Jamie Spencer
First-Quarter Profits and Revenue Surge Amid Trade Uncertainty
Bank of America (BAC) and Citigroup (C) reported strong first-quarter profits and revenue, bolstered by robust trading results. Both banks have emerged as beneficiaries of the market volatility driven by President Trump’s tariff policies, which began to take effect in February and March. The volatility in the market has created opportunities for big banks to profit from trading activities, particularly in equities.
Bank of America Sees Growth Despite Economic Uncertainties
Bank of America’s CEO, Brian Moynihan, acknowledged the potential challenges ahead, noting that “we potentially face a changing economy in the future.” However, he pointed out that despite the uncertainties surrounding some of Trump’s more aggressive tariffs, the bank’s research team doesn’t foresee a recession in 2025. According to the bank’s data, U.S. consumers are still “pushing money into the economy,” and its business clients “remain profitable, liquid, and have strong results.” Moynihan also emphasized that the bank continues to monitor for any signs of a significant shift in the economic environment.
Citigroup’s Strong Trading Results
Citigroup also experienced growth in its first-quarter earnings, with CEO Jane Fraser noting that despite the current trade tensions, the U.S. will remain a global economic leader. Fraser mentioned that “when all is said and done, and longstanding trade imbalances and other structural shifts are behind us, the U.S. will still be the world’s leading economy, and the dollar will remain the reserve currency.” Citigroup’s total sales and trading revenue rose 12% from the previous year to $6 billion, marking its highest-ever quarter for equity trading.
Trading Revenue Growth Across Wall Street’s Big Banks
Both Bank of America and Citigroup benefited significantly from strong trading results, with Bank of America’s trading revenue rising 9% year-on-year to $5.66 billion. The bank’s revenue from equity trading was particularly strong, up 17% to $2.2 billion, marking its highest-ever quarterly result. Citigroup also posted impressive gains in its trading division, as its sales and trading revenue reached $6 billion, representing a 12% increase from the same period last year. Alongside these two, other major banks, including JPMorgan Chase (JPM), Goldman Sachs (GS), and Morgan Stanley (MS), also reported significant jumps in trading revenue, collectively bringing in nearly $37 billion in the first quarter.
Investment Banking Shows Slight Pullback
While trading saw strong growth, some banks reported a slight decline in investment banking fees, as companies became more cautious in the face of ongoing trade uncertainty. At Bank of America, investment banking fees dropped 3% year-on-year to $1.52 billion. This pullback reflects the broader caution in the market as companies reassess their strategies amid the ongoing uncertainties surrounding Trump’s trade policies.
