Bank of America raises NII forecast, beats profit estimates on dealmaking strength

(Reuters) -Bank of America raised the lower end of its interest income forecast and beat Wall Street estimates for profit, as its investment bankers benefited from a bumper third quarter. The second-largest U.S. bank now expects fourth-quarter NII between $15.6 billion and $15.7 billion, up about 8% from a year earlier. The Federal Reserve's 25-basis-point cut in September could stoke demand from borrowers. Shares of the lender were up about 4% in trading before the bell. The bank and its biggest rivals benefited from renewed confidence among corporations to carry out large mergers and acquisitions. Investment banking fees at BofA rose 43% to $2 billion from a year earlier, compared with executives' earlier forecast for a 10% to 15% increase. INTEREST INCOME BOOST Net interest income — or the difference between what the bank earns on loans and pays out on deposits — rose 9% to $15.2 billion in the quarter from a year earlier. BofA had previously said it expects record net interest income in 2025. "Strong loan and deposit growth, coupled with effective balance sheet positioning, resulted in record net interest income," CEO Brian Moynihan said in a statement. BofA's stock, however, has underperformed all of its peers as well as the KBW Bank Index so far in 2025. DEALMAKING REBOUNDS Globally, megadeals reached $1.26 trillion during the reported quarter, a 40% jump from the same period last year, marking the second-highest third-quarter total on record, according to Dealogic data. Overall global dealmaking topped $3 trillion in the first nine months of 2025, reaching the highest level since the pandemic peak in 2021, according to Mergermarket data. Peers JPMorgan Chase and Citigroup also beat estimates for third-quarter profit, helped by strength in their investment banking businesses. Bank of America on Wednesday reported a net income of $8.5 billion, or $1.06 per share, in the three months ended September 30. That compares with $6.9 billion, or 81 cents per share, a year earlier. The Street was expecting a profit of 95 cents per share, according to estimates compiled by LSEG. (Reporting by Pritam Biswas in Bengaluru and Saeed Azhar in New York, editing by Lananh Nguyen and Shinjini Ganguli)

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