Bank of America’s Net Interest Income Outlook Gets a Boost
In an impressive turn of events, Bank of America (BofA), the second-largest bank in the United States, has revised its guidance for net interest income (NII) upward. This revision follows a successful quarter that surpassed Wall Street predictions. According to Alastair Borthwick, the bank’s Chief Financial Officer, the bank is expecting the fourth-quarter NII to be between $15.6 and $15.7 billion, a slight increase from the previously projected range of $15.5 to $15.7 billion.
Excellent Quarterly Performance
The third quarter of 2025 ended positively for BofA, with its NII reaching $15.2 billion, a notable 9% increase from the same period in 2024. The bank anticipates this growth trend to continue, driving the revised guidance. The bank reported a robust 23% jump in net income, amounting to $8.5 billion — a figure that comfortably surpassed analysts’ consensus estimate of $7.08 billion, according to S&P. Furthermore, BofA’s earnings per share stood at $1.06, outpacing predictions of $0.95.
Factors Contributing to NII Improvement
Several factors contributed to the bank’s NII improvement, including increased loan and deposit balances. The bank reported that average loans reached $1.15 trillion in the third quarter, representing a 9% increase from the previous year. Similarly, average deposits rose to $1.99 trillion, marking a 9% year-over-year increase.
Another significant factor contributing to the NII improvement was the easing of uncertainty surrounding U.S. trade policy. BofA executives noted that this development allowed commercial clients to make longer-term investment decisions, opening up more lending opportunities for the bank.
Analysts’ Perspectives
The bank’s third-quarter performance received positive reviews from several analysts, who described it as steady and reliable. Glenn Schorr of Evercore ISI termed it a “clean” print, while Steven Alexopoulos of TD Cowen referred to it as “a solid across-the-board quarter.”
Rising Revenue and Fee Income
BofA’s total revenue rose to $28.1 billion in the third quarter, exceeding analysts’ forecasts of $27.46 billion and representing an 11% increase from the same period last year. A significant part of this surge in revenue was due to the rising fee income. Investment banking fees swelled to $2.01 billion, up 43% from the same period in 2024, while asset management fees rose to $3.97 billion, a 12% year-over-year increase.
Focus on Organic Growth
BofA has consistently emphasized organic growth as a critical part of its business strategy over the past decade. The bank has invested more than $5 billion in its branch network since 2016, opening new locations and renovating existing ones. The bank plans to open 165 new branches by the end of 2026, with 40 expected to be opened this year.
Legal constraints, such as the law that bars the bank from making acquisitions once it controls more than 10% of the nation’s total deposits, have led to this focus on branch openings. Therefore, the bank has been expanding its branch network in several U.S. markets to grow its deposit base.
“Organic growth is the reality,” CEO Brian Moynihan said during BofA’s second quarter earnings call in July. “We’re continuing that push — the ‘expansion markets,’ we call them — and we’re seeing success there.”
As the Bank of America continues to surpass expectations and deliver solid results, it stands as a testament to its financial robustness and strategic growth initiatives. With an optimistic outlook and a commitment to organic growth, it continues to be a leader in the banking sector.
For more details on Bank of America’s performance, click here.
