Bank of America is set to increase bonus payments for its highest-performing investment bankers, reported Reuters, citing two sources familiar with the matter.
The lender is also planning to expand the investment banking division’s overall bonus pool, building on the increased deal activity this year.
According to the publication, top dealmakers may see their bonuses rise by approximately 20%, while mid-level performers could receive payouts similar to last year.
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The bank is still finalising year-end compensation figures, and these numbers may be subject to change.
Last year, Bank of America raised average bonuses by 10%. The bank usually communicates its bankers about the bonus decisions in January.
According to a regulatory filing, the bank has generated $130m in fees through the Norfolk Southern transaction.
The publication said that Bank of America plans to grow its share of investment banking fees by 50 to 100 basis points over the next three to five years.
The bank aims to close the gap with competitors JPMorgan and Goldman Sachs, which have consistently outpaced it in this area.
It also aims to retain leading talent in M&A, address hiring needs in specific areas, increase participation in transactions valued at $5bn, and strengthen its presence in middle-market deals.
Bank of America CEO Brian Moynihan told investors that this month, the investment banking fees are anticipated to remain unchanged in the fourth quarter.
The revenue from the markets business is expected to increase between a high single-digit percentage to 10%.
Financial compensation consultancy Johnson Associates projects that overall Wall Street bonuses for traders and investment bankers will rise for the second consecutive year, driven by increased deal volume and market volatility.
The current bonus pool is forecast to reach its highest level since 2021, when deal activity and profits peaked.
Last month, Bank of America’s wealth management branch expects a medium-term net new asset growth of 4% to 5%, according to its latest investor presentation.
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