Bank of America Q2 Loans And Deposits Grow, Efficiency Ratio Increases To 64.58%

Bank of America Corp (NYSE:BAC) reported second-quarter fiscal 2025 net income of $7.1 billion (versus $6.9 billion a year ago) and EPS of $0.89, beating the analyst consensus estimate of $0.87.

Revenue, net of interest expense, increased 4% year-over-year (Y/Y) to $26.5 billion, missing the analyst consensus estimate of $26.8 billion.

Higher net interest income (NII), sales and trading revenue, asset management fees, and lower investment banking fees drove the growth.

Also Read: Big Banks Pass Fed’s 2025 Stress Test With Ease—But Some Say It Was Too Easy

Consumer Banking clocked $2.97 billion versus $2.6 billion Y/Y, Global Wealth and Investment Management was $993 million versus $1.03 billion Y/Y, Global Banking was $1.7 billion versus $2.1 billion Y/Y, and Global Markets was $1.6 billion versus $1.4 billion Y/Y.

Investment banking fees (global banking) declined by 9% to $1.4 billion, lagging behind rivals JPMorgan (NYSE:JPM) and Citigroup’s (NYSE:C) quarterly growth due to rebounding activity at the end of the quarter.

Net interest income was $14.7 billion (+7% Y/Y), driven by Global Markets activity, fixed-rate asset repricing, and loan growth. Last year, the Federal Reserve’s rate cuts lowered banks’ deposit costs, allowing them to keep more of the difference between loan income and deposit payouts, boosting their net interest income.

Noninterest income was $11.8 billion (+1% Y/Y). Provision for credit losses grew 6.7% Y/Y to $1.6 billion.

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The efficiency ratio for the quarter was 64.58%, compared to 63.86% Y/Y. The bank reported a CET1 ratio of 11.5%, compared to 11.9% a year ago. The book value per share of $37.13 improved by 8%.

The average loan and lease balance was $1.13 trillion (+7% Y/Y). Average deposits are up 3% Y/Y to $1.97 trillion.

Chair and CEO Brian Moynihan said Bank of America delivered a strong quarter, with earnings per share rising 7% Y/Y. He noted that net interest income increased for the fourth consecutive quarter, driven by steady deposit growth over eight quarters and a 7% rise in loan volume.

Consumers showed resilience, maintaining solid spending and strong asset quality, while commercial clients increased their credit utilization. Moynihan also highlighted positive momentum in the bank’s markets division and said Bank of America has provided more capital to its businesses and returned 40% more capital to shareholders in the first half of 2025 compared to last year.

In the fourth quarter, Bank of America expects a net interest income of $15.5 billion to $15.7 billion.

Despite a 24% gain in the last three months, Bank of America’s stock is up 5% year-to-date. Global markets have swung wildly since U.S. President Donald Trump announced tariffs on international trading partners in April. That volatility has boosted the markets businesses at Bank of America and other Wall Street firms, as heightened client activity has driven revenue, even as hopes for a strong rebound in mergers and acquisitions have fallen short, Bloomberg reported on Wednesday.

Price Action: BAC stock is trading higher by 1.41% to $46.80 premarket at last check Wednesday.

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