Bank of America NII Climbs for Seventh Straight Quarter as Trading Surges
Net interest income reached $16.2 billion, up 9% year-over-year, as fixed-rate assets repriced and loan balances expanded across every business line.
Bank of America (BAC) posted $16.2 billion in net interest income on a fully taxable-equivalent basis in the second quarter, a 9% year-over-year gain and a $300 million sequential increase from the first quarter, extending a streak of quarterly NII growth to seven. The largest U.S. bank by assets attributed the expansion to higher loan and deposit balances, fixed-rate asset repricing, and elevated activity in its Global Markets division, which more than offset the drag from lower interest rates.
The markets franchise delivered the quarter's most dramatic acceleration. Sales-and-trading revenue reached $7.1 billion, up 33% year-over-year, marking the seventeenth consecutive quarter of annual growth. Equities revenue alone surged 70% to $3.6 billion, driven by derivatives and cash trading in Asia and the U.S., a sharp step-up from the 30% pace recorded in the first quarter. The division's efficiency ratio tightened to 56% from 64% a year earlier, pushing return on allocated capital to 20%.
Investment-banking fees reinforced the capital-markets story. Excluding self-led deals, fees jumped 50% year-over-year to $2.1 billion, accelerating from 21% growth in the prior quarter, with strength spanning debt underwriting, advisory, and equity issuance. The surge helped lift total corporation revenue 15% year-over-year to $31.6 billion, the fastest pace in four quarters, and drove diluted earnings per share to $1.21, up 34%.
On the lending side, average loans and leases grew 8% year-over-year to $1.22 trillion, the ninth consecutive quarter of sequential average expansion. Global Wealth and Investment Management led with 14% growth to $270 billion, while Global Banking loans rose 7% to $413 billion. Average deposits increased 2% year-over-year to $2.02 trillion, with Global Banking deposits up 8% to $652 billion.
Credit quality continued to normalize. The net charge-off ratio fell to 0.47%, down 8 basis points from a year earlier and 1 basis point sequentially. Credit card charge-offs improved to 3.55% from 3.82% in the year-ago quarter, with early- and late-stage delinquency rates declining for the fifth straight quarter on a year-over-year basis. Provision for credit losses totaled $1.4 billion, a $226 million decrease from a year earlier, and included a net reserve release of $46 million compared with a $67 million build in the second quarter of 2024. Nonperforming loans fell to $5.8 billion, down $230 million year-over-year, while commercial criticized utilized exposure shrank $5.8 billion to $22.1 billion.
Consumer Banking net income rose 10% to $3.3 billion on revenue of $11.3 billion, up 5%, with provision expense declining 10% as the segment released reserves rather than building them. In Global Wealth and Investment Management, asset-management fees climbed 19% to $4.4 billion, reflecting higher market valuations and solid AUM flows, pushing total segment revenue to $6.9 billion, up 16%.
Operating leverage widened across the franchise. The corporate efficiency ratio improved 359 basis points year-over-year to 59%, with operating leverage of 6.6 percentage points. The company returned $8.0 billion to shareholders through $6.0 billion in buybacks and $2.0 billion in dividends, down from $9.3 billion in the first quarter. The CET1 ratio held at 11.2% on a standardized basis, flat sequentially but 30 basis points below a year earlier as risk-weighted assets grew faster than capital; CET1 capital itself increased $1.9 billion quarter-over-quarter to $201.6 billion.