Bank of America Merrill Lynch (BAML) bucked the trend with strong performance in fixed income, currency and commodities (FICC) and sales and trading revenue.
Exceeding analysts’ expectations in full-year results published today, BAML's revenue in the quarter was $19.53 billion compared with $18.73 billion the year before.
It has been a successful year for the bank’s investment banking business, reporting a 41% increase this year for sales and trading revenue, from $1.7 billion to $2.4 billion.
However BAML saw a 3% decrease in equities revenue in 2015, “due to lower levels of client activity”. Equities revenue in 2014 also decreased by $76 million to $4.1 billion, “due to financing additional liquid asset buffers, pursuant to current regulatory requirements, primarily in our broker-dealer entities, which also negatively impacted FICC results.”
Fixed income revenue increased by 20% in 2015 compared to 2014, “reflecting improvement across most products, notably in rates and credit-related products”. This defied the trend seen across other investment banks, which have seen declining fixed income sales as a result of difficult market conditions.
In 2014, fixed income, currency and commodities (FICC) revenue decreased at BAML by $332 million to $9 billion, “driven by declines in the rates and credit-related businesses due to both lower market volumes and volatility, partially offset by improvement in the commodities business.”
Paul Donofrio, chief financial officer at BAML said: “Our results this quarter reflect our ongoing efforts to improve operating leverage while continuing to invest in our business. We increased net interest income, managed expenses tightly, and returned $1.3 billion in capital to our shareholders this quarter through common stock repurchases and dividends."