FINANCIALS: BAC: Decent Credit Results, Insufficient To Tighten Much Further

Bank of America (BAC: A1/A-/AA-) 2Q24 results show a decent performance on credit quality and capital. There may be an estimate upgrade in here, but we feel it to be immaterially small. The credit has been a small outperformer recently and there’s not enough here to see it tighten further beyond peers, in our view.

• Credit stats: loan losses are in line with consensus and, in the key US cards business, both 30- and 90-day delinquencies are a few bp improved from Mar-24. This is better than consensus. Net charge-offs are only up 26bp, after a 55bp rise in 1Q24. NPLs in the corporate bank are lower q/q. CET1 is 13.5% (advanced), again in line. So, a decent performance.
• Revenues matched expectations with a miss in the consumer bank (which the equity market won’t like), offset by the IB and the business bank. Costs were broadly in line, too, meaning pre-tax profit was just 1.6% better than consensus.
• Outlook: there appear to be few guidance and outlook changes here. The bank has given 4Q24 NII guidance here which looks like it may move consensus up slightly, but ultimate estimate moves will be more conditioned by comments about IB trading and a wider activity outlook, we feel.

Conf call is 1330 (London time) at: https://investor.bankofamerica.com/events-and-presentations/events/detail/20240716-q2-2024-bank-of-america-earnings-conference-call#register