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Bank of America helps households and businesses manage money and borrow, with most of its revenue coming from the United States. Consumer and small-business banking is its largest business. Customer deposits fund much of its lending, and it also holds interest-paying securities. The interest it receives, less what it pays for deposits and other funding, supplies slightly more than half of its revenue.
The rest comes largely from client fees and trading. Investors pay for investment management and brokerage services; companies pay for help raising capital and financial advice. Institutional clients also use the bank to trade securities, obtain financing and manage financial exposures. These businesses make Bank of America more than a consumer lender: investment and brokerage services are its largest source of fee income.
Earnings depend on the cost and availability of deposits and other funding, borrowers repaying their loans, and clients’ investment and trading activity. Interest rates affect both funding costs and asset income. Capital and liquidity rules constrain how the bank uses funds and distributes earnings. The listed parent depends on payments from its subsidiaries, and legal and regulatory limits can restrict transfers to it.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
JPMorgan Chase challenges Bank of America across U.S. consumer banking, business lending, investment banking and managing clients’ money. Its consumer banking and asset-and-wealth-management results offer comparisons for Bank of America’s household and investment clients.
Wells Fargo competes with Bank of America nationwide for consumer deposits, home loans, business lending and wealth clients. Its deposit and mortgage business offers a focused comparison for Bank of America’s U.S. consumer bank.
Citigroup competes with Bank of America to lend to companies and consumers, handle institutional securities transactions and manage wealth. Citi’s Markets revenue is a useful comparison for Bank of America’s business serving institutional investors.
Morgan Stanley competes with Bank of America’s Merrill business to manage individuals’ money, and with its institutional businesses to help clients raise capital, advise them and trade securities. Morgan Stanley’s Wealth Management results provide the closest comparison for Merrill.
Goldman Sachs competes with Bank of America to help clients raise capital, trade for institutions and manage wealthy clients’ money. Its fees from advising clients and arranging stock and bond issuance offer a concrete comparison for Bank of America’s investment-banking business.
PNC Financial Services Group competes with Bank of America for U.S. household deposits, business loans, company cash-management services and wealth clients. PNC’s reported pressure on deposit pricing and customer migration helps frame the competition Bank of America faces for savers’ money.
U.S. Bancorp competes with Bank of America for consumer banking, business loans, company cash management and payments. Its Payment Services results, covering cards and processing merchants’ payments, offer a comparison for Bank of America’s payment business.
Truist Financial competes with Bank of America for consumer and business banking, company cash management and wealth clients in major Southeastern U.S. markets. Its deposits in Florida and Georgia provide a regional comparison for Bank of America’s competition for customer funds.
Capital One competes with Bank of America for credit-card borrowers, consumer deposits, auto loans and commercial banking clients. Its card credit losses offer a focused comparison for the consumer-credit conditions facing Bank of America.
UBS competes directly with Bank of America to manage wealth clients’ money in the Americas and serve investment-banking clients globally. Its Americas wealth-management performance is more relevant to that rivalry than its group-wide profit.
Barclays competes with Bank of America to help investment-banking clients obtain funding and to lend to U.S. consumers through credit cards. Its U.S. consumer-card business offers a separate comparison from its investment bank for Bank of America’s card lending.
Bank of Montreal’s sizable U.S. bank and North American capital-markets business compete with Bank of America for household and corporate clients. Its U.S. Banking results offer a cleaner comparison for Bank of America’s deposit and lending business than its Canadian operations.
Deutsche Bank competes with Bank of America to manage companies’ cash, provide loans and serve global investment-banking clients. Its Corporate Bank’s cash-management and trade-finance business provides a comparison for Bank of America’s services to corporate customers.
Royal Bank of Canada competes with Bank of America to manage U.S. clients’ wealth and help companies raise capital. Its Wealth Management and Capital Markets results are the relevant comparisons, rather than its Canadian personal-banking business.
HSBC competes with Bank of America’s international corporate and markets businesses to handle companies’ payments, provide financing and exchange currencies. HSBC’s wholesale transaction-banking revenue, particularly foreign exchange, offers a focused comparison for those Bank of America businesses.
