Latest news with #BankofAmerica
Yahoo
15 minutes ago
- Business
- Yahoo
Bank of America Is One of the Largest Financial Companies by Market Cap. But Is It a Buy?
Key Points Bank of America is the second largest U.S. bank and the fifth largest financial company by market capitalization. The company just reported strong second-quarter earnings. There could be some positive tailwinds coming for the banking industry. 10 stocks we like better than Bank of America › To say that Bank of America's (NYSE: BAC) progress in the 15 years since the end of the financial crisis has been impressive would be an understatement. The bank went from being one of the most troubled of the major financial institutions to one of the most respected in the industry. In fact, Bank of America is now the second largest U.S. bank stock by market cap. However, Bank of America could still be an attractive business to invest in, especially now. Let's take a quick look at where Bank of America ranks in the overall financial sector, how the business is doing, and why now might be a smart time to buy. The largest financials companies by market cap The largest financial company in the world is Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), with a market cap of more than $1 trillion. Many investors don't realize it, but Berkshire is technically an insurance company at heart -- Warren Buffett built its empire using insurance float from subsidiaries like GEICO and others. With that in mind, here's where Bank of America fits among the largest financial companies (the link leads to our up-to-date list) based in the United States by market cap: Company (Symbol) Description Market Capitalization Berkshire Hathaway Conglomerate with insurance focus $1.02 trillion JPMorgan Chase (NYSE: JPM) Bank $809 billion Visa (NYSE: V) Payment processor $677 billion Mastercard (NYSE: MA) Payment processor $502 billion Bank of America Bank $352 billion Data source: Market caps as of 7/21/2025. So, as of this writing, Bank of America is the fifth largest financial sector company by market cap and the second largest bank stock. It's likely it will stay this way for at least a little while, as there's a wide gap between Bank of America and the No. 4 (Visa) as well as with the No. 6, fellow big bank Wells Fargo (NYSE: WFC), which has a $260 billion market cap. How it's going Bank of America, and most other large bank stocks for that matter, just reported second-quarter results. In general, the numbers looked strong, and here are some key highlights: Revenue and EPS grew by 4% and 7% year over year, respectively. Customer deposits grew 5% to $2 trillion. Bank of America has the No. 1 retail deposit market share, and this growth rate was better than most peers. The bank achieved a 10% return on equity (ROE), which is generally considered to be the threshold of a strong ROE. Consumer banking added 175,000 net new checking accounts and consumer investment accounts grew by 13% thanks to strong market performance and inflows of capital. Bank of America has the No. 3 investment banking market share year-to-date. The company is doing arguably the best of the big banks when it comes to leveraging AI. It has 1,400 AI and machine learning patents, and, just to name one example, its "Ask Merrill" and "Ask Private Bank" AI tools get 23 million interactions per year. Bank of America spent $5.3 billion on stock buybacks and increased its dividend by 8%. Net interest yield increased by 3 basis points year over year despite no recent Federal Reserve rate cuts. Bank of America's net charge-off rate improved by four basis points compared with a year ago. I'm paying close attention to numbers like the net interest margin in the persistent high-rate environment, and the bank's NCO rate, which is a great indicator of the financial health of its customers. Is Bank of America a buy? The bottom line is Bank of America is an excellent institution, and its management has done a great job of embracing technology. If rates start to fall later this year as many expect, it could provide a nice tailwind for the stock, and the banking industry as a whole. In fact, there could be several positive tailwinds in the next few years, including a looser regulatory environment, the surge in IPO and M&A activity we're seeing, and potential lower corporate tax rates. With Bank of America shares trading for less than 13 times forward earnings and a historically attractive valuation of less than 1.3 times book value, Bank of America could be an excellent performer over the next few years. Should you buy stock in Bank of America right now? Before you buy stock in Bank of America, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Bank of America wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $641,800!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,023,813!* Now, it's worth noting Stock Advisor's total average return is 1,034% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Bank of America is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Wells Fargo is an advertising partner of Motley Fool Money. Matt Frankel has positions in Bank of America and Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway, JPMorgan Chase, Mastercard, and Visa. The Motley Fool has a disclosure policy. Bank of America Is One of the Largest Financial Companies by Market Cap. But Is It a Buy? was originally published by The Motley Fool
Business Times
