Bank of America navigates rate pressure with growth in Trading and Wealth

Overview

Bank of America started 2025 on a strong note, with earnings growth driven by both higher net interest income and fee income. The bank reported resilient consumer activity, consistent loan growth, and 12 consecutive quarters of year-over-year revenue increases in sales and trading.

Chairman and CEO Brian Moynihan emphasized the benefits of the firm’s disciplined strategy: “Our business clients have been performing well; and consumers have shown resilience, continuing to spend and maintaining healthy credit quality. Though we potentially face a changing economy in the future, we believe the disciplined investments we have made for high-quality growth, our diverse set of businesses, and the team’s relentless focus on Responsible Growth will remain a source of strength.”

Q1 2025 vs. Q1 2024:

Net income recorded a value of $7.4bn (+11% YoY), while EPS increased to $0.90 (compared to $0.76 in Q1 2024).
Total revenue (net of interest expense) increased to $27.4bn (+6% YoY), driven by noninterest income growth across all segments and higher net interest income (NII).
- Consumer Banking revenue recorded a value of $10.5bn (+3% YoY), supported by higher NII and card income.
  - Net income declined slightly to $2.5bn (-5% YoY), but with continued momentum in digital, with 4bn logins (+17% YoY) and 49m active users.
  - Credit card spend was $228bn (+4% YoY), with 92% of deposits are primary accounts
- Global Wealth and Investment Management revenue was $6.0bn (+8 YoY), driven by a 15% increase in asset management fees from strong AUM flows and higher market levels.
  - Net income was flat YoY, recording a value of 1.0bn.
  - Client balances were $4.2tn (+5% YoY) and AUM balances were $1.9tn (+7% YoY).
  - 87% of Merrill and Private Bank clients are digitally active.
- Global Banking revenue was $6.0bn (flat YoY), as gains related to leveraged finance positions and higher treasury service charges were offset by lower NII.
  - Net income recorded a value of $1.9bn (-4% YoY), with average loans of $379bn (+1% YoY) and investment banking fees of $1.5bn (-3% YoY).
- Global Markets revenue rose to $6.6bn (+12% YoY), driven primarily by higher sales and trading revenue and gains related to leveraged finance positions.
  - Net income grew to $1.9bn (+13% YoY).
  - Equities revenue was $2.2bn (+17% YoY), FICC revenue was $3.5bn (+8% YoY), while sales and trading revenue was $5.7bn (+11% YoY), which means 12th consecutive YoY growth quarter.
Net interest income grew to $14.4bn (+6% YoY), driven by lower deposit costs, higher NII related to Global Markets activity and fixed-rate asset repricing, partially offset by the impacts of lower interest rates and one less day of interest accrual.
Noninterest expense was $17.8bn (+3% YoY), driven primarily by higher revenue-related expenses and investments in people, technology, operations and brand.
Provision for credit losses was $1.5bn, increasing from $1.3bn in Q1 2024 and flat compared to Q4 2024.
Return on Equity (ROE) recorded a value of 10.4%, while Return on Tangible Common Equity (ROTCE) was 13.9%.
Book value per common share rose to $36.39 (+8% YoY), while tangible book value per common share rose to $27.12 (+9% YoY).
CET1 ratio was 11.8% (standardized), well above regulatory minimum of 10.7%.
The bank returned a total of $6.5bn to shareholders in Q1 2025, including $4.5bn in share repurchases and $2.0bn in dividends, reflecting its continued focus on disciplined capital deployment and shareholder value.

Bank of America remains cautiously optimistic for the rest of 2025. While economic uncertainty and rate environment shifts may pose headwinds, strong deposit growth, stable asset quality, and continued investment in technology and talent are expected to support the bank’s long-term strategy.

As with other major US banks, the announcement of the results for the first quarter of this year did not bring significant movements on the market, with BAC shares ending last trading week with a slight appreciation of the price, below +1%. However, since the beginning of this year, BAC shares have experienced a fairly strong depreciation of the stock price, by almost -17%, and since mid-February, it has been below the 50-day moving average, which demonstrates that even results above analysts’ expectations cannot overcome the global economic uncertainty of this period.