23. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders In Q2 2024: 92
Average Analyst EPS % Revision: -1.2%
Bank of America Corporation (NYSE:BAC) is one of the biggest banks in America. It is a diversified bank, with a presence across several sectors such as consumer banking, investment banking, corporate banking, and wealth management. Bank of America Corporation (NYSE:BAC)’s heft is evident through its large customer base, with estimates suggesting that it serves the needs of 66 million customers. However, its exposure to the retail sector often proves to be a double edged sword too. This is because Bank of America Corporation (NYSE:BAC) has struggled with high interest expense due to record high interest rates. The bank’s interest expense jumped to $32.4 billion in H1 2023, to mark a 754% annual growth. These have continued to affect Bank of America Corporation (NYSE:BAC) in 2024, as during H1 its interest costs jumped by 40% and net interest income dropped by $900 million. Moving forward, as rates drop, the bank can see lower costs and higher growth in its investment banking and brokerage businesses. However, these should also be dependent on the broader economic picture as any economic weakness – perceived or otherwise – can create headwinds for the stock.
Bank of America Corporation (NYSE:BAC)’s management commented on investment banking 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.”
