Strong Markets, Higher NII Lift Earnings
Bank of America reported second‑quarter net income of $7.1 billion, or $0.89 per share, exceeding analysts’ forecast of $0.86. The upside came from record sales‑and‑trading revenue and a continued boost in net interest income (NII). Revenue from trading jumped 15 percent to $5.4 billion, the thirteenth straight quarter of year‑over‑year growth, as clients repositioned portfolios amid shifting U.S. tariff policy and geopolitical turmoil.
Equities trading revenue rose 10 percent, while fixed‑income, currencies and commodities (FICC) revenue leapt 19 percent. CEO Brian Moynihan said consumer spending and commercial loan demand remain solid, and noted that clients are “finding clarity” now that a new tax package has passed and trade policies appear more predictable.
Net Interest Income Hits All‑Time High
Quarterly NII rose 7 percent to a record $14.7 billion, helped by deposit repricing and loan growth. On a taxable‑equivalent basis NII was the highest for any quarter in the bank’s history. CFO Alastair Borthwick reaffirmed guidance for NII of $15.5 billion to $15.7 billion in Q4 2025 and expects mid‑single‑digit loan growth in the second half of the year. Average loans and leases climbed 7 percent to $1.13 trillion.
The bank set aside $1.6 billion for credit losses, slightly higher than a year ago, reflecting caution amid economic uncertainty and elevated interest rates.
Investment Banking Underperforms Rivals
Investment‑banking fees fell 9 percent to $1.4 billion, lagging peers such as JPMorgan, Citigroup, and Wells Fargo, all of which posted gains. Dealmaking cooled in April after fresh tariff headlines but began to rebound in May and June. Management is “encouraged” by the improving pipeline and expects stronger activity in the second half of the year.
Looking ahead, BofA says it is assessing demand for a potential stablecoin offering, signaling interest in expanding into digital‑asset payments as the regulatory outlook evolves.
Expense Discipline and Outlook
Headcount ticked up slightly to 213,388 employees, but Moynihan said the firm aims to hold staffing flat and sees overall expenses stabilizing or declining in 2025. Despite the earnings beat, shares slipped nearly 1 percent after the opening bell and remain up just 4 percent year‑to‑date, trailing the KBW Bank Index.
Analysts are split on the long‑term outlook. CFRA’s Kenneth Leon cautioned that BofA’s consumer lending book could face pressure if the labor market weakens, and suggested other large banks are better positioned to capitalize on an investment‑banking rebound. Still, BlackRock and other strategists see opportunities for alpha in a market they expect will remain volatile as tariff policy and rates continue to evolve.
