Bank of America's FICC hiring gave it its best quarter in years, barely

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Bank of America’s fixed income traders were the darlings of 2023 (if you excuse a tough Q4), but the bank’s Q1 results suggest that they might not necessarily repeat that feat in 2024.

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Bank of America has done some big hiring for its fixed income currencies and commodities (FICC) team, especially in Europe, where it increased the size of its EMEA sales and trading team by 50%. However, as the chart below shows, BofA's FICC revenues fell 6% year-on-year in the first quarter, even while revenues at Goldman rose 10%.

Bank of America blamed the situation on a “weaker trading environment” in macro products on the falling FICC revenue. But while the FICC traders floundered, the equities traders had a far better quarter. Their revenues rose 14%, ahead of JPMorgan, Citi, and Goldman.The bank credited this to a strong performance in derivatives, which it was hiring strongly in earlier this year, also across EMEA.

Last October, Bank of America told Financial News it wants to be a “top-three player” in FICC trading particularly in Europe. 63% of global markets revenue last quarter, however, was generated in the US and Canada, compared to 60% in Q1 last year.

Thanks to the strong growth in equities, BofA's global markets business had its eighth consecutive quarter of growth, and its Q1 revenue performance was its best in over a decade. 

The strongest performers at BofA in the first quarter were its equity capital markets (ECM) bankers, whose revenues rose 131% year-on-year. However, this was following a particularly feeble performance in the baseline quarter in 2023.

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