Issues with Bank of America’s investment bankers

Bank of America recently released its Q1 results for 2025, which showed a disappointing performance compared to its US rivals. The investment bank sector of BofA has faced challenges, especially in its capital markets teams, where equity capital markets (ECM) revenues decreased by 34%, and debt capital markets (DCM) revenues only grew by 7%. In terms of M&A, BofA’s performance was subpar, with a 7% increase, although it fared better than some competitors.

So, what caused the struggles in Bank of America’s investment banking division? While the bank did not provide specific reasons for the decline, it did mention a slight increase in market share by 0.23%. However, there may be underlying issues affecting the bank’s performance. BofA has experienced a significant loss of managing directors (MDs), with a net loss of 19 MDs in the US in 2024, compared to just two at JPMorgan. Research suggests that MDs can bring in an average of $4.5 million in revenue per year to a bank like BofA.

To address these challenges, Bank of America has implemented some changes. Despite initially avoiding layoffs during the pandemic, the bank cut over 100 junior investment bankers globally in the first quarter of 2025. The hope was that attrition would naturally reduce the need for layoffs, but employee turnover remained low in the previous year. This situation included investment bankers who were not meeting performance expectations.

In addition to the struggles in its investment banking division, BofA’s sales and trading business also faced difficulties in the first quarter of 2025. While equity trading revenue saw an 18% increase, it still lagged behind its competitors. In fixed income, currencies, and commodities (FICC), BofA’s 8% revenue growth was comparable to JPMorgan’s performance.

The challenges faced by Bank of America’s investment bankers highlight broader issues within the bank’s operations. The loss of managing directors, coupled with underperformance in key revenue-generating areas, has raised concerns about the bank’s ability to compete effectively in the financial markets. As BofA continues to navigate these challenges, it will be essential for the bank to address underlying issues and optimize its strategies to improve its performance in the future.