Bank of America grew Q2 2026 profit 26.6% to $9.07 billion on revenue of $31.56 billion, but roughly half the revenue gain came from Global Markets — where Equities trading revenue jumped 70% — while the CET1 capital cushion narrowed to 120 basis points above the minimum.
Revenue
$31.6B
+15.0% YoY
Net income
$9.1B
+26.6% YoY
Diluted EPS
$1.21
+34.4% YoY
Trading carried the quarter: Equities revenue up 70% drove a 26.6% jump in profit
Bank of America earned $9.07 billion in the second quarter of 2026, up 26.6% from $7.17 billion a year earlier, on revenue of $31.56 billion (+15.0%). Diluted earnings per share rose 34.4% to $1.21 from $0.90 — a faster rate than profit itself, because the bank retired 4.7% of its average diluted share count over the year through buybacks.
The growth was real, but it was narrow. Of the $4.12 billion of additional revenue, roughly half came from the Global Markets trading arm, whose revenue rose $2.04 billion (+34%) and whose net income rose 72%. That one segment supplied 28.9% of the bank's total profit this quarter, up from 21.3% a year ago. Trading revenue is the least repeatable line a large bank has, so the headline growth rate is a weaker guide to next year than it looks.
Three of those terms do most of the work below, so briefly: the net interest margin (NIM, also called net interest yield) is the spread the bank earns between what it charges on loans and securities and what it pays on deposits and borrowings, expressed as a percentage of its interest-earning assets. The efficiency ratio is operating costs divided by revenue — lower is better, and a falling ratio means revenue grew faster than expenses. ROTCE is profit measured against the shareholder money actually tied up in the business, excluding goodwill and other intangibles; it is the standard yardstick for how hard a bank's capital is working.
Segment results
Figures are on a fully taxable-equivalent basis as the bank reports them. The four segments sum to $9.37 billion of net income; the residual "All Other" unit lost $292 million, which reconciles to the $9.07 billion consolidated total.
Segment
Revenue Q2 2026
YoY
Net income Q2 2026
YoY
Consumer Banking
$11,336M
+5%
$3,281M
+10%
Global Wealth & Investment Management
$6,871M
+16%
$1,413M
+42%
Global Banking
$6,236M
+10%
$2,046M
+20%
Global Markets
$8,022M
+34%
$2,626M
+72%
Global Markets. Sales and trading revenue rose $1.8 billion. Equities alone went from $2,133 million to $3,622 million — up 70% — which the filing attributes to "increased client financing activity and a strong trading performance in derivatives and cash." Client financing means lending against securities positions, which is balance-sheet-intensive rather than fee-driven: average total assets in the segment grew $97.6 billion year over year to $1.1 trillion "driven by increased financing activity and loan growth." Fixed income, currencies and commodities (FICC) was the quieter half, up 8.8% to $3,476 million on "improved trading performance in credit products and commodities." Segment expenses rose 18%, mostly revenue-linked pay, so the incremental margin was still wide: the efficiency ratio improved to 55.90% from 63.61%.
GWIM (Merrill and the Private Bank). Revenue rose 16% and profit 42%, on asset management fees up 19% to $4.4 billion. But the driver deserves a flag: assets under management ended the quarter at $2.33 trillion versus $1.99 trillion a year ago, and the quarter's rollforward shows $198.3 billion of market appreciation against just $13.7 billion of net client flows — flows that were actually lower than the $14.3 billion a year earlier, and lower year to date as well ($34.0 billion versus $38.3 billion). Fee growth here is a market-level story far more than a share-gain story, and it reverses mechanically if equity markets fall.
Consumer Banking. The steadiest and least dramatic line: revenue +5%, profit +10%, with net interest income up $480 million on "higher deposit spreads, as well as loan and deposit balances." Average deposits rose $5.0 billion to $957.0 billion, but the mix inside that is worth noting — $11.5 billion flowed into checking and $3.8 billion into time deposits while $10.4 billion left money market and savings accounts. Card income fell 5% to $1,346 million.
Global Banking. Investment banking fees in the segment jumped 50% to $1,154 million on higher debt issuance, advisory and equity issuance work; firmwide investment banking fees rose 50% to $2,138 million. Offsetting that, the segment's own net interest yield fell to 1.86% from 1.94% as lower rates compressed lending spreads.
What the net interest margin number hides
NIM rose 14 basis points to 2.08%, which reads as core banking strength. Part of it is: Consumer Banking's net interest yield improved to 3.68% from 3.51% on better deposit spreads. But of the $1,327 million consolidated increase in net interest income, $644 million — very nearly half — came from Global Markets, where net interest income rose 51% to $1,911 million. That is financing-book interest tied to trading activity, not a durable deposit-franchise spread, and it is economically bound up with the same client financing business that drove the Equities result. Management's own explanation lists the drivers in that order: "higher net interest income related to Global Markets activity, deposit and loan growth, and fixed-asset repricing, partially offset by the impact of lower interest rates."
Credit is genuinely better, but coverage is thinning
The provision for credit losses — money set aside against loans expected to go bad — fell 14.2% to $1,366 million. The improvement is real and specific: consumer provisions fell $75 million on better credit card performance, commercial fell $151 million on better commercial real estate performance. The credit card net charge-off rate (loans actually written off as uncollectible, annualized as a share of card balances) dropped to 3.55% from 3.82%. Total net charge-offs were $1,412 million versus $1,525 million, and nonperforming loans fell to $5,870 million from $6,104 million.
