Bank of America predicts record net interest income in 2025

UPDATE: This article includes quotes from CEO Brian Moynihan and CFO Alastair Borthwick, as well as new details on Bank of America’s guidance for 2025.

Bank of America expects its net interest income to reach unprecedented heights next year, the nation’s second-largest bank said as it unveiled its earnings for the fourth quarter of 2024.

“We should report record NII in 2025,” CEO Brian Moynihan said in a conference call with analysts on Thursday.

In the final three months of 2024, the bank’s net interest income reached $14.5 billion, up from $14.09 billion in the fourth quarter of 2023. In its guidance for next year, Bank of America expects that growth to reach $15.5 billion to $15.7 billion in the fourth quarter of 2025 — an increase of about 7%.

CFO Alastair Borthwick said the bank’s confidence in its forecast has a lot to do with deposits, which he said have stabilized since the COVID-19 pandemic and its aftermath.

“There was a period there where deposit balances were declining as people got back to something more normal in their accounts,” Borthwick said. “But … consumer [banking] found its floor in August, wealth [management] found its floor in July, and that’s giving some support then as we grow deposits. That’s helping us with the NII growth.”

Average deposits at Bank of America reached $1.96 trillion in last year’s fourth quarter, up 3% from the same period in 2023. This marks the sixth consecutive quarter of growth for the bank’s deposits.

Another encouraging factor, Borthwick said, is loans. Average loans and leases at Bank of America rose to $1.08 trillion in the last three months of 2024, an increase of 3% year on year.

“Those two things — a little more confidence around deposit growth, a little more confidence around loan growth — those obviously compound through the course of the year,” Borthwick said. “So that will help us in the back half of ’25.”

A strong end to 2024

Bank of America exceeded Wall Street’s expectations last quarter, fueled by rising fee income from its wealth management and investment banking units.

From October through December 2024, net income for America’s second-largest bank reached $6.7 billion, up from $3.1 billion in the year-ago period.

Diluted earnings per share were 82 cents, surpassing analysts’ average estimate of 77 cents according to S&P. Revenue reached $25.3 billion, barely above analysts’ estimates of $25.1 billion.

“We finished 2024 with a strong fourth quarter,” Moynihan said in a statement on Thursday. “Every source of revenue increased, and we saw better than industry growth in deposits and loans. … We believe this broad momentum sets up 2025 very well for Bank of America.”

The megabank said this growth was largely thanks to fee income from two departments: Global Wealth and Investment Management, which saw its fees rise 23% year on year, and Global Banking, whose fees jumped 44%.

During the conference call, Borthwick called Global Banking “the most efficient business in the company.”

“The business saw a nice rebound in investment banking fees in 2024, which we expect to continue in 2025,” he said.

Overall, the year-on-year improvement is in some ways not surprising. In the fourth quarter of 2023, Bank of America — along with its peers — was hit with a special assessment from the Federal Deposit Insurance Corp., stemming from that year’s regional bank crisis. It also suffered a plunge in net interest income as the Federal Reserve hiked rates to historic highs.

As 2025 begins, the bank’s leadership says economic conditions are much more favorable.

“Asset quality is healthy, and client spending continued to grow at a moderate pace, reflecting a solid economic environment,” Borthwick said. “Looking towards 2025, we remain focused on delivering for our shareholders while supporting our clients’ growth and driving market share.”

An old-school strategy

For Bank of America, the fourth quarter also saw the return of building more brick-and-mortar branches. The bank said in September that it planned to open 165 more locations by the end of 2026, including 40 in 2024.

The plan marks a reversal from years of focusing on digital banking, a shift that began more than a decade ago and was accelerated by the COVID-19 pandemic. From 2010 to mid-2024, Bank of America reduced its total branch count by almost 40%.

But as the COVID crisis recedes into history, many of the changes it brought to banking — including remote work — are beginning to fade as well. And it’s not just Bank of America; JPMorgan and Wells Fargo have also been opening new branches in areas where their footprint is small.

Bank of America has said offering both digital and physical interfaces for customers is an important part of its strategy, not only for banking but for wealth management.

“It’s been a critical element of our consumer strategy to have both a real commitment to industry-leading technology and digital capabilities as well as financial centers that are driving advice and guidance for our clients,” Aron Levine, president of preferred banking at Bank of America, told American Banker in September.