Fitch Ratings reaffirmed Bank of America Corporation’s (NYSE: BAC) Long-Term Issuer Default Rating (IDR) at AA- and Short-Term IDR at F1+ on June 3, 2025. Bank of America, N.A.’s IDRs were also maintained at AA and F1+, respectively, indicating a stable outlook. This article analyzes the key drivers behind Fitch’s decision, implications for investors, and how to track BofA’s credit health effectively.

Strong Business Profile and Diversified Revenue Mix

Bank of America’s Viability Rating (VR) of aa- reflects its strong position in consumer banking, wealth management, and corporate finance. Key strengths include:

• Market Leadership: Leading or near-leading market share across mortgages, credit cards, and investment banking.

• Diversification: A balanced income mix between net interest income, fees, and trading revenue stabilizes earnings throughout economic cycles.

• Prudent Risk Management: A disciplined approach to underwriting, credit provisioning, and reserve building minimizes volatile swings.

By combining retail deposits with investment banking services, BofA can offset pressures in one segment with strengths in another. This balanced profile enhances Fitch’s confidence in the bank’s ability to navigate challenging economic conditions.

Capital and Liquidity Management

Fitch highlighted two essential metrics contributing to BofA’s resilience:

• Double Leverage Below 120 percent
  BofA’s conservative capital allocation decreases reliance on parent capital injections, strengthening the consolidated balance sheet.

• Prudent Liquidity Management
  BofA maintains high-quality liquid assets (HQLA) at both the parent company and intermediate holding company (IHC) levels. This liquidity buffer protects against funding shocks.

By keeping capital ratios above regulatory recommendations and possessing ample liquidity, BofA is better positioned to handle short-term volatility, influenced by rate changes or sudden deposit withdrawals.

Improving Asset Quality Indicators

After a period of normalization, BofA’s credit metrics have stabilized:

• Net Charge-Offs Decreased to 0.5 percent of Loans in Q1 2025
  Reduced charge-offs in commercial real estate (CRE) loans contributed to this progress. Fitch anticipates a modest net charge-off ratio, as provisioning remains adequate.

• Loan-Loss Reserves and Coverage Ratios
  Reserves for potential defaults remain stable or have increased, indicating a cautious inclination towards commercial and consumer exposures.

Improved asset quality enhances earnings stability and supports a positive outlook for long-term IDRs.

Investor Implications

1. Monitor Financial Ratios

Utilize the Ratios (TTM) API to access trailing-twelve-month metrics, such as return on assets (ROA), efficiency ratio, and net charge-off ratio. Tracking these metrics over time validates whether asset quality improvements persist. For example:

“By querying the Ratios (TTM) API, analysts can confirm that BofA’s net charge-off ratio has remained below 1 percent for four consecutive quarters.”

2. Track Credit Ratings and ESG Scores

Leverage the Company Rating API to obtain up-to-date credit ratings, Viability Ratings, and ESG risk scores. Comparing BofA’s ratings with its peers (like JPMorgan and Citigroup) highlights relative strengths and weaknesses. Key metrics include:

• Latest Long- and Short-Term IDRs

• Viability Rating trends

• ESG risk scores and trends

3. Benchmark Against Peer Banks

Beyond BofA, gather the same Ratios (TTM) and Company Rating API data for large U.S. G-SIBs. A comparative overview can reveal any peers facing higher double leverage, weaker liquidity, or deteriorating credit metrics—information that can shape sector weightings or rotation strategies.

Key Takeaways

• Fitch’s AA-/F1+ Maintenance
  Reflects BofA’s leading business mix, conservative capital allocation (double leverage under 120 percent), and solid liquidity buffers.

• Improved Asset Quality
  Net charge-offs at 0.5 percent of loans in Q1 2025 indicate improving loan performance, particularly in commercial real estate.

• Stable outlook
  Fitch expects BofA’s diversified revenue streams and disciplined risk management to support earnings stability, even if interest rates stay elevated or CRE stress lingers.

To stay informed about Bank of America’s evolving credit profile:

• Use the Company Rating API for live credit ratings, Viability Ratings, and ESG scores.

• Access key financial ratios, such as the net charge-off ratio, ROA, and efficiency ratio, via the Ratios (TTM) API to validate Fitch’s assessment and identify trends.

Integrating these data feeds into your analysis toolkit keeps you on top of the metrics that matter—helping to forecast potential rating changes, benchmark against peers, and enable data-driven investment decisions.