Two qualifications. First, the provision ($1,366 million) was smaller than actual charge-offs ($1,412 million), so the allowance shrank: total allowance for credit losses is $14,264 million, down $116 million since December, and the allowance as a share of loans fell to 1.08% from 1.17% a year ago. Some of the provision benefit is coverage drifting down against a loan book that grew $32 billion since December, not just cleaner credit. Second, the bank added a qualitative reserve "related to uncertainties associated with the ongoing conflicts in the Middle East" — a judgment overlay that would have made the reported improvement larger still had it not been taken.
The tax line cut the other way
Pretax profit rose 33.4% but net income rose only 26.6%, because the effective tax rate went to 21.5% from 17.3%. The filing attributes this to "lower tax preference items, primarily related to lower renewable energy tax credits on certain tax-related equity investment activity and lower discrete tax benefits relative to pretax earnings." In other words, the prior-year comparison was flattered by tax credits that are now smaller. On an operating basis this quarter was stronger than the 26.6% profit growth suggests — though a higher structural tax rate is also a persistent drag going forward, not a one-quarter event.
Operating leverage was clearly positive: revenue +15.0% against expenses +8.4%, pushing the efficiency ratio down 3.59 points to 59.02%. But roughly that gap is what you would expect when the revenue growth is concentrated in a business whose main cost is revenue-linked compensation. Expense growth was driven by "higher revenue-related expenses" plus continued spending on "people, marketing and technology."
Takeaway: Strip out the Global Markets financing and trading engine and this is a mid-single-digit-growth bank: Consumer Banking revenue grew 5%, and GWIM's 16% came overwhelmingly from market appreciation rather than new client money. The 26.6% profit growth is genuine but rests on the most cyclical revenue line the company has, at the same time as its capital cushion is narrowing.
Capital: the constraint to watch
CET1 capital — the highest-quality equity buffer regulators measure a bank against, expressed as a share of its risk-weighted assets — was 11.2% at June 30, against a 10.0% minimum requirement. That leaves 120 basis points of headroom, down from 11.5% a year ago and 11.4% at year-end 2025. CET1 capital itself barely moved (up $171 million since December, as earnings were "largely offset by capital distributions and accumulated OCI"); the ratio fell because risk-weighted assets grew $19.3 billion in the quarter alone to $1,792 billion, "primarily driven by growth in Global Banking and Global Markets." The trading and financing growth that produced the earnings is consuming the capital.
Against that, the bank returned $6.0 billion in buybacks and $2.0 billion in common dividends during the quarter under a $40 billion repurchase authorization running since August 2025, and on July 23, 2026 the board raised the quarterly dividend 14% to $0.32 per share, payable September 25. Tangible book value per share rose 6.8% to $29.37.
The forward tension is straightforward: the stress capital buffer stays at 2.5% and the CET1 minimum at 10.0% through at least December 2026, but the bank's global systemically important bank surcharge — an extra capital requirement imposed on the largest institutions — "is expected to increase on January 1, 2027." A higher requirement, a shrinking cushion and risk-weighted assets growing with the trading book together argue for a slower buyback pace in 2027 than the current $6 billion-a-quarter run rate, unless RWA growth stalls.
Rate sensitivity is asymmetric, and asymmetric the wrong way
The bank discloses what a sudden move in interest rates would do to the next twelve months of banking-book net interest income. A 100 basis point parallel rise would add about $1.0 billion; a 100 basis point fall would cost about $2.2 billion. At 200 basis points the gap widens to +$1.9 billion versus −$5.5 billion. Both downside figures worsened since December 2025 (−$2.0 billion and −$4.9 billion). Management states the bank remains "asset sensitive to a parallel move in interest rates, with the majority of that impact coming from the short end of the yield curve" — meaning cuts at the short end are what hurt, and they hurt roughly twice as much as equivalent hikes help.
Trajectory
No formal full-year guidance is given in the 10-Q. Reading the filing's own drivers forward:
Net interest income should keep grinding higher on loan growth (total loans $1,218 billion, up $32 billion since December) and deposit repricing, but the Global Markets component that supplied half of this quarter's increase will track trading balances, not the deposit franchise. Short-end rate cuts are the clearest downside risk, at roughly $2.2 billion of annual NII per 100 basis points.
Fee income is the most exposed line. Asset management fees are riding a $198 billion quarterly market gain with flows flat to down; investment banking fees, up 50%, are running against a comparison that will get much harder.
Credit looks likely to stay benign near term — card losses are improving and commercial real estate is healing — but with coverage at 1.08% of loans, there is less cushion left to release, so the provision line is unlikely to keep contributing to profit growth at this rate.
Capital return is the item most likely to disappoint relative to the current run rate, given the January 2027 G-SIB surcharge increase against a 120 basis point CET1 cushion.
The half-year picture is consistent with the quarter: revenue of $61.83 billion (+11.0%), net income of $17.66 billion (+21.5%), diluted EPS of $2.31 (+29.1%), ROTCE of 16.52%. Good results, concentrated in the businesses that are hardest to underwrite for next year.