Strong trading and digital banking growth push Bank of America Q1 2025 profit to $7.4bn

How did Bank of America perform in Q1 2025?

Bank of America Corporation reported net income of $7.4 billion for the first quarter of 2025, up from $6.7 billion in the same period last year. Earnings per diluted share climbed to $0.90, compared to $0.76 in Q1 2024. Total revenue increased 6% year-on-year to $27.4 billion, supported by improved net interest income and trading-related gains.

Chair and Chief Executive Officer Brian Moynihan attributed the performance to consumer resilience, stable business activity, and disciplined execution across the bank’s diversified operations. He noted that investments made in digital infrastructure and client engagement continued to yield results, even amid potential shifts in the broader economy.

What drove Bank of America’s Q1 2025 profit increase?

Net interest income (NII) reached $14.4 billion on a GAAP basis and $14.6 billion on a fully taxable-equivalent basis, marking a 3% year-on-year increase. This was driven by lower deposit costs, higher fixed-rate asset yields, and sustained momentum in Global Markets. The quarter saw one fewer accrual day compared to Q1 2024, yet the bank managed to grow NII, reflecting balance sheet strength and disciplined rate risk management.

Noninterest income rose to $12.9 billion from $11.8 billion a year earlier, bolstered by fee growth in asset management, payment services, and investment banking. Sales and trading revenue alone reached $5.7 billion, with equities trading setting a record at $2.2 billion, up 17% year-on-year.

How are Bank of America’s core business segments performing?

Consumer Banking delivered $2.5 billion in net income with revenue of $10.5 billion, up 3% year-over-year. Card spending increased 4% to $228 billion. Average loans and leases rose modestly to $315 billion, while digital adoption set a new high, with 49 million digital banking users generating over 4 billion logins. Digitally-enabled sales comprised 65% of total sales for the quarter.

Global Wealth and Investment Management generated $1.0 billion in net income on $6.0 billion in revenue, up 8%. The segment benefited from strong asset flows and higher market valuations, pushing total client balances to $4.2 trillion. AUM rose 7% to $1.9 trillion. Merrill added 6,400 new households, while the Private Bank added nearly 300 high-net-worth relationships.

Global Banking reported $1.9 billion in net income on flat revenue of $6.0 billion. While investment banking fees slipped 3% to $1.5 billion, the bank recorded higher treasury service charges and loan growth in the middle-market segment. Average deposits rose 9% to $575 billion.

Global Markets also posted $1.9 billion in net income, with revenue up 12% to $6.6 billion. FICC trading generated $3.5 billion in revenue, while equities trading reached an all-time high. The segment has now recorded 12 consecutive quarters of year-over-year revenue growth.

What are the credit trends and risk metrics showing?

Provision for credit losses stood at $1.5 billion, in line with the previous quarter but up from $1.3 billion in Q1 2024. Total net charge-offs remained flat at $1.5 billion, keeping the net charge-off ratio stable at 0.54%. Credit card delinquencies declined compared to Q4 2024, although charge-off rates increased slightly to 4.05%.

The allowance for loan and lease losses remained at $13.3 billion, accounting for 1.20% of total loans. Nonperforming loans increased slightly to $6.1 billion, while the total allowance for credit losses stood at $14.4 billion.

How solid is the bank’s capital and liquidity position?

Bank of America ended Q1 2025 with $1.99 trillion in deposits and $1.09 trillion in average loans. The Common Equity Tier 1 (CET1) capital under the Standardized approach was $201.2 billion, resulting in a CET1 ratio of 11.8%, above regulatory minimums. The tangible book value per share rose 9% year-on-year to $27.12.

The bank returned $6.5 billion to shareholders, comprising $2.0 billion in dividends and $4.5 billion in share repurchases. Book value per common share rose 8% year-on-year to $36.39.

Is digital banking still a growth engine?

Digital engagement remains a cornerstone of Bank of America’s operational strategy. The bank reported a record 4 billion digital logins in the quarter. Zelle usage grew 23% year-on-year to $130 billion in transaction volume, while digitally-enabled client interactions continued to rise across both retail and private wealth segments.

In the Private Bank, 93% of relationships are now digitally active, and in Merrill, 87% of clients interact digitally, with nearly 80% of eligible accounts opened through digital onboarding.

What does the stock performance suggest about investor sentiment?

Following the earnings release, shares of Bank of America Corporation (NYSE: BAC) closed at $37.99 on April 15, 2025—up 3.6% from the previous close of $36.67. This gain reflects positive investor reaction to stronger-than-expected Q1 earnings, especially the performance of trading and digital segments.

Despite the Q1 rally, BAC stock has faced headwinds in April due to broader market concerns, including heightened geopolitical risk and tariff-related volatility. The stock remains down about 12.4% from early April highs, largely tied to macroeconomic fears triggered by the announcement of broad-based U.S. tariffs.

Analysts have issued mixed guidance. Some forecast a price target range between $40.69 and $54.13 for year-end 2025, citing a low price-to-earnings (P/E) ratio of 10.88 as a signal of undervaluation. Others urge caution amid global macroeconomic headwinds and evolving regulatory pressures.

Given its solid capital ratios, consistent earnings, and digital momentum, BAC remains a “hold” for investors awaiting further macro clarity. For long-term portfolios, current levels may present a reasonable entry point, particularly for income-focused investors drawn to its dividend yield.

What lies ahead for Bank of America?

Bank of America’s diversified business lines, steady digital innovation, and focus on credit quality position it well to navigate a potentially volatile economic environment. While continued deposit growth and trading strength offer near-term support, analysts will closely watch loan performance, interest rate movements, and credit trends in the quarters ahead.

With a CET1 ratio above 11.8%, strong liquidity, and increasing returns to shareholders, the bank appears structurally sound heading into mid-2025. However, broader investor sentiment will remain tied to policy shifts, inflation indicators, and geopolitical risks that could impact revenue composition and margin dynamics across the industry.