Bank of America expects a third-quarter drop in investment banking fees

Bank of America said its investment banking fees are likely to fall by more than 10% in the third quarter compared with a year earlier, while trading revenue is expected to be roughly flat, CEO Brian Moynihan told analysts on Monday. The outlook follows a strong second quarter, when the bank reported a 50% rise in investment banking fees and a 33% increase in trading revenue. Moynihan said marketwide investment banking activity is down about 10%, and Bank of America may underperform that level because of its business mix. Shares of Bank of America fell 5% in afternoon trading after the comments. The guidance may be an early sign that the recent strength in Wall Street advisory and trading activity is cooling, even as the bank says it still sees a solid pipeline of deals, especially in middlemarket banking. Citigroup also said later on Monday that its thirdquarter investment banking revenue is tracking for lowsingledigit growth, with trading revenue expected to rise in the midsingle digits.