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Following in the footsteps of JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC), each of which issued better-than-expected Q4 earnings yesterday, Bank of America (BAC) delivered its own upside Q4 results earlier this morning, adding to the string of solid results from the banking industry. Similar to these three main competitors, BAC capitalized on the stronger conditions in the M&A and IPO markets, as well as the favorable trading backdrop for both equities and fixed income products. Unlike JPM and WFC, though, BAC generated positive net interest income (NII) growth in Q4 at +3% to $14.4 bln, beating expectations, despite lower rates and a consumer shift towards higher-yielding assets.

This outperformance was driven by relatively stronger average loan and deposit growth of 3% for both metrics, compared to loan growth of 2% and a 4% drop in deposits for JPM. Additionally, each of BAC's business segments generated top-line growth in Q4, led by the Global Markets unit, which saw revenue climb higher by 18% yr/yr to $4.8 bln.

• Bolstered by ongoing strength in credit products, FICC trading revenue jumped by 19% to $2.5 bln, while equity trading revenue increased by 7% to $1.6 bln as record highs in the stock market drove higher client activity.
• Meanwhile, the Global Banking segment posted more modest growth of 3%, even as investment banking fees surged by 44% to 1.7 bln and as BAC picked up 116 bps in market share. Impeding the segment's growth was an 8% decrease in business lending revenue and flat growth for global transaction services.
• As anticipated, Global Wealth & Management was a standout performer in Q4, thanks to the stock market setting record highs during the quarter. High market levels and healthy client flows of capital helped push revenue higher by 15% to $6.0 bln. Assets under Management (AUM) flows surged by 168% yr/yr to $22.5 bln, resulting in total AUM balances of $1.5 trillion.
• In Consumer Banking, elevated interest rates provided a lift as average loans and leases edge up by 1% to $316 bln. Amid the elevated rate environment, BAC's customers still spent money at a healthy clip in Q4 with combined credit/debit spending up by 5% to $241 bln. However, net charge-offs did increase by nearly 23% yr/yr to $1.2 bln, reflecting the negative impact of higher interest rates.

The bottom line is that BAC executed well in a choppy environment in Q4 and that the company entered 2025 with momentum on its side. Accordingly, BAC issued solid NII guidance, forecasting NII to grow sequentially in FY25 to $15.5-$15.7 bln in Q4 from $14.5-$14.6 bln in Q1.