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Bank of America is trading lower despite reporting a modest EPS beat for Q4. Revenue, net of interest expense, of $28.4 bln increased 7% yr/yr, reflecting higher net interest income (NII), asset management fees, and strength in sales and trading.

• Net interest income of $15.8 bln rose 10% yr/yr, driven by Global Markets activity, fixed-rate asset repricing, and higher deposit and loan balances, partially offset by lower interest rates.
• Consumer spending grew 5% to $4.5 trln, highlighting a stable US consumer backdrop. Delinquencies and charge-offs improved, while consumer credit conditions and unemployment remained stable during 2025.
• Equity market appreciation supported household balance sheets, reinforcing expectations for stronger growth in 2026.
• On the commercial side, BAC cited manageable tariffs, the settling of new tax laws, and increased deregulation, contributing to solid profits, good credit quality, and healthy money movement activity.
• Investment banking momentum improved, with IB revenue up 25% in 2H25 vs. 1H25, supported by greater certainty around tax and trade policy; management expects 2026 to be a strong year for capital markets activity.
• Regarding potential credit card rate caps (10%), BAC cautioned that lower caps could restrict credit availability, limiting access for some consumers and creating unintended consequences.

Briefing.com Analyst Insight:

While BAC's Q4 EPS beat was modest, the more important takeaway was management's constructive macro outlook. The bank continues to see resilient consumers, improving credit trends, and stable employment, all of which underpin confidence in stronger growth in 2026. On the commercial and investment banking fronts, clearer tax, trade, and regulatory frameworks are supporting deal activity and credit quality. That said, policy risks remain, particularly around proposed credit card rate caps that could constrain consumer lending. BAC has a lot of exposure there. Overall, BAC's commentary largely aligns with peers like JPMorgan (JPM), reinforcing the view that the U.S. economy remains on solid footing despite lingering geopolitical and policy uncertainties.