Fitch Affirms Bank of America at ‘AA-‘ with Stable Outlook
Fitch Ratings has affirmed Bank of America Corporation’s (BAC) Long- and Short-Term Issuer Default Rating (IDRs) at ‘AA-‘ and ‘F1+’, respectively.
In addition, Fitch has affirmed Bank of America, N.A.’s (BANA) Long- and Short-Term IDRs at ‘AA’ and ‘F1+’, respectively. The rating outlook on the Long-Term IDRs is Stable, according to Fitch.
BAC’s intrinsic creditworthiness, as expressed by its Viability Rating (VR) of ‘aa-‘, drives its IDRs.
Fitch said the VR reflects BAC’s leading franchise in many of its core businesses, its diversified business mix and consistent strategy, which ratings analysts believe will continue to underpin a more stable through-the-cycle financial performance relative to peers.
BAC’s VR is one notch above the implied VR of ‘a+’ due to the company’s business profile, which is assessed at ‘aa-‘ and has a high influence on its ratings.
The corporation holds leading or near-leading market shares across many business lines. In the U.S., it ranks among the top firms in retail deposits and lending.
BAC’s Global Wealth and Investment Management unit holds a top market position in client assets, deposits and loans.
In Global Banking, it has strong positions in debt and equity underwriting, commercial lending and investment banking. BAC also maintains good sales and trading positioning in Global Markets.
BAC has demonstrated a disciplined approach to risk management and balance sheet growth in recent years. This should result in less volatile earnings performance in a stressed environment, supported by lower credit losses and capital erosion than most peers (excluding trust banks) in the Federal Reserve’s supervisory stress tests.
Its asset quality metrics have stabilised or improved slightly since late 2024, with an impaired loans/gross loans ratio of 0.9% as of 1Q26.
Although there is a risk that current trends could deteriorate again, given the Iran conflict and related economic uncertainty, BAC’s asset quality has sufficient headroom to absorb potential cyclical deterioration over the outlook horizon.
BAC’s operating profit/risk-weighted assets (RWA) ratio continued to strengthen over the past year, reaching 2.4% as of 1Q26. Lower funding costs, fixed-rate asset repricing, higher Global Markets activity, and growth in loan and deposit balances supported BAC’s higher net interest income and modestly stronger net interest margin versus 1Q25.
In addition, increased sales and trading, asset management, and investment banking fees, alongside improved efficiency, further supported overall profitability. Fitch expects BAC to sustain the recent improvement in earnings without an increase in volatility over our forecast horizon, given its lower risk appetite relative to peers.
BAC’s CET1 ratio has consistently been above 11% since 2022, reaching 11.2% (standardised) in 1Q26, exceeding the minimum requirement of 10%. Given BAC’s high RWA density, Fitch also considers BAC’s advanced approach CET1 ratio, which was 12.5% at this same date, in its analysis.
Fitch said BAC’s ‘aa-‘ VR and stable outlook on its Long-Term IDR incorporate the expectation that BAC will manage capital ratios at or above required regulatory capital minimums plus management buffers over time.
Fitch continues to view BAC’s funding flexibility and access to capital markets as rating strengths. Given the scope of the firm’s operations, BAC is visible in virtually all major funding markets and has demonstrated ready, cost-effective access to liquidity.
BAC has one of the highest deposit-to-total-funding ratios among U.S. peers and a low gross loans-to-customer-deposits ratio of 60% at 1Q26. Fitch expects these trends to continue over our Outlook horizon. Nigeria 1st Policy to Drive Job creation, Stimulate industrial Growth
