BAML Defines LatAm Fee Opportunity

LatAm is an essential part of the business for Bank of America Merrill Lynch (BAML), according to Andrea Orcel, executive chairman of global banking and markets and president of EM ex-Asia. And investment banking represents just 5% of the potential fee pool. “The emerging markets are an enormous and critical opportunity,” Orcel tells LatinFinance in an exclusive interview. “Latin America is obviously a key component of our global emerging markets strategy.” Orcel estimates a fee pool of around $70bn in LatAm and CEEMEA across banking, global markets and wealth management. About $30bn of that is anticipated from LatAm, taking into account less glamorous areas like trade and export finance, leasing, treasury services and cash management, which pay well when done in bulk. “That includes all businesses: corporate banking, sales and trading, investment banking and wealth management,” says Orcel. “According to Dealogic, the investment banking fee pool for Latin America was about $1.5bn in 2009. We had a high single digit market share of that and we believe we are on target to achieving double-digit share in the future,” he adds. Orcel says LatAm will be a significant contributor to global revenue across all products, but declines to put a number on it. “Latin American investment banking revenues have soared in the past year and are expected to be up 70% by year end, versus 2009,” says Orcel. Globally, BAML earned $3.1bn in Q2, from $29.5bn in revenue. Investment banking income was $1.3bn in the quarter, which BAML does not break out by region.