Bank of America (BAC) forecasts that investment banking fees will grow 10% to 15% in the current third quarter as Wall Street deals such as initial public offerings (IPOs) and mergers and acquisitions (M&A) accelerate.
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Bank of America’s Chief Financial Officer (CFO) Alastair Borthwick made the bold call concerning investment banking fees at an investor conference on Sept. 8. If true, the increased fees would be a boon to investment banks such as Goldman Sachs (GS), Morgan Stanley (MS), and Truist Financial (TFC).
“The investment banking fee pool is up 10% to 15%, we’ll be in line with that, maybe we’ll do slightly better,” Borthwick said at the conference. He added that trading revenue from Bank of America’s markets division is projected to rise by a mid-single-digit percentage and increase for a 14th consecutive quarter.
Deal Resurgence
The growth in fees comes amid a deal resurgence on Wall Street after several down years. Global M&A has reached $2.6 trillion so far in 2025, its highest level since 2021. Corporate boards are seeking growth, and optimism about an artificial intelligence (AI) boom has offset worries about tariffs and trade wars.
In recent months, Wall Street has been flooded with IPOs from the likes of cryptocurrency exchange Bullish (BLSH) and creative software firm Figma (FIG). There has also been an uptick in M&A activity, notably the proposed $85 billion takeover of railroad operator Norfolk Southern (NSC) by rival Union Pacific (UNP).
Is GS Stock a Buy?
The stock of Goldman Sachs (GS) has a consensus Moderate Buy among 14 Wall Street analysts. That rating is based on seven Buy, six Hold, and one Sell recommendations issued in the last three months. The average GS price target of $724.91 implies 2.28% downside risk.
