Bank of America Corp Earnings - Q4 2025 Analysis & Highlights
Bank of America Corp.'s Q4 2025 earnings call highlighted strong financial performance, with significant growth in net income and EPS, driven by robust revenue growth and disciplined expense management. The company saw solid contributions from its diverse business segments, particularly in Consumer Banking, Wealth Management, and Global Markets, while maintaining strong asset quality and returning substantial capital to shareholders. Management also provided a positive outlook for 2026, anticipating continued NII growth and operating leverage, supported by organic growth strategies and technological advancements.
Key Financial Results
Bank of America reported a net income of $7.6 billion for the fourth quarter, an increase of 12% from the fourth quarter of 2024.
EPS was $0.98 per share, an 18% increase from the fourth quarter of 2024.
Revenue growth was 7% year-over-year.
Net interest income (NII) improved by 10% to $15.9 billion on an FTE basis.
Operating leverage of 330 basis points was delivered in Q4.
For the full year 2025, revenue was over $113 billion, up 7% year-over-year.
Net income grew 13% year-over-year.
EPS grew 19% to $3.81.
Return on tangible common equity improved to 128 basis points.
Return on assets improved to 89 basis points.
Business Segment Results
Consumer Banking
Consumer Bank generated $44 billion in revenue and $12 billion in net income for the full year.
Net income grew 14% from 2024, with a 28% return on allocated capital.
In Q4, Consumer Banking delivered $11.2 billion in revenue, up 5% year-over-year, and $3.3 billion in net income, up 17%.
Efficiency ratio improved to 51%, delivering nearly 350 basis points of operating leverage.
Consumer investment balances grew $81 billion from Q4 2024 to nearly $600 billion.
Average balance per investment account was $147,000, up 12% from last year.
Credit card net charge ratio improved nearly 40 basis points from Q4 2024 to 3.4%.
Wealth Management
Full-year revenue was $25 billion, up 9% compared to 2024.
Net income grew 10% to nearly $4.7 billion.
Q4 net income was $1.4 billion, with return on allocated capital at 28%.
Client balances grew $500 billion across the year to $4.8 trillion.
Ending loan growth was nearly $30 billion, or 13%.
AUM flows were $82 billion, and total flows were $96 billion.
Merrill and the Private Bank added 21,000 net new relationships during the year.
Global Banking
Generated $7.8 billion in earnings for the year, representing about 25% of the company's overall net income.
Average deposits increased $71 billion, or 13%.
Loans grew $12 billion.
Q4 net income was $2.1 billion, down 3% year-over-year.
Efficiency ratio was 50%, with a 16% return on allocated capital.
Investment banking fees were $1.67 billion in Q4, up modestly over Q4 2024.
Global Markets
Produced a record year of revenue, improved earnings, and solid returns.
Generated $24 billion in revenue for the year, exceeding last year's revenue by 10%.
Earnings of $6.1 billion for the year were up 8%, with a 13% return on allocated capital.
Q4 net income was just shy of $1 billion, up 5% from Q4 2024.
Revenue ex-DVA grew 10% year-over-year, driven by strong sales and trading performance.
Equities trading led the improvement, growing 23%.
FICC revenue grew 1%.
Capital Allocation
Distributed 41% more in capital back to shareholders, totaling more than $30 billion.
Returned $8.4 billion of capital back to shareholders in Q4, with $2.1 billion in common dividends paid and $6.3 billion of shares repurchased.
Average diluted share count was reduced by about 300 million shares, or 4%, from Q4 2024.
Tangible book value per share of $28.73 rose 9% from Q4 2024.
Industry Trends and Dynamics
Investment banking fees for the full year were the highest since 2020, up 7% from the prior year.
Fees generated in the second half of 2025 were 25% greater than the first half, showing good momentum.
This momentum was attributed to corporate commercial clients settling in after tax policy became clear, tariffs became more understood, and they received the benefits of deregulation.
Macroeconomic Environment
The economy in 2025 was described as a "pretty good, decent environment".
Consumer spending grew 5% to $4.5 trillion over 2024 levels.
Account balances in the consumer business were stable through the year.
Delinquencies and charge-offs improved in 2025 consumer credit.
Unemployment remained stable.
Equity market appreciation benefited consumers and investors.
Corporate commercial customers had a good year with good profits, credit quality, and money movement activity.
The global growth rate for GDP is projected at 3.4% in 2026, with the US at 2.6%.
Risks remain, but the outlook for the year ahead is encouraging and constructive.
Growth Opportunities and Strategies
Grew net new consumer checking accounts by 680,000 during the year, maintaining a strong average balance of $9,000-plus.
Crossed over $6.5 trillion in client balances across Wealth and Consumer Banking.
Consumer investment totals reached $600 billion.
Workplace benefits totals crossed over $600 billion.
$28 billion of year-over-year loan growth came through Wealth Management clients.
Global Wealth and Investment Management showed improved nominal profit growth, stronger pre-tax margin improvement, and drove $100 billion in net new assets.
Global Markets saw continued growth in sales and trading, with its 15th consecutive quarter of improvement, driving a record year of nearly $21 billion in sales and trading revenue.
Focus on digital deployment and activation statistics, including the impact of Zelle and Erica (AI agent).
AI techniques have reduced the coding part of the stream for introducing new products or services by 30%, saving about 2,000 people.
Headcount is expected to come down during 2026 through operational excellence and new technologies.
Financial Guidance and Outlook
NII growth is expected to be 5% to 7% in 2026 compared to 2025, based on the latest interest rate curve, which includes two rate cuts in 2026.
Q1 NII is expected to grow roughly 7% from Q1 2025.
Operating leverage of about 200 basis points is expected in 2026.
Q1 expenses are expected to be about 4% higher than Q1 2025.
Effective tax rate for 2026 is expected to be roughly 20%.
Loan growth is projected in the mid-single-digits for 2026.
Through-the-cycle net charge-off ratio is estimated at 50 to 55 basis points.
Consumer deposit growth could reach GDP to GDP plus levels (4% to 5%) in the future.
