Bank of America Delivers Solid Q2 with Growth in Lending, Trading, and NII but Investment Banking Lags

Bank of America posted a resilient second-quarter performance marked by strong lending growth, solid net interest income, and another quarter of consumer strength. The firm reported net income of $7.1 billion, or $0.89 per diluted share, beating the year-ago figure of $6.9 billion and $0.83, respectively. Revenue net of interest expense rose 4% to $26.5 billion. CEO Brian Moynihan called it “another solid quarter,” driven by higher NII, resilient credit trends, and healthy client activity across the consumer and institutional franchises. While the numbers showed strength in core banking and markets, the softness in investment banking and commercial real estate remains a drag.

Bank of America's results exceeded consensus expectations on both top and bottom lines. Analysts had expected EPS around $0.84 on revenue near $25.9 billion. NII came in at $14.7 billion (or $14.8 billion on an FTE basis), up 7% year-over-year and rising for the fourth consecutive quarter. Drivers included fixed-rate asset repricing, higher NII in Global Markets, and growth in both deposits and loans. Net interest margin wasn’t explicitly disclosed in the report, but ongoing sequential NII growth indicates BAC has been managing asset and liability repricing well despite a flattening rate curve.

Credit quality remained steady. Provision for credit losses rose slightly to $1.6 billion from $1.5 billion in the prior quarter and prior year. Net charge-offs were unchanged at $1.5 billion. Consumer credit card charge-offs ticked down sequentially to $1.1 billion, with a loss rate of 3.82% versus 4.05% in Q1. Early and late-stage delinquencies declined. Commercial charge-offs rose by $133 million, mostly due to sales and resolutions in the office segment of commercial real estate. The allowance for credit losses stood at $14.4 billion, representing 1.17% of loans and leases.

Consumer Banking led the earnings charge, posting $3.0 billion in net income on $10.8 billion in revenue, up 6% year-over-year. NII was the key driver here. Combined debit and credit card spending rose 4% to $244 billion. BAC added roughly 175,000 net new checking accounts, marking the 26th consecutive quarter of growth. Deposits totaled $952 billion, and consumer investment assets rose 13% to $540 billion, aided by both market appreciation and net flows. Importantly, 65% of all sales were digitally enabled, with mobile engagement hitting 4.1 billion logins.

Global Wealth and Investment Management (GWIM) posted net income of $1.0 billion, with revenue up 7% to $5.9 billion. Asset management fees rose 9% to $3.6 billion, boosted by strong net inflows and higher market levels. Client balances surged 10% to $4.4 trillion. The unit added 7,100 new relationships across Merrill and Private Bank, with AUM reaching $2.0 trillion—up 13% year-over-year.

Global Banking delivered $1.7 billion in net income on revenue of $5.7 billion, down 6% due to weaker investment banking fees and lower leasing revenue. Investment banking fees totaled $1.4 billion, down 9%, as deal volumes and underwriting remained sluggish. Treasury service charges improved by 15%, helping offset some of the fee decline. Loan balances in the middle market rose 8%, and average deposits climbed 15% to $603 billion. However, expense growth of 6% and a modest reserve release kept a lid on profit expansion.

Global Markets had a strong quarter, generating $1.5 billion in net income and revenue of $6.0 billion, up 10%. Sales and trading revenue grew 14% to $5.3 billion (excluding DVA losses of $51 million). FICC was the star of the segment, with revenue up 16% to $3.2 billion, helped by robust client activity in rates and credit. Equities trading rose 10% to $2.1 billion. This marks the 13th straight quarter of year-over-year revenue growth for the trading business, signaling BofA’s continued strength in capturing institutional flows.

Noninterest expenses totaled $17.2 billion, up 5% from a year ago but down $587 million sequentially due to seasonally elevated Q1 payroll taxes. The bank cited increased investment in technology, brand, and people as cost drivers.

The balance sheet remained in strong shape. Average loans and leases rose 7% to $1.13 trillion, while average deposits increased 3% to $1.97 trillion—marking the eighth straight quarter of sequential deposit growth. The CET1 capital ratio held steady at 11.5%, well above regulatory requirements.

Book value per share climbed 8% to $37.13, and tangible book value rose 9% to $27.71. Return on equity was 10.0%, while return on tangible common equity stood at a healthy 13.4%.

Overall, Bank of America delivered a well-rounded quarter, benefiting from strength in consumer spending, trading activity, and deposit growth. While headwinds in investment banking and commercial real estate persist, they were largely expected. If NII continues to trend higher and credit trends stay benign, BAC looks well-positioned into the second half of the year—especially given its strong capital base and dividend momentum.

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