Bank of America trading revenue surges, beats profit expectations
Bank of America outperformed estimates for first-quarter earnings as interest income climbed and volatile markets helped its stock traders earn a record profit.
Strong Trading Performance Drives Q1 Earnings
Bank of America (BofA) reported a 9% increase in trading revenue, outperforming expectations amid market volatility driven by U.S. President Donald Trump’s shifting tariff policies. This mirrors trends seen at other major banks, including JPMorgan Chase and Goldman Sachs.
Equities trading jumped 17% to a record $2.2 billion, while fixed income, currencies, and commodities saw a 5% rise to $3.5 billion.
“These results were sustained by an economy growing at a moderate pace and the client concerns over trade policy and recent market turmoil,” said Chief Financial Officer Alastair Borthwick.
No Recession in Sight, Says BofA
Despite market volatility, BofA leadership remains optimistic.
“Though we potentially face a changing economy in the future, we believe the disciplined investments we have made for high-quality growth… will remain a source of strength,” said CEO Brian Moynihan.
Borthwick echoed that sentiment, noting that employment remains strong and consumers have shown resilience.
“Our research team does not believe we will see a recession,” he added.
Q1 Earnings Beat Analyst Estimates
For the quarter ended March 31, BofA reported:
- Earnings: $7.4 billion, or 90 cents per share
- Compared to: $6.7 billion, or 76 cents per share a year ago
- Analyst expectations: 82 cents per share (per LSEG)
Analysts Warn of Deal-Making Slowdown
While trading revenue stood out, analysts cautioned that a slump in M&A and IPO activity could cloud the outlook if trade tensions continue.
“As we’ve seen with other banks, trading results were the star of the show,” said Stephen Biggar, banking analyst at Argus Research.
“Still, a collapse in M&A and IPO deal volume could doom a 2025 recovery if tariff turmoil is not resolved soon.”
Net Interest Income Holds Steady
BofA’s net interest income (NII) — the difference between interest earned on loans and paid on deposits — rose 3% to $14.4 billion, boosted by lower deposit costs. The bank maintained its Q4 NII forecast of $15.5–$15.7 billion.
BofA previously expected record NII in 2025, though Trump’s new tariff measures may still pose challenges.