Bank of America Beats Q4 Expectations on Strong Trading Revenue

Source: Coindoo Original Title: Bank of America Beats Q4 Expectations on Strong Trading Revenue Original Link: Bank of America reported a stronger-than-expected fourth quarter, as heightened market volatility lifted trading activity and helped offset a still-challenging macro backdrop.

Management struck an upbeat tone on the outlook, saying the bank enters 2026 expecting further economic growth and improved profitability.

Key Takeaways

• Q4 results beat expectations, led by strong trading revenue.
• Market volatility boosted client activity across equities and trading.
• Management is optimistic on U.S. growth and profitability in 2026.

Net interest income reached $15.75 billion, coming in above expectations and reflecting resilient loan demand and stable margins late in the year. Total loans rose to $1.19 trillion, also slightly ahead of forecasts, pointing to continued borrowing activity from households and businesses despite lingering economic uncertainty.

Volatile Markets Boost Trading Results

Trading was the standout performer in the quarter. Sales and trading revenue excluding DVA climbed to $4.53 billion, beating estimates, as clients became more active amid choppy markets. Equities trading revenue excluding DVA rose to $2.02 billion, also above expectations, supported by stronger institutional flows and improved market liquidity.

The surge in activity was driven by a combination of factors that unsettled investors toward year-end. Softer signals from the U.S. labor market, political gridlock, and concerns that parts of the stock market—particularly AI-related names—may be overheated prompted portfolio reshuffling. At the same time, speculation around potential Federal Reserve rate cuts added to volatility, a dynamic that typically benefits large investment banks with extensive trading operations.

Investment Banking Shows Early Recovery Signs

Investment banking revenue totaled $1.67 billion, marginally ahead of estimates, as underwriting and advisory activity showed tentative signs of recovery. While deal volumes remain well below peak-cycle levels, the results suggest improving confidence heading into 2026.

For the quarter ended December 31, the bank reported net income of $7.6 billion, or $0.98 per share, up from $6.8 billion, or $0.83 per share, a year earlier. The quarter capped a strong year overall, with Bank of America shares gaining more than 25% in 2025, outperforming the broader S&P 500, though lagging peers such as JPMorgan Chase and Wells Fargo.

Management Optimistic on 2026

Chief Executive Officer Brian Moynihan said the bank remains bullish on the U.S. economy in 2026 and expects continued growth in the year ahead. The chief financial officer added that Bank of America is entering 2026 focused on improving profitability, supported by operating leverage, cost discipline, and stronger client engagement across its businesses.