Bank of America [1] is expecting to report trading revenues down 15 percent when the third quarter of the year ends on September 30, says to the bank’s CFO, Paul Donofrio, according to a report [2] by the Motley Fool.
This isn’t an uncommon trend, says the Motley Fool. Trading revenues can be affected by a number of influences, including consumer sentiment, and ordinary and regular changes in the market.
The report points to past instances where this has occurred. For instance, in Q1 of 2016, the bank’s trading revenue fell by 16 percent, largely spurred by oil prices and the United Kingdom’s potential exit from the European Union.
In the first quarter of 2017, however, Bank of America’s trading revenue grew 23 percent year-over-year, proving that the market’s volatility isn’t necessarily indicative of long-term trends.
The Motley Fool also predicts that JPMorgan Chase and Citigroup will also report drops in trading revenue, at 20 percent and 15 percent, respectively.
According to the report, trading revenue for Bank of America accounts for only 16 percent of their profits, even though that figure amounts to $3.2 billion in revenue. Given past trends in trading revenue, the numbers for the third quarter most likely don’t indicate a trend.
It should be noted that financial guru Warren Buffet recently became the largest shareholder [3] of the bank.