Bank of America posted a 3% increase in second-quarter profit, driven by robust trading revenues and higher net interest income, although overall revenue came in slightly below Wall Street expectations. The Charlotte-based lender reported net income of $7.12 billion, or 89 cents per share, surpassing analysts' forecast of 86 cents per share compiled by LSEG.
Revenue for the quarter rose 4% year-over-year to $26.61 billion but fell short of the $26.72 billion target set by analysts. The shortfall was largely attributed to underperformance in investment banking and softer-than-expected net interest income (NII), despite the figure rising to a second-quarter record of $14.82 billion. StreetAccount had projected $14.89 billion.
"Consumers remained resilient, with healthy spending and asset quality, and commercial borrower utilization rates rose," CEO Brian Moynihan said in the earnings release. "In addition, we saw good momentum in our markets businesses."
Trading revenue surged 15% to $5.4 billion, marking 13 consecutive quarters of year-over-year growth and setting a second-quarter record. Within that, fixed income, currencies, and commodities (FICC) trading revenue jumped 19% to $3.25 billion, exceeding StreetAccount's $3.14 billion estimate. Equities trading generated $2.13 billion, slightly below expectations.
CFO Alastair Borthwick credited the performance to heightened market volatility tied to shifting U.S. trade policy, geopolitical instability, and economic realignments. "All of those things are times where corporates and investors think about their portfolio, think about whether or not they want to reposition," Borthwick said on a conference call with reporters.
Despite the strong showing in trading, investment banking fees fell 9% year-over-year to $1.4 billion, underperforming peers. JPMorgan, Citigroup, and Wells Fargo each posted investment banking revenue gains of 7%, 13%, and 9%, respectively, during the same period. BofA's decline was attributed to sluggish deal activity in April, though executives noted improvements in May and June.
"There was a lot of uncertainty at the time-challenging for management teams to make long-term decisions around capital and therefore it was more challenging for our strategic businesses, equity capital markets and M&A," Borthwick said. He added that BofA sees "a healthy pipeline" and remains optimistic about deal flow in the second half of 2025.
The bank reported average loans and leases of $1.13 trillion, a 7% increase from a year earlier, and reaffirmed expectations for mid-single-digit loan growth through the remainder of the year. Borthwick reiterated the bank's guidance for fourth-quarter net interest income to land between $15.5 billion and $15.7 billion.
BofA set aside $1.6 billion in provisions for credit losses, up slightly from $1.5 billion in the prior-year period.
Shares of Bank of America, which are up 5% year-to-date, rose nearly 1% in pre-market trading Wednesday following the earnings release. The stock has lagged peers and the broader KBW Bank Index so far in 2025, weighed down by mixed investor sentiment over revenue growth and dealmaking momentum.
