Maybe Bank of America must start hiring banking MDs again?
Once upon a time, Bank of America was on a hiring spree in investment banking. In 2019, it hired 25% of all the banking managing directors (MDs) who moved jobs globally, according to search firm Sheffield Haworth. Since then, it's a) been on a hiring freeze and b) focused its recruitment firepower on the markets business.
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It shows.
Today's third quarter results suggest that BofA's M&A bankers in particular underperformed rivals at JPMorgan and elsewhere in Q3 and the first nine months. Debt capital markets bankers underperformed too, but by less.
By comparison, in fixed income sales and trading, where BofA has done some big hiring in recent years, its revenues were up 9% in Q3 year-on-year by virtue of "improved client activity and trading performance in currencies and interest rate products." BofA's equities revenues were less comparatively impressive, but the bank has only recently started hiring here and seemed to miss out on JPMorgan's Asian trading windfall.
BofA bankers' performance may be less woeful when compared to the market as a whole. The charts below from LSEG suggest that things aren't so bad. The bank has, however, lost its footing in European M&A, which might explain why it's recently promoted London-based Eamon Brabazon as co-head of global mergers and acquisitions alongside Ivan Farman in the US.
LSEG's chart suggests that BofA's M&A hiring boost from 2021 might be wearing thin. Brabazon may want to hire himself a few new London bankers in the style of Deutsche Bank.
However, the real issue this year appears to be in DCM. It might be self-inflicted: BofA CEO Brian Moynihan said in 2022 that the bank planned to be circumspect about chasing DCM revenues, to rein in its aggressive bankers and to grow responsibly. That seems to be happening in 2024, although BofA is still a market leader and Goldman's DCM decline has been far more precipitous by comparison.
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