Bank of America forecasts record net interest income in 2025
Investing.com -- Bank of America's retail banking head, Holly O'Neil, has projected a record net interest income (NII) for the year 2025. The bank anticipates a growth rate of 6% to 7%, with the consumer sector playing a significant role in this increase.
NII, which is the difference between the earnings from loans and the payouts for deposits, is expected to reach between $15.5 billion and $15.7 billion by the fourth quarter of 2025.
O'Neil, at a UBS financial services conference, shared that the bank experienced a satisfactory growth in consumer spending in 2024, at about 4%, slightly higher than the 3% growth in 2023. This growth was supported by positive macro factors such as good wage growth and relatively low unemployment rates.
The bank's clients, numbering 69 million, remain liquid in terms of their deposit balances, which supports their spending. The spending pattern has been stable, with more expenditures on entertainment and experiences and fewer on durable goods.
O'Neil also mentioned a slight anomaly in January, with higher spending on groceries and less on restaurants due to weather conditions across the country, but deemed it a one-off event.
In terms of investments, O'Neil stated that the bank will continue to focus on improving the client experience to drive organic business growth. This will be achieved through investments in technology, marketing, and expanding the financial center footprint. As artificial intelligence (AI) continues to evolve, the bank plans to invest in it, with technology being its largest investment. This investment in technology is aimed at improving the client experience and ensuring consistency.
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