2 hours ago
- Business
- Business Times
Dimon's success creates headaches for JPMorgan
The bank's dominance has generated two big problems — excess capital, and a lofty stock valuation 'THE size, scale and scope of JPMorgan Chase also offer huge advantages,' Jamie Dimon wrote in a letter to shareholders — his first as chief executive officer at the end of 2005. Two decades later, the claim seems almost quaint. The bank's balance sheet is now four times larger; its stock market capitalisation has ballooned by more than five times; and profit this year is forecast to be nearly seven times higher than then. JPMorgan Chase has left the competition behind, even its biggest and most consistent peers, including Bank of America, Goldman Sachs and Morgan Stanley. At more than US$800 billion, the bank is now worth as much as these three combined. Can it keep winning? And is it too big? These are related questions. To find growth that doesn't make the bank more of a risk to itself and the economy it inhabits, it has to be very well run. But its immediate problem is an extremely high stock valuation and billions of dollars of excess capital – both of which threaten its returns if mishandled. Size alone 'is not enough to win', Dimon wrote two decades ago. 'In fact, if not properly managed, it can bring many negatives.' The big bumps JPMorgan has ridden along the way are memorable because they've been relatively scarce: The so-called London Whale trading losses in 2012 and the more recent acquisition of what turned out to be a fraudulent fintech, Frank, stick out. But when Dimon wrote his first shareholder reviews for 2005 and 2006, JPMorgan was producing less-than-stellar results. The new CEO was being criticised for too much caution in a credit and trading boom that delivered huge profit for its rivals, some of which were making returns on equity of 30 per cent or more while JPMorgan languished at 20 per cent or below. Its strict limiting of subprime mortgages and trendy off-balance-sheet vehicles for investing in complex bonds appeared very conservative to shareholders and rivals at the time. But by early 2008 – when Dimon first coined his 'fortress balance sheet' catchphrase – those choices instead looked like some of the smartest made on Wall Street. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Dimon's strength has always been a patient, paranoid and honest approach to risk – and an ability to course-correct when things don't work out. His early missives insisted that the bank would never pursue short-term wins at the cost of longer-term value (similar phrases were repeated at this year's Investor Day). They were also refreshingly simple and clear – and when it comes to running any organisation, nothing beats clarity of communication. For example, in breaking down possible losses from various risks in 2006, he wrote: 'It's important to share these numbers with you, not to worry you, but to be as transparent as possible about the potential impacts … We do not know exactly what will occur or when, but we do know that bad things happen.' The aim, then and now, is to be well prepared for 'bad things' and ready to take advantage when rivals cannot. After 2008, for instance, JPMorgan made a fortune hoovering up senior bonds issued by collateralised loan obligations, a type of structured credit vehicle, that many banks were ditching at huge discounts. Patience and adaptability not only help to avoid taking big hits or reacting appropriately when they do happen; they also encourage correcting for missed opportunities. Dimon has been a colourful critic of cryptocurrencies, calling the industry a Ponzi scheme. But JPMorgan has built an internal payments 'coin' that's been adapted as a tokenised deposit, just in time to help defend it against the coming wave of stablecoins under new US regulations. It may also start making loans to customers against crypto asset collateral, the Financial Times reported. It has a catch-up strategy in private credit, too. If the best time to commit to the market could have been in 2015, when it let go of HPS Investment Partners, recently acquired by BlackRock, then the second-best time is now, when the excesses are easier to spot and the diversity of borrowers is improving. This reflexive, adaptive strategy has always been there, but Dimon formalised it for investors in 2023 with reference to the military practice of the OODA loop: Observe, Orient (analyse and check your assumptions or biases), Decide and Act – then observe and repeat. None of this is unique: The hard part is doing it properly and persistently. If Dimon has successfully instilled this practice throughout executives and management, then this vast bank will survive his inevitable retirement, as I've written before. That's a theory many investors still aren't keen to test. But it will be tested – and perhaps even before Dimon steps down. JPMorgan has roughly US$60 billion of equity capital more than it needs to meet regulatory requirements. It is expected to spend about one-quarter of that on share buybacks over the rest of this year, having already repurchased about US$15 billion of stock so far in 2025, according to figures compiled by Bloomberg. Sounds great, but there's a problem: Its shares are so highly valued that this is a bad trade for the bank. The current price is 2.4 times the book value per share that JPMorgan reported for the second quarter – buying those shares for investors means paying them more than double the current net asset value of the company they own. 