- Bank of America revenue in 2020 totaled $85.5 billion—down 3% from the previous year—but a promising Q1 2021 shows it’s turning a corner.
- Insider Intelligence broke down BofA’s revenue by segment and other key findings from its 2020 Annual Report and Q1 2021 Financial Results.
- Do you work in the Financial Services industry? Get business insights on the latest tech innovations, market trends, and your competitors with data-driven research.
Bank of America (BofA) is one of largest banks in the world, but how and where does it make its money? Despite global economic uncertainty amid the pandemic, BofA saw success in the form of more capital, more deposits, record liquidity and improved capital ratios. Its diversified businesses softened the blow that most banks saw among asset and credit sensitive businesses, as well the elevated costs associated with government assistance programs such as Paycheck Protection Program (PPP) origination, unemployment payments, and stimulus checks.
Now, as we enter a period of economic recovery, the bank finds itself in a position of strength, bolstered by strong digital capabilities and high favorability scores among clients and employees.
Below we’ve broken out Bank of America’s revenue by year, segment, geography, and more.
Bank of America Annual Revenue (2020)
Understandably, Bank of America’s annual revenue was down in 2020, but the company’s commitment to diversified revenue streams helped it weather the pandemic. Total revenue was $88.5 billion—down from 2019’s $91.2 billion—while net income was $17.9 billion, a decrease from $27.4 billion the previous year.
Bank of America Revenue Segments
Bank of America’s revenue mix is made up of four key segments.
Consumer Banking – Net income of $6.5 billion
Consumer banking is Bank of America’s biggest revenue stream, comprising more than a third of its revenue. Total consumer banking income decreased year-over-year (YoY) by $6.5 billion to $6.5 billion, mostly due to lower revenue, higher provision for credit losses, and higher expenses. Despite the downturn, the bank saw $115 billion in average deposits during the year, cementing its position as the top US bank by retail deposits.
In terms of client support actions, BofA administered nearly 350,000 PPP loans to small businesses. Additionally, the bank’s digital engagement was high, with 39.3 million customers connecting on platforms such as Zelle and Erica—up 3% from 2019—and 42% of sales coming through digital channels.
Global Wealth and Investment Management – Net income of $3.1 billion
BofA’s Global Wealth and Investment Management (GWIM) segment consists of two subsets: Merrill Lynch Global Wealth Management (MLGWM) and Bank of America Private Bank. In 2020, GWIM net income decreased by $1.2 billion YoY to $3.1 billion, primarily due to lower net interest income, higher noninterest expense, and higher provision for credit losses.
MLGWM’s annual revenue of $15.3 billion represents a 5% decrease YoY driven by lower interest rates, partially offset by higher market valuations and positive AUM flows. Meanwhile Private Bank’s revenue of $3.3 billion shows a 4% decrease YoY, also driven by the impact of lower interest rates. Despite the revenue losses, client balances increased $302 billion, or 10% YoY, to $3.3 trillion by the end of the year.
Global Banking – Net income of $3.5 billion
Global Banking—which includes Global Corporate Banking, Global Commercial Banking, Business Banking,and Global Investment Banking—saw a net income decrease of $4.6 billion to $3.5 billion, primarily driven by higher provision for credit losses and lower revenue.
Average loans and leases were relatively flat YoY, with average deposits increasing 26% as a client response to market volatility, government stimulus, and credit draws.
Global Markets – Net income of $5.2 billion
BofA’s Global Markets segment offers sales, trading, and research services to institutional clients across credit, currency, commodity, fixed-income, and equity businesses. Net income for this segment grew $1.7 billion to $5.2 billion in 2020. Total revenue increased $3.2 billion to $18.8 billion primarily through higher sales and trading revenue and investment banking fees. Additionally, net debit valuation adjustment (DVA) losses were $133 million—an improvement upon 2019’s losses of $222 million.
Bank of America Quarterly Revenue (Q1 2021)
According to its Q1 2021 earnings report, Bank of America’s revenue improved amid economic recovery. Total quarterly revenue was $22.8 billion—up from $20.1 billion in Q4, 2020. Net income for Q1 2021 was $8.1 billion, an increase of $2.6 billion, or 47%, from the previous quarter.
Bank of America Revenue by Region
More than two-thirds (68%) of Bank of America’s revenue in Q1 2021 originated in the US and Canada (68%), while the remaining 32% came from international markets. Besides North America, the company serves clients across approximately 35 countries.
Bank of America Growth & Investments
Bank of America’s future is bright; not only did the company persevere through the pandemic and solidify its position as a top US bank, but it’s actively continuing to diversify its revenue sources. As recently as July 2021 BofA ranked first in J.D. Power’s annual US Retail Banking Advice Satisfaction Study. And though demand for financial advice is currently limited, usage among those who appreciate it is high: J.D. Power found that 69% of respondents who got financial advice acted on it.
Offering financial advice is just one way incumbent institutions like BofA can maintain their branch networks. As more fintechs and big tech partners crop up on the scene, banks will need to innovate to achieve digital parity or find other opportunities to differentiate their services. J.D. Power’s survey showed that only 49% of respondents are considered to be financially healthy, (with only 38% passing a basic financial literacy test)—indicating that other banks would be smart to follow suit on this growing opportunity.