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This is what BAML's Q3 results tell you about the prospect of getting an investment banking job in 2015.

Six things BAML's results are telling you about your banking career

Bank of America is the latest U.S. bank to report its Q3 results. This is what you need to know about where to work (and where not to).

1. Yes, it really has been an especially bad quarter for ECM bankers

This time last year, ECM bankers were in the midst of a boom, but as IPOs have dried up in the third quarter, revenues have shrunk. Bank of America Merrill Lynch’s ECM bankers generated $188m in equity related fees during the third quarter. This is less than half the $417m in Q2 and a slip from $315m at this point last year. Something strangely similar happened at J.P. Morgan. 

Screen Shot 2015-10-14 at 13.28.50

Source: Bank of America

2. Yes, M&A is the place to be

By contrast BAML’s M&A team has been flying. Investment banking fees were up by 23% year on year – compared to 27% at J.P. Morgan – and income increased from $276m in Q2 to $391m in the third quarter. Fees are (relatively) stable in debt capital markets at $748m, but ECM fees mean that BAML’s overall investment banking fees were down by nearly 5% year-on-year in Q3.

3. Jobs are still disappearing

Bank of America doesn’t breakout headcount by division, but overall staff numbers were down in the third quarter. BofA now employs 215.1k across the bank, compared to 229.5k at this point in 2014.

4. But banks are hiring people who can bring in revenues

Again, Bank of America doesn’t tell us where it’s been hiring or firing, but it does say that it’s cut in infrastructure and support while hiring for client-facing roles. In its consumer bank, for example, it reduced headcount by 7% to 66k, but hired more sales specialists to take staff numbers there to 7,185.

5. You don't want to work in credit trading 

The one area with the fixed income currencies and commodities space that BAML leads the pack is in credit, according recent league tables released by research firm Coalition. The problem with this is that credit is among the worst areas to work as a trader in investment banking currently. BAML says that it derives 60% of its FICC income from credit. Credit trading tumbled and FICC revenues were down by 12% year on year at BAML. Add in the fact that it’s one of the few investment banks to post declines in its trading revenues in the first half and it’s easy to see why it trimmed 200 jobs from its investment bank.

Screen Shot 2015-10-14 at 13.18.53

Source: Bank of America

6. Yes, equities is the place to be

While FICC trading has declined, equities trading revenues at BAML increased by 12% year on year (much the same as at J.P. Morgan). However, as the chart below shows, equities revenues at BAML have been static ever since the first quarter and FICC revenues ($2bn) still exceed equities by a wide margin.

Screen Shot 2015-10-14 at 13.19.17

Source: Bank of America 


AUTHORPaul Clarke

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