Bank of America topped estimates for first-quarter profit as interest income grew and volatile markets helped its stock traders rake in a record haul.
As markets whipsawed around U.S. President Donald Trump’s tariff policies, BofA brought in 9% higher trading revenue, mirroring trends seen at rivals.
“Though we potentially face a changing economy in the future, we believe the disciplined investments we have made for high-quality growth, our diverse set of businesses and the team’s relentless focus on responsible growth will remain a source of strength,” CEO Brian Moynihan said in a statement.
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Equities trading jumped 17% to a record $2.2 billion, while fixed income, currencies and commodities jumped 5% 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,” Chief Financial Officer Alastair Borthwick said on a call with reporters.
“Still, our research team at this point does not believe we will see a recession and our clients continue to show encouraging signs. Employment is obviously healthy and consumers have proven resilient.”
Rivals JPMorgan Chase and Goldman Sachs have also reported stronger performance from their trading businesses.
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“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 (mergers and acquisitions) and IPO (initial public offering) deal volume could doom a 2025 recovery if tariff turmoil is not resolved soon.”
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BofA’s earnings were $7.4 billion, or 90 cents per share, in the quarter ended March 31, it said on Tuesday. That compares with $6.7 billion, or 76 cents per share, a year earlier.
Analysts were expecting a profit of 82 cents per share, according to estimates compiled by LSEG.
MAINTAINS NII FORECAST
The second largest U.S. lender’s net interest income (NII) — the difference between what it earns on loans and pays out on deposits — grew 3% to $14.4 billion, partially helped by lower deposit costs.
It maintained its NII forecast of $15.5 billion to $15.7 billion for the fourth quarter. Interest-rate cuts last year had helped improve sentiment among borrowers, benefiting banks such as BofA, which had forecast record net interest income in 2025 before Trump unveiled the new tariffs.
Shares rose 1.6% to $37.25 before the bell. They have fallen 12.4% since the tariffs were unveiled earlier this month.
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Fears sparked by the tariffs have alarmed investment bankers globally, prompting dealmakers who were once bullish on Trump’s policies to adopt to a wait-and-watch approach.
BofA’s investment banking fees fell 3% to $1.5 billion in the first quarter. In the first three months of 2025, U.S. M&A activity fell 13%, according to data from Dealogic.
Provisions for credit losses were $1.5 billion, higher than $1.3 billion from a year earlier.