Bank of America (NYSE:BAC) delivered stronger-than-expected third-quarter results, driven by solid net interest income and a sharp rise in investment banking fees, as dealmaking activity rebounds from earlier weakness tied to tariff uncertainty. Shares climbed more than 5% in U.S. premarket trading on Wednesday following the release.
The bank reported a 43% increase in investment banking fees to more than $2 billion, helping push revenue in its global banking unit up 7% to $6.2 billion. The rebound comes as Wall Street sees renewed momentum in capital markets after a period of slower activity earlier this year.
Revenue from the global wealth and investment management division also grew 10% to $6.3 billion, supported by higher asset management fees and client balances — a trend tied to recent gains in stock market valuations.
Group-wide net interest income rose 9% year over year to $15.23 billion, topping analyst forecasts of $15.03 billion. The bank projected Q4 net interest income between $15.6 billion and $15.7 billion, implying an 8% annual increase, roughly in line with expectations.
Total revenue net of interest expense came in at $28.1 billion, while diluted earnings per share climbed to $1.06, both exceeding analyst estimates.
The bank also highlighted its robust capital return strategy, noting it returned $7.4 billion to shareholders through a combination of stock dividends and share repurchases. Analysts expect more clarity on buybacks and capital allocation at its upcoming investor day in November.
“[T]his is a solid report, and the big standout numbers include efficiency, loan growth, investment banking fees, and equities trading. There’s nothing really ’bad.’ and the only issue for the stock will be whether the [roughly] 2.5% rally on Tuesday already anticipated some of this earnings strength,” analysts at Vital Knowledge wrote in a note.
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