2. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders In Q2 2024: 92
Bank of America Corporation (NYSE:BAC), another GSIB, is one of the biggest banks in the world courtesy of its 66 million customers. This provides it with a sizeable base which lends stability, and the GSIB status means that the risks of the bank failing are also lower. However, these do not insulate Bank of America Corporation (NYSE:BAC) from turmoil as was evident in 2023. During the first half of the year, Bank of America Corporation (NYSE:BAC)’s interest expense stood at a whopping and unbelievable $32.4 billion to mark a 753% annual jump. This was felt through to the net interest income, as it meant that Bank of America Corporation (NYSE:BAC)’s NII during the period grew by just 16.6%. The worst is over though, as during H2 2024, the bank’s interest costs grew by a more acceptable 40%. However, Bank of America Corporation (NYSE:BAC) is still feeling the pinch of the high costs, as its H1 2024 net interest income dropped by roughly $900 million. Through a slight buffer from noninterest income, this meant that Bank of America Corporation (NYSE:BAC)’s total revenue remained flat in H1. However, as markets recover through low interest rates, Bank of America Corporation (NYSE:BAC)’s three key noninterest income line items, namely Investment Banking Fees, Investment and Brokerage Services, and Card Income should see notable upticks which were already present in H1 and helped stem the bleeding from high interest costs.
Bank of America Corporation (NYSE:BAC)’s management commented on these high growth segments during the Q2 2024 earnings call. Here is what they said:
“We grew investment banking fees 29% year-over-year and saw sales and trading revenue increase 7%. Global Markets had its 9th consecutive quarter of year-over-year growth in sales and trading revenue, a good job by Jimmy DeMare and his team. Card and service charge revenue also grew by 6% year-over-year in our Consumer business. Much of this fee growth is a result of our intensity around organic growth, and is a testament to the diversity of our operating model. Now on to slide three. Organic growth has been driven by several key factors. First, we focus on our customers. We continue to place them at the center of everything we do. Consumer led the way in delivering solid organic growth with high-quality accounts and engaged clients. For the 22nd consecutive quarter, we had significant net new consumer checking accounts.
We expanded our customer base and our market share. Specifically, we added 278,000 net new checking accounts this quarter, which brings our first six months of 2024 to more than 500,000. In wealth management, we added another 6,100 new relationships this quarter. In our commercial businesses, we added 1,000s of small businesses and 100s of commercial banking relationships. This has led to now managing $5.7 trillion in client balances, loans, deposits, and investments across the consumer and wealth management client segments. In those areas, we saw flows of $58 billion in the past four quarters. Our emphasis on personalized financial solutions and superior customer service has strengthened customer loyalty, attracted new clients across all our businesses.”
