Bank of America unveils $40B stock buyback hikes dividend 8% as shares rise 10% in 2025

Bank of America Corp. has announced a $40 billion stock repurchase program set to begin August 1, 2025, replacing its existing authorization with approximately $9.1 billion remaining as of June 30 [1][2]. The move underscores the bank’s commitment to enhancing shareholder returns, complemented by an 8% increase in its quarterly cash dividend to $0.28 per share [2][5]. The new buyback replaces a $25 billion program that had been scheduled to expire on the same date, signaling a strategic pivot to allocate excess capital amid resilient earnings.

The bank’s second-quarter results revealed a mixed performance, with profit exceeding expectations at 89 cents per share—above the 86 cents forecasted—while revenue fell short of projections at $26.61 billion versus $26.72 billion [3][4]. The revenue shortfall was attributed to net interest income (NII), which totaled $14.82 billion, $70 million below StreetAccount’s estimate. Despite this, NII rose 7% year-over-year, driven by stronger deposit inflows and loan growth [4]. CEO Brian Moynihan highlighted the bank’s broader economic resilience, noting stable consumer spending and improved commercial borrower utilization rates.

Market reactions to the buyback announcement were immediate. Bank of America’s shares surged in late New York trading, with analysts attributing the rise to the scale of the capital return plan and dividend hike [3]. The bank’s decision aligns with a broader trend among U.S. lenders, as JPMorgan Chase and Morgan Stanley recently approved $50 billion and $20 billion repurchase programs, respectively [1]. These moves follow recent Federal Reserve stress tests confirming the institutions’ ability to withstand severe economic scenarios, bolstering confidence in expanded shareholder distributions [8].

The buyback’s effectiveness, however, will depend on execution speed and market dynamics. While the $40 billion allocation could boost earnings per share, analysts caution that balancing buybacks with reinvestment in growth areas remains critical [4]. The bank’s capital discipline—rooted in post-crisis governance—will be tested as it navigates macroeconomic uncertainties, including interest rate volatility and credit risk management.

Bank of America’s shares have already gained 10% in 2025, reflecting investor optimism. The expanded buyback adds further momentum, positioning the bank to compete in a financial sector increasingly focused on capital efficiency.

Source:

[1] [Bank of America Announces $40 Billion Stock Buyback](https://www.tipranks.com/news/company-announcements/bank-of-america-announces-40-billion-stock-buyback)

[2] [Bank of America Raises Dividend, Authorizes $40 Billion Buyback](https://www.investing.com/news/company-news/bank-of-america-raises-dividend-authorizes-40-billion-buyback-93CH-4149275)

[3] [$40 Billion Buyback Sends Bank of America Stock Surging](https://www.cryptopolitan.com/40b-buyback-bank-of-america-stock-surging/)

[4] [BofA Hikes Dividend 8%, Unveils $40B Buyback Plan](https://breakingthenews.net/Article/BofA-hikes-dividend-8-unveils-dollar40B-buyback-plan/64509004)

[5] [Bank of America Increases Common Stock Dividend 8% to $0.28](https://www.wvnews.com/news/around_the_web/partners/pr_newswire/subject/dividends/bank-of-america-increases-common-stock-dividend-8-to-0-28-per-share-authorizes-40/article_e9add600-6629-5da1-9f35-7b6978400c46.html)

[8] [Bank of America Authorizes $40 Billion Stock Repurchase Plan](https://www.marketscreener.com/news/bank-of-america-authorizes-40-billion-stock-repurchase-plan-ce7c5cd2d089f627)