Bank of America Sees 10–15% YoY Rise in Q3 2025 Investment Banking Fees

Bank of America’s third‐quarter outlook for 2025 signals a meaningful rebound in investment banking fees, both at its own firm level and across the broader industry. CFO Alastair Borthwick expects a 10%–15% year‐on‐year growth in IB fees, aligning with the fee pool’s trajectory. [1][2] This comes with strong underlying dealmaking: global mergers and acquisitions activity reached about US$2.6 trillion through the first seven months of the year—approaching peaks seen in 2021—driven by renewed corporate confidence, aided by optimism in AI and stable consumer spending. [2][3][4]

BofA’s actual Q3 results bolster its forward guidance. Across its investment banking division, revenue jumped roughly 43% year over year; M&A advisory fees rose ~51%, while equity and debt underwriting revenues climbed ~34% and ~42%, respectively. [3][4] This suggests that not only are deal volumes increasing, but issuers are indeed coming to market, which supports both fee‐pool expansion and market share gains for active players.

Looking deeper, several drivers are supporting this growth: resilient consumer demand, improving asset quality outside of CRE (commercial real estate), and favorable interest rate landscapes boosting net interest income. [2][3] BofA also raised its medium‐term return on tangible common equity target to 16%–18%, aiming to narrow the gap with peers like JPMorgan. [5] These strategic goals reflect expectations of sustained deal and fee growth.

However, risks remain. Rising regulatory pressures, cautious capital deployment by corporate clients, and uncertainty in policy (tariffs, trade, Fed rate moves) could dampen momentum. Furthermore, sustaining the high growth rates seen in underwriting and advisory—both sensitive to market sentiment—will require favorable economic conditions. Open questions include whether issuance pipelines will continue to support such growth, and whether cost structures (particularly in compliance, technology, and talent) will allow margin expansion.