'No one's going to convince me that's a brilliant thing to do,' he said on last week's earnings call. But the money must be used for something, otherwise it will drag on JPMorgan's returns – like a fund manager sitting on too much idle cash. More acquisitions could be the answer; not in US banking, where it's already well beyond the antitrust threshold of about 10 per cent of national deposits, but perhaps in technology. Here, the bank could be a bit shy after being bitten a couple of times lately. There was the US$175 million Frank debacle and another fintech deal in Europe, Viva Wallet, that has led to rounds of litigation. As Jeremy Barnum, JPMorgan's chief financial officer, put it in his eternally dry style on the recent earnings call: 'We have learned some lessons. We don't want to overlearn those lessons.' Lending more or taking greater risks in trading aren't straightforward options either, especially while credit and equity markets are at high valuations and the economy faces huge uncertainties, driven mainly by the mercurial leadership of US President Donald Trump. Regardless, Dimon and Barnum believe there's plenty of space to grow JPMorgan's balance sheet over time without deals and still hit its 17 per cent return on equity target through a range of outcomes and business cycles. Others want or expect to see more. Mike Mayo, a banking analyst at Wells Fargo, reckons JPMorgan can become the first US$1-trillion-market-cap bank within three years. Ebrahim Poonawala, his counterpart at Bank of America, says the stock is undervalued in terms of its price-to-earnings ratio because in other industries the leading companies trade on much bigger premiums than the rest. If investors push JPMorgan's stock price even higher on that basis, its already stretched price-to-book valuation will be even more inflated, making buybacks more costly and increasing the pressure on the bank to spend its excess capital in other ways – all of which could be terrible for returns. The goodwill Dimon has among investors offers him space to navigate this in the medium term, although that won't be true forever. The bank might just sit on larger-than-normal buffers of equity for now. 'I like having excess capital,' he told investors at first-quarter results in April. 'We are prepared for any environment.' This is a set of problems others would wish for, but it could bring another period of slowing profit growth or even returns that fall behind rivals again. History says that may not be a bad thing for JPMorgan; it may just signal the same patience, paranoia and adaptability that has seen the firm come to dominate American finance and become one of the biggest banks in the world with US$4.5 trillion of assets. Size alone isn't enough to cause disaster, to re-purpose Dimon's early quote, especially when more than US$1 trillion of JPMorgan's assets today are essentially cash. What matters is that the bank continues to be properly managed and that the pressure of its high valuation doesn't lead to bad decisions. That's what investors and regulators should care about today – and even more so once Dimon hands responsibility for running this behemoth to someone else. BLOOMBERG
CNBC
4 hours ago
- Business
- CNBC
Bank of America raises price on Amazon ahead of earnings
Bank of America is getting bullish on Amazon ahead of the e-commerce giant's earnings release, saying the company is getting ready to unlock its full artificial intelligence potential in the back half of the year. Analyst Justin Post reiterated his buy rating on Amazon and lifted his price target by $17 to $265. That suggests shares could gain 16.5% from their previous close. Amazon, which is set to report financial results on July 31, has seen shares rise 3.7% year to date. Post hiked his estimates for strong second-quarter retail data and Anthropic AI growth, and said his estimates for the quarter remain above the Street given strong e-commerce data, longer Prime DAy sales and currency tailwinds. Heading into the second half of the year, the analyst expects strong AI demand and Amazon Web Services capacity growth to be a key stock driver. To be sure, he anticipates AWS growth in the second quarter to reflect a slight deceleration from the first. "Amazon's YTD commentary on AWS capacity constraints, plus recent competitor Cloud revenue acceleration has likely elevated Street focus on AWS," Post wrote in a Wednesday note to clients. "We think 2Q Retail is setting up for a solid quarter, plus a strong 1Q for AWS backlog and accelerating quarterly AWS capex spending should drive accelerating 2H AWS growth." "We think the most important commentary on the call will be 2H outlook for AWS growth (if provided), investors could become impatient on returns for ramping quarterly AWS capex spend given competitor acceleration," Post added. Looking ahead, the analyst said this year's longer Prime Day event and consumer resilience could drive a strong third-quarter outlook. Tariff uncertainty remains a key risk for the stock, he said. Amazon previously called out "tariffs and trade policies" and "recessionary fears" among several factors that could make its guidance subject to change. The tech giant topped earnings and revenue expectations for the first quarter, but had given light guidance for the second.
