Bank of America's M&A revenues suggest the medicine isn't working yet

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So much for the reinvigoration of Bank of America's M&A business. After fretting last year that the bank had got a little too cautious on getting involved in M&A deals, after shaking up senior management and after promising an influx of new staff, BofA CEO Brian Moynihan still has reason to look at the M&A business askance. The first quarter of 2019 was good. But it was far from great. 

In Q1, BofA's M&A revenues were up 10% compared to the first quarter of 2018. BofA's M&A bankers can feel strong - until they look at U.S. rivals, where revenue growth was thunderous by comparison. At Goldman Sachs, M&A revenues rose 51% year-on-year in the first quarter. At Citi, they were up 75%. Only JPMorgan put in a year-on-year performance comparable to BofA, and even there revenues were up by 12%.

Year-on-year, BofA's growth was the slowest of the pack.

Bank of America didn't respond to a request to comment on the vicissitudes of its advisory business, but the lacklustre growth looks disappointing. After dispensing with Christian Meissner in September last year and then Diego De Giorgi in early January and appointing a new head of the investment bank in the form of Matthew Koder (who himself appointed two new heads of M&A in the form of Jack MacDonald and Thomas Sheehan), a greater degree of invigoration might have been expected. 

This may yet come in the form of the 70 new senior investment bankers BofA plans to hire, most of whom have yet to arrive.

Until then, there are a few early signs that the patient may be responding to the treatment. - BofA went from 12th to 5th in the U.S. M&A league table in the first quarter, according to Dealogic, even as it fell from 7th to 10th in EMEA.  

Equally promisingly, BofA's first quarter M&A revenues also fell by 'just' 9% relative to the final quarter of 2018, compared to reductions of 26%, 11% and 18% at Goldman Sachs, Citi and JPMorgan. Quarter-on-quarter, at least, therefore Bank of America's M&A business is gaining market share. But the recovery looks far from assured.

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