NEW YORK: Bank of America Corp is catching up to its biggest rival, JPMorgan Chase & Co, in investment banking in Asia-Pacific as a three-year rebuild of the business with a focus on winning big deals starts paying off.
The Charlotte, North Carolina-based bank has closed a “significant gap” to the third-ranked JPMorgan in fees generated in Asia Pacific, placing right behind it, Peter Guenthardt, the firm’s co-head of investment banking in the region, said in an interview.
“We’re pretty much neck-and-neck,” he said, declining to give specific details.
The moves in Asia align with a global ambition outlined by Matthew Koder, head of global corporate and investment banking, to become top three in industry rankings for every sector, region and product. In the second quarter, the bank earned a record US$2.1bil (RM8.89bil) in investment banking fees, the third-highest globally.
Investment banking now contributes about 15% to Bank of America’s overall business in Asia, doubling from three years ago, according to sources.
That comes at a time when dealmaking is booming while low interest rates put pressure on other areas of banking.
Guenthardt said the bank has “significantly” increased the number of “outsized fee events,” including working on initial public offerings in Hong Kong for Baidu Inc and Kuaishou Technology.
Its Asia-Pacific investment-banking revenue has grown to about US$700mil (RM2.96bil), according to sources.
The division’s headcount in the region reached about 300 after it recruited more than 70 bankers this year, including recent graduates, the sources said.
Goldman Sachs Group Inc and Morgan Stanley each have more than US$1bil (RM4.23bil) in revenue, excluding Japan.
Guenthardt declined to comment on the hiring. The bank didn’t break out divisional numbers for Asia. Spokespeople at JPMorgan, Goldman and Morgan Stanley all declined to comment.
Gains in deal-making had put Bank of America less than US$20mil (RM84.66mil) away from JPMorgan, which is in third place for the year in the region behind Morgan Stanley and Goldman Sachs, a spokesman for the Charlotte, North Carolina-based bank said, citing data from Dealogic Inc.
That narrows the gap from a couple of hundred million dollars three years ago.
In one key metric, equity underwriting, the bank now ranks fifth among international banks in Asia Pacific, according to data compiled by Bloomberg.
It’s one spot ahead of JPMorgan, which has dropped from third last year.
Still, Bank of America is among foreign banks facing headwinds from a regulatory crackdown in China’s technology sector that’s derailed the US listing plans of a number of firms.
Unlike most peers, the lender lacks a securities operation on the mainland, where other Wall Street names have been beefing up their businesses.
The bank is instead eyeing tech listings in South-East Asia and India, and focusing more on health-care and consumer deals in China, Guenthardt said. — Bloomberg
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