Bank of America chose not to participate in some of the hottest AI financing deals, and now its credit traders are feeling the impact of this decision. Since this year, companies have issued more than 400 billion US dollars in bonds in the bond market to build AI infrastructure. Fixed-income investors are scrambling to absorb the new supply, driving a significant increase in related transaction volume. However, according to people familiar with the matter, Bank of America is still catching up with competitors in the corporate bond business. The bank is also seeking to fulfill its promise to invest $250 billion in capital into the AI boom. People familiar with the matter said that since Bank of America's dominant position in this field is less than that of some of its competitors, it is also more difficult for its credit traders to benefit from the subsequent increase in trading activity. Coupled with the slowdown in the trading volume of municipal bonds and other interest rate-related products, these factors together prompted CEO Brian Moynihan last week to predict last week that third-quarter transaction revenue may remain relatively flat. Referring to the investment banking business, Moynihan said, “We don't have such a good layout in some business areas where trading activity is more active. The sales and trading business will still be one of our best performing third quarters in history, but it will be relatively flat year over year.”
Zhitongcaijing · 1d ago
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Bank of America chose not to participate in some of the hottest AI financing deals, and now its credit traders are feeling the impact of this decision. Since this year, companies have issued more than 400 billion US dollars in bonds in the bond market to build AI infrastructure. Fixed-income investors are scrambling to absorb the new supply, driving a significant increase in related transaction volume. However, according to people familiar with the matter, Bank of America is still catching up with competitors in the corporate bond business. The bank is also seeking to fulfill its promise to invest $250 billion in capital into the AI boom. People familiar with the matter said that since Bank of America's dominant position in this field is less than that of some of its competitors, it is also more difficult for its credit traders to benefit from the subsequent increase in trading activity. Coupled with the slowdown in the trading volume of municipal bonds and other interest rate-related products, these factors together prompted CEO Brian Moynihan last week to predict last week that third-quarter transaction revenue may remain relatively flat. Referring to the investment banking business, Moynihan said, “We don't have such a good layout in some business areas where trading activity is more active. The sales and trading business will still be one of our best performing third quarters in history, but it will be relatively flat year over year.”
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