How Bank of America Makes Money

Bank of America gets most of its revenue from consumer banking

Reviewed by JeFreda R. Brown

Bank of America (BAC) is one of the world’s largest investment banks and financial institutions. It serves individual consumers, wealthy investors, large corporations, and governments. The company offers banking, investing, asset management, and other financial and risk management products and services within the U.S. and globally.

Key Takeaways

• Bank of America is one of the world’s largest investment banks and financial institutions.
• The company provides financial services to customers including consumers, wealthy investors, institutional clients, and governments.
• Bank of America’s business segments include Consumer Banking, Global Wealth and Investment, Management, Global Banking, and Global Markets.
• The bank’s Consumer Banking segment is generally the biggest driver of the bank’s revenue stream.

Bank of America’s Industry

Bank of America’s competitors include JPMorgan Chase (JPM), Citigroup (C), Wells Fargo (WFC), credit card issuers like Visa (V), hedge funds, and private equity firms. The Charlotte, North Carolina-headquartered company rose to a global giant through its acquisitions.

Bank of America provides a wide range of banking and nonbank financial services and products through four business segments:

• Consumer Banking: Provides credit, banking, and investment products and services to small businesses and consumer clients, including traditional savings accounts, certificates of deposit (CDs), individual retirement accounts (IRAs), credit and debit cards, residential mortgages, and loans.
• Global Wealth & Investment Management: Offers financial advisory, brokerage, banking, and retirement products to clients with large amounts of investable assets. GWIM consists of two primary businesses: Merrill Wealth Management and Bank of America Private Bank.
• Global Banking: Provides lending-related products and services, including underwriting, advisory services, and investment banking products. The customers in this segment include middle-market companies, commercial real estate firms, nonprofit organizations (NPOs), financial institutions, and corporations of various sizes.
• Global Markets: Offers sales, trading, and research services to institutional clients, including financing, securities clearing, settlement, custody, and market-making services.

Bank of America’s Financials

Bank of America is the second-largest commercial bank in the United States by total assets after JPMorgan Chase. As of Dec. 31, 2023, it had $ 2.54 trillion in assets, of which $2.40 trillion were held in the U.S.For 2023, the company reported revenue of $98.6 billion and net income of $26.5 billion.

Success in 2023 was due to growth across the company’s offerings, higher interest rates, a strong deposit franchise benefitting net interest income, profitable sales and trading results, and prudent expense management. 

The data shown in the pie charts above excludes negative revenue and the net loss from the company’s All Other segment. Bank of America’s All Other segment includes the bank’s interest rate and foreign currency risk management activities, liquidating businesses, and other activities not categorized in one of the four primary segments.

History and Leadership

Bank of America was founded in 1930 in San Francisco, California. As of 2024, Brian T. Moynihan is the Chair of the Board and Chief Executive Officer for Bank of America Corporation. He has led the company since 2010.

Bank of America provides a range of banking, investment management, and other financial and risk management products and services. The company has expanded through acquisitions of other firms including Merrill Lynch, Countrywide Financial, and Axia Technologies.

Recent Developments

Bank of America has implemented programs that benefit clients and employees. As of 2024, over two billion clients have interacted with Erica, the most advanced and first widely available virtual financial assistant, launched in 2024. Erica’s capabilities support individual and corporate clients across the enterprise, including within Merrill, Benefits, and CashPro platform.

In Sept. 2023, Bank of America Increased its minimum hourly wage to $23 in the United States, with plans for further increases to $25 by 2025.

How Does Bank of America Support Diversity and Inclusion?

Bank of America has a Chief Diversity & Inclusion Officer and a Global Diversity & Inclusion Council (GDIC). Both ensure that business and operating units align with diversity strategies and goals.

Does Bank of America Have Local Branches to Help Small Businesses?

Local branches serve the needs of small and mid-sized businesses. Bank of America’s larger global arm covers corporate banking and markets worldwide.

Is Bank of America Recognized for Customer Satisfaction?

Bank of America ranked No. 3 for overall satisfaction in the J.D. Power 2024 U.S. Merchant Services Satisfaction Study from surveys of over 5,300 small business customers nationwide. Bank of America Global Equity Research was ranked first across 182 categories in Institutional Investor’s 2023 global survey of the top equity research firms. 

The Bottom Line

Bank of America is the second-largest commercial bank in the United States following JPMorgan Chase. The company provides financial services to consumers, wealthy investors, institutional clients, and governments. Bank of America’s revenue for 2023 was $98.6 billion.

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