Bank of America: 2Q26 EPS PREVIEW: Sequential NII growth with y-o-y fee growth

Research evidence excerpt

Bank of America: 2Q26 EPS PREVIEW: Sequential NII growth with y-o-y fee growth

on, and

scaling client interactions. Core transaction accounts, payments share gains (including digital/

peer-to-peer), deepening client relationships, stablecoins, and payment innovation are all key

to future growth. It believes it has levers that preserve its flexibility to help navigate changing

market conditions as required. Headcount has declined by 1,070 from 4Q25.

Asset quality: BAC noted a resilient operating backdrop, solid consumer spending (running up

5% y-o-y), low unemployment and stable credit alongside steady but cautious commercial

activity despite policy and geopolitical uncertainty. It has also not experienced any material

losses in its global markets loans, and it feels good about the underwriting and the secured

positions that it has. With respect to private credit related loans, it notes its exposure has

structural insulation from those first loss positions. Private credit exposure is structurally

protected by significant first-loss buffers, with independent, continuously updated

underwriting, and borrowing-base controls that reduce exposure as credit quality deteriorates

before losses mount. We expect its NPA and NCO ratios be little changed.

Capital: The Basel III current proposal would result in modestly higher capital requirements.

However, the proposed changes to the GSIB surcharge are expected to more than offset the

Basel III endgame impact for U.S. G-SIBs. Taken together, if Basel III endgame and GSIB

frameworks are adopted as is, BAC believes it is likely to see some reduction in overall capital

requirements relative to the current regime in future periods. A management capital buffer of

~50bps above regulatory minimums is targeted long term.