Bank of America on Wednesday reported trading results that easily topped estimates, and like JPMorgan the day before, IB revenue came in better than expected too.
FICC sales and trading brought in $3.25 billion for BofA in Q2, up 19% and comfortably more than the $2.96 billion analysts expected, while equities chipped in $2.13 billion, a small beat.
Overall, Brian Moynihan’s traders contributed $5.38 billion to the bank’s top-line, around $400 million more than analysts saw. Although down from Q1’s haul, that was 15% higher versus the same period a year ago.
Of course, what counts most at BofA is net interest income, and on that score, $14.67 billion was a beat, albeit not an especially pronounced one.
Q2 marked the fourth straight QoQ NII gain and the third consecutive YoY advance.
If you’re wondering how Fed cuts and/or lower yields would affect that figure, BofA provided an estimate, as is custom. A 100bps parallel shift in the forward rate curve versus June 30 levels would pressure NII lower by $2.3 billion over 12 months.
And yet, the bank still sees Q4 NII at between $15.5 billion and $15.7 billion. That forecast includes a projected $250 million hit from two 25bps Fed cuts (in September and October).
In IB, revenue of $1.43 billion topped the $1.27 billion consensus, as every line beat. Advisory fees of $333 million compared favorably to $310.6 million seen, while debt and equity underwriting revenue of $837 million and $328 million, respectively, easily topped the $770 million and $263 million consensus calls.
Although down both QoQ and YoY, the important takeaway is that the recovery which began early last year is intact despite all the uncertainty associated with the trade war.
Running quickly through the rest of the release, total deposits of $2.01 trillion beat, so did loans at $1.15 trillion. Non-interest expenses of $17.18 billion were in line, comp costs of $10.33 billion were too. Net interest yield was a touch light at 1.94%. The provision was $1.59 billion, up from $1.48 billion in Q1 and $1.51 billion in Q2 of 2024, but lower versus consensus, which saw $1.64 billion. Charge-offs were lower versus the same period a year ago.
On the top-line, revenue net of interest expense was $26.46 billion, a marginal miss. Net income was $7.12 billion, better than the $6.56 billion analysts saw. EPS was $0.89.
All in all, this report was fine and there was very little in the sparse accompanying color to suggest the bank sees trouble ahead. “Consumers remained resilient, with healthy spending and asset quality, and commercial borrower utilization rates rose,” Moynihan said Wednesday, adding that so far in 2025, BofA’s “returned 40% more capital to shareholders” compared to last year. And that’s really all that matters, right?
