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Bank of America Caps Off 2024 with Robust Earnings

January 16, 2025

Retail investors, take note: Bank of America (BofA) navigated a dynamic economic landscape with impressive results for Q4 and the full fiscal year 2024. The earnings release sheds light on the bank's resilience and strategic initiatives, positioning it well for continued growth in 2025.

Solid Financial Performance

In Q4, Bank of America reported a net income of $6.7 billion, equating to $0.82 earnings per share (EPS). For the entire year, the bank generated $102 billion in revenue and a net income of $27.1 billion, translating to an EPS of $3.21. These figures highlight BofA's ability to achieve profitable growth even with economic headwinds.

Key Financial Metrics:

  • Return on Assets: 83 basis points
  • Return on Tangible Common Equity: 13%
  • Liquidity: $953 billion as of year-end
  • Regulatory CET1 Capital: $201 billion with a CET1 ratio of 11.9%

These results reflect a robust balance sheet that aligns with steady economic expansion, characterized by GDP growth around 2-3% and stable employment levels.

Strategic Business Growth

The bank's diverse revenue streams paint a picture of balanced growth across its different business lines. BofA achieved revenue improvements year-over-year in every category during Q4, driven by both loan and deposit growth. Consumer loans increased steadily, and commercial loan demand accelerated, particularly in sectors outside of commercial real estate.

Business Segment Highlights:

  • Wealth Management: Added 24,000 new households, achieving $6 trillion in total client balances.
  • Investment Banking: Gained industry revenue share with a 44% revenue growth year-over-year.
  • Sales and Trading: Marked an 11th consecutive quarter of year-over-year revenue growth.

Furthermore, digital engagement has continued to expand, with over 14 billion platform logins throughout 2024, demonstrating the effectiveness of BofA's investments in technology and customer experience.

Forward-Looking Growth

Heading into 2025, Bank of America is setting the stage for continued success with expectations of record-setting net interest income (NII). The bank forecasts NII growth could reach 6-7% higher in 2025 than in 2024, supported by ongoing loan and deposit growth, as well as favorable asset repricing dynamics.

Additionally, BofA plans to manage its expenses prudently, targeting a moderate 2-3% increase in 2025. This strategic approach combines expanding revenue with disciplined cost control to further enhance profitability.

Navigating Risk and Regulation

While the outlook remains positive, potential curveballs could come from macroeconomic shifts, global geopolitical tensions, or regulatory changes. Despite these uncertainties, BofA's robust balance sheet and strategic focus on sustained growth present a solid defense.

CEO Brian Moynihan emphasizes that while no business faces capital constraints for growth, the bank remains vigilant about industry-wide regulatory considerations, including capital requirements and the potential for more favorable rules that could unlock additional shareholder value.

The Bottom Line

Bank of America ends 2024 on a strong note, delivering solid earnings and operational growth. With a balanced approach to risk management, strategic investments in digital capabilities, and a keen eye on future regulatory landscapes, BofA stands poised to navigate the challenges and opportunities that 2025 may bring. For retail investors, the bank's trajectory suggests a calculated mix of innovation and stability, potentially offering sustainable value moving forward.