Yahoo
5 hours ago
- Business
- Yahoo
HELOC rates today, July 23, 2025: The national average on home equity lines of credit remains unchanged
The national average HELOC interest rate continues to rest under 9% today. That does not include home equity line of credit promotional rates that you might earn during an introductory period, which can be much lower. The Federal Reserve meets next week, but few observers are holding their breath for a rate cut. In fact, Wall Street puts the odds over 95% that the Fed will once again leave short-term interest rates unchanged. That means the prime rate will hold steady as well. Expect HELOC rates to remain about where they are for a while. Let's check today's home equity line of credit rate. This embedded content is not available in your region. HELOC rates Wednesday, July 23, 2025 According to Bank of America, the largest HELOC lender in the country, today's average APR on a 10-year draw HELOC held firm at 8.72%. That is a variable rate that kicks in after a six-month introductory APR, which is 6.49% in most parts of the country. Homeowners have a sizable amount of value tied up in their houses — more than $34 trillion at the end of 2024, according to the Federal Reserve. That's the third-largest amount of home equity on record. With mortgage rates lingering in the high 6% range, homeowners are not likely to let go of their primary mortgage anytime soon, so selling the house may not be an option. Why let go of your 5%, 4% — or even 3% mortgage? Accessing some of the value locked into your house with a use-it-as-you-need-it HELOC can be an excellent alternative. How lenders determine HELOC interest rates HELOC interest rates are different from primary mortgage rates. Second mortgage rates are based on an index rate plus a margin. That index is often the prime rate, which today is 7.50%. If a lender added 1% as a margin, the HELOC would have a rate of 8.50%. Lenders have flexibility with pricing on a second mortgage product, such as a HELOC or home equity loan, so it pays to shop around. Your rate will depend on your credit score, the amount of debt you carry, and the amount of your credit line compared to the value of your home. And average national HELOC rates can include "introductory" rates that may only last for six months or one year. After that, your interest rate will become adjustable, likely beginning at a substantially higher rate. How a HELOC works You don't have to give up your low-rate mortgage to access the equity in your home. Keep your primary mortgage and consider a second mortgage, such as a home equity line of credit. The best HELOC lenders offer low fees, a fixed-rate option, and generous credit lines. A HELOC allows you to easily use your home equity in any way and in any amount you choose, up to your credit line limit. Pull some out; pay it back. Repeat. Meanwhile, you're paying down your low-interest-rate primary mortgage like the wealth-building machine you are. This embedded content is not available in your region. Look for introductory rates, but be aware of a rate adjustment later Today, FourLeaf Credit Union is offering a HELOC rate of 6.49% for 12 months on lines up to $500,000. That's an introductory rate that will convert to a variable rate later. When shopping lenders, be aware of both rates. And as always, compare fees, repayment terms, and the minimum draw amount. The draw is the amount of money a lender requires you to initially take from your equity. The power of a HELOC is tapping only what you need and leaving some of your line of credit available for future needs. You don't pay interest on what you don't borrow. HELOC rates today: FAQs What is a good interest rate on a HELOC right now? Rates vary so much from one lender to the next that it's hard to pin down a magic number. You may see rates from nearly 7% to as much as 18%. It really depends on your creditworthiness and how diligent a shopper you are. Is it a good idea to get a HELOC right now? For homeowners with low primary mortgage rates and a chunk of equity in their house, it's probably one of the best times to get a HELOC. You don't give up that great mortgage rate, and you can use the cash drawn from your equity for things like home improvements, repairs, and upgrades. Of course, you can use a HELOC for fun things too, like a vacation — if you have the discipline to pay it off promptly. A vacation is likely not worth taking on long-term debt. What is the monthly payment on a $50,000 home equity line of credit? If you take out the full $50,000 from a line of credit on a $400,000 home, your payment may be around $395 per month with a variable interest rate beginning at 8.75%. That's for a HELOC with a 10-year draw period and a 20-year repayment period. That sounds good, but remember, it winds up being a 30-year loan. HELOCs are best if you borrow and pay back the balance in a much shorter period of time.
New Straits Times
5 hours ago
- New Straits Times
Saleswoman loses RM167k in 'Bank of America' VIP scam
JOHOR BARU: A 63-year-old gold shop saleswoman was conned out of RM167,207 in a fake "VIP membership" scam allegedly linked to Bank of America, complete with promises of charity perks and private jet rides. Johor Baru South police chief, Assistant Commissioner Raub Selamat, said the woman befriended a man through Facebook while working in Singapore on March 23, and later continued chatting via WhatsApp. The suspect allegedly convinced the victim to make frequent donations to a fictitious orphanage club under the name of Bank of America, with the bait of gaining VIP status and access to exclusive corporate rewards, including private jet travel. Between March 23 and July 21, while in Johor Baru, the woman made 19 transactions totalling over RM167,000 to five different bank accounts. The accounts were held under various names. "The victim began to suspect she was being duped after repeated payments failed to secure her promised VIP status and the suspect continued demanding more funds," Raub said in a statement today. Checks via the Commercial Crime Investigation System (CCIS) revealed no prior scam records tied to the bank accounts, but police are investigating under fraud-related provisions. He urged the public to be cautious when approached with dubious online offers, especially those involving personal financial transactions. Information on scams can be channelled to the National Scam Response Centre at 997 or verified via the police's Semak Mule portal at
