Bank of America has made significant improvements in its 2025 stress test results. The company's modeled capital depletion improved by 100 basis points to 170 basis points. This improvement indicates a stronger capital position for the bank. As a result, under current Federal Reserve rules, Bank of America's preliminary stress capital buffer (SCB) would improve by 70 basis points to 2.5% with a Common Equity Tier 1 (CET1) minimum requirement of 10.0%, effective October 1, 2025.
In addition, Bank of America plans to increase its quarterly common stock dividend to $0.28 per share, marking an 8% increase. This decision reflects the company's confidence in its financial position and its commitment to returning value to shareholders.
As of March 31, 2025, Bank of America reported $201 billion of regulatory CET1 capital and a CET1 ratio of 11.8%, surpassing the current minimum requirement. These figures demonstrate the bank's robust capital base and its ability to weather economic stress.
The Federal Reserve's proposed modifications to the SCB calculation could further enhance Bank of America's position. If adopted as proposed, the bank's 2025 stress test results would indicate an SCB of 2.7%, leading to a new CET1 minimum ratio of 10.2%, effective January 1, 2026.
The market has reacted to these announcements by moving the company's shares 1.75% to a price of $48.15. If you want to know more, read the company's complete 8-K report here.
