Bank of America Corporation
Financials · Diversified Banks
Universal-bank rate-sensitivity proxy with the cleanest retail-deposit funding stack in the cohort. ~$2T retail deposits anchor a low-cost liability book; NII is the swing factor as the long-duration AFS securities portfolio rolls off at par into higher-yielding paper through 2027.
9T client balances. Global Markets has stabilized as a top-3 FICC/equities franchise. 26 dividend + buyback) constrained by CET1 + Basel III Endgame final rule.
- NII inflection: low-coupon securities ($300B+) repricing higher 2026-2027 = mechanical EPS tailwind
- Deposit beta lowest in big-4 (~35% cumulative vs JPM ~45%) - retail stickiness from $0 minimums + Preferred Rewards
- GWIM operating leverage: $3.9T client balances, fee income grows with equity markets without balance-sheet usage
- Capital return resumes scale once Basel III Endgame ruleset finalizes
- CRE office exposure (~$60B commercial real estate, ~17% office); reserves built but tail risk if regional vacancy worsens
- Held-to-maturity unrealized losses (~$100B mark) cap tangible book optionality; AOCI bleed if long end backs up
- Consumer credit normalization: card net charge-offs trending toward 4%+ as cohort lapses post-stimulus excess savings
- Regulatory: Basel III Endgame + GSIB surcharge re-tier risk could lift required CET1 100-150bps
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