Freedom did not see serious financial risks for Bank of America

Shares of Bank of America (BAC) fell 5.1% to $59.47 after management issued a cautious outlook for the third quarter. This marked the bank’s sharpest one-day decline since April 2025.

Bank of America is one of the largest banks in the United States. It serves retail and corporate clients, extends loans, manages assets, conducts securities transactions, and advises on mergers and acquisitions and initial public offerings.

Freedom’s lead analyst Natalia Milchakova считает the market’s reaction overly alarmist. Management’s warning points to the bank’s transparency and respect for minority shareholders—who are informed in advance about a possible deterioration in results—rather than to a threat of serious financial difficulties.

Bank of America expects a decline in fee income

Bank of America CEO Brian Moynihan said that investment-banking fee income in the third quarter could fall by at least 10% year over year. The expected range is $1.6–1.8 billion versus about $2 billion in the same period of 2025.

Revenue from trading securities and other financial instruments may remain roughly at last year’s level—around $5.4 billion. At the same time, the bank’s management continues to view the state of the U.S. economy, consumer spending, and the quality of the loan portfolio positively.

Bank of America’s warning weighed on the entire banking sector. Citigroup (C) shares lost 1.9%, JPMorgan Chase (JPM) fell 1.7%, and Goldman Sachs (GS) dropped 3.9%.

Citigroup provides banking and investment services to individuals, companies, and government organizations. JPMorgan Chase focuses on lending, asset management, and advising on large transactions, while Goldman Sachs specializes in investment-banking services, securities trading, and capital management.

A high base could worsen the comparison of results

According to Natalia Milchakova, Bank of America’s metrics are being affected by a high base from last year. The third quarter of 2025 was successful for investment banks thanks to activity in mergers and acquisitions and initial public offerings.

An initial public offering is a process in which a company впервые offers its shares to a broad range of investors and begins trading on an exchange. Banks earn fees for preparing and supporting such deals.

If client activity declines in the third quarter of 2026, it will be difficult for Bank of America to повторить last year’s result. Additional headwinds could include global uncertainty, rising oil and fuel prices, and ускорение inflation in the United States.

At the same time, a decline in fees does not mean a deterioration in the resilience of the overall business. Bank of America has diversified sources of income, and strong performance in its consumer segment and loan portfolio may partially offset weakness in the investment-banking unit.

The banking sector remains sensitive to forecasts

The market traditionally reacts sharply to cautious statements by bank executives because they have up-to-date information about client activity, demand for financing, and the состояние of the loan portfolio. Even a moderate downgrade to guidance can trigger a sell-off if the share price had previously reflected stronger results.

Earlier, Freedom assessed the financial reporting of the крупнейших participants in the U.S. market and noted the impact of financial results, management guidance, and the state of the economy on stock performance.

The next important event for Bank of America will be the release of its third-quarter results, scheduled for mid-October. It will show how closely the actual decline in investment-banking доходов matches management’s cautious forecast.

This is not an individual investment recommendation.