Capital One Financial earningsCOF
Capital One’s report will show how its credit-card borrowers are repaying, giving a direct comparison for Bank of America’s card business.
Read Capital One’s card delinquencies and charge-offs alongside Bank of America’s reported card losses. Stable results at both would suggest repayment pressure remains contained for this shared borrower market; rising delinquencies and charge-offs at Capital One would flag strain among card borrowers and make Bank of America’s own card losses worth watching, but would not prove they are the same.
Housing Starts (Sep)
New-home starts, permits and sales track homebuilding activity and demand; for Bank of America, stronger activity can support demand for its residential mortgages and home-equity loans, while weaker housing can strain those portfolios’ credit quality.
Expected1.31MLast release1.275M
If it comes in above expectations
If the reading is above the 1.31M estimate, it is above the previous 1.275M. More starts or permits signal stronger building activity and may support demand for Bank of America’s residential mortgages and home-equity loans; stronger new-home sales may likewise support mortgage demand and repayment capacity.
If it comes in below expectations
Fewer starts or permits signal weaker building activity and may dampen demand for Bank of America’s residential mortgages and home-equity loans; weaker new-home sales may also indicate less support for borrowers’ repayment capacity.
HSBC Holdings PLC earningsHSBC
HSBC’s report will show how revenue from companies’ cross-border transactions and foreign exchange is faring, a comparison for Bank of America’s international corporate business.
Read HSBC’s wholesale transaction-banking revenue, especially foreign exchange, alongside related revenue and client activity in Bank of America’s Global Banking and Global Markets businesses. Stronger HSBC results would point to income opportunities in cross-border transactions and FX, not prove that Bank of America lost clients; weaker results would indicate pressure on activity or revenue in a market Bank of America also serves.
Fed Interest Rate Decision
The Fed’s policy-rate decision signals the direction of borrowing rates; for Bank of America, changes in rates paid on deposits and borrowings and earned on repricing loans and securities can shift net interest income, the difference between interest earned and paid.
Expected4.0%Last release4.0%
If it comes in above expectations
A higher-than-expected policy rate can lift rates on repricing loans and securities, but also raise what Bank of America pays on deposits and borrowings; the change in net interest income depends on how those effects balance.
If it comes in below expectations
A lower-than-expected policy rate can reduce rates on repricing loans and securities, but also ease what Bank of America pays on deposits and borrowings; the change in net interest income depends on how those effects balance.
Citigroup Inc. earningsC
Citigroup’s report will show how revenue from institutional trading is faring, a comparison for Bank of America’s business serving institutional investors.
Compare Citigroup’s Markets revenue with Bank of America’s market-making and similar income in Global Markets. Strength at both would point to a more active revenue pool from institutional trading; weaker Citigroup revenue would signal pressure on trading activity or related income, but the comparison alone cannot show which bank won market share.
Morgan Stanley earningsMS
Morgan Stanley’s report will show how client assets and fee income are developing in Wealth Management, the closest comparison for Bank of America’s Merrill business.
Compare Morgan Stanley Wealth Management’s client-asset flows and fee income with Bank of America’s investment-management fees and asset flows in Global Wealth & Investment Management. Growth at both would show client assets and activity supporting wealth revenue; weakness at Morgan Stanley would point to a softer wealth market for Merrill as well, but would not prove clients moved between the firms.
Wells Fargo & Co. earningsWFC
Wells Fargo’s report will show whether household deposits are staying and what the bank pays for them, framing Bank of America’s competition for savers’ money.
Read Wells Fargo’s deposit balances alongside its deposit costs, and compare the direction with Bank of America’s deposits and interest expense. Stable deposits with contained costs would show a large rival retaining savers without sharply raising rates; outflows or rising costs would signal fiercer competition for funding and potential pressure on Bank of America’s deposit costs.
Bank of America Corporation earningsThis company
Bank of America’s report will show whether income from lending and client businesses is outpacing credit losses and operating costs.
Read net interest income, which is interest earned minus interest paid, alongside the provision for credit losses and noninterest expense. Rising net interest income without provisions and expenses rising as fast would show income growth is outpacing credit and operating costs; flat or falling net interest income with higher provisions or expenses would show those pressures are eroding the bank’s earnings.
