Bloomberg reports that fees for debt and equity issuance, as well as advice for activities including mergers, rose 17% to $6.41bn last year at Charlotte, Bank of America. That edged out JPMorgan’s $6.33bn in such revenue for the first time since 2008.
Bank of America’s investment-banking operations, run by Christian Meissner and overseen by Chief Operating Officer Thomas Montag, benefited from a record year in debt underwriting as corporations took advantage of all-time low rates for junk bonds ahead of Federal Reserve plans to withdraw stimulus. The question is whether the firm’s business can maintain its top rank when rates rise, said Charles Peabody, an analyst at Portales Partners in New York.
'It’s not even close to sustainable', Peabody said in a telephone interview of the jump in fees from debt. 'It wouldn’t shock me if fixed-income revenues, issuance and trading, were down 20% in 2014. Over the course of the year, rising rates will become a dislocative factor that will cut that pipeline at some point'.
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image: © Alex E. Proimos