European Union. Equity capital markets revenues dropped 44% year-on-year to $ 232 million, a slightly steeper drop than at the other two banks.

BAML stood out from its rivals on the advisory front, however, where revenues surged by a fifth to $ 333 million. The bank, which hired Luca Ferrari from advisory firm Greenhill as its new M&A head in Europe in late June, is the only bulge-bracket Wall Street bank so far to report better advisory fees for the quarter, with JP Morgan reporting flat revenues and Citi recording a 7% dip.

Its debt issuance revenues, meanwhile, inched up to $ 889 million.

Net profits from the global banking unit – which is comprised of advisory, underwriting, lending and transaction services work – climbed 20% to $ 1.5 billion.

In global markets, the sales and trading unit’s net profits surged 42% to $ 1.1 billion from $ 786 million a year earlier.

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