Bank of America Corporation Q2 FY2025 earnings call

Key managerial messages include: Revenue growth driven by strong organic growth across businesses. Continued investment in technology innovation, including AI and machine learning, with Erica AI assistant averaging over 58 million interactions per month. High digital engagement with nearly 80% of consumer households fully digitally engaged, 4 billion logins in Q2, and 65% of consumer product sales digital. Improving credit quality except for CRE office, with most charge-offs previously reserved. Capital return with $5.3 billion in share repurchases and $2 billion in dividends in Q2, totaling $13.7 billion in H1 2025.

Bank of America reported revenue of $26.6 billion in the second quarter, with net income of $7.1 billion and earnings per share of $0.89. Net Interest Income (NII) was a record $14.8 billion, growing 7% year-over-year. Market-related revenue was up 15% year-over-year for the 13th consecutive quarter of sales and trading growth. Investment banking fees were over $1.4 billion. Expenses were below $17.2 billion, $600 million lower than Q1 2025. Net charge-offs were around $1.5 billion for the sixth consecutive quarter, with consumer net charge-offs lower but elevated commercial real estate office charge-offs. Average deposits grew for 8 consecutive quarters. In Consumer Banking, primary checking accounts grew, average consumer deposits for 3 quarters, and average checking account balance over $9,200. Wealth and Investment Management had client balances at $4.4 trillion. Global Banking had solid client activity and added over 1,000 net new clients. Global Markets had record second quarter sales and trading revenue.

Management expects continued NII growth with operating leverage kicking in. Expenses are expected to be flat or slightly decreasing, influenced by revenue-related growth. The NII bridge considers various factors like international rates and loan growth, but expects NII to continue growing. Anticipates benefits from fixed rate asset and cash flow swap repricing in the second half and next year.

Elevated commercial real estate office charge-offs. Headwinds from international rate cuts not included in NII bridge. Impact of regulatory and model changes like G-SIB calibration and RWA calculations on capital requirements and business growth.

Q: About retail deposit progress. How to measure and ambitions?

A: Brian Moynihan said Consumer business has $950B in deposits, cost of deposits under 146bps, grew deposits faster than industry, average checking account balance up, consumer satisfaction high.

Q: Expense outlook for second half?

A: Alastair Borthwick said headcount disciplined, expense growth revenue-related, likely flattish with seasonally slower activity in Q4.

Q: NII guide not higher given loan growth?

A: Alastair Borthwick said NII bridge considers various factors, international rates headwind, and expects NII to continue growing with organic growth.

Q: AI adoption and scale?

A: Brian Moynihan said AI application at scale enabled growth, Erica AI with 58M+ interactions, and continues to invest in AI for productivity and client experience.

Q: Deregulatory momentum and capital buffer?

A: Brian Moynihan said target buffer 50bps, working to reduce capital buffer, and businesses will use capital to grow.