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BAC · Forward model · Consumer Banking · Bear case

What has to happen in Consumer Banking

Model as of

This page changes Consumer Banking inside the complete BAC model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

BAC forward model
Horizon
Consolidated fair value $42.19 all other verticals held in this portfolio case
Final-quarter revenue $11.93B 35% of company revenue
Explicit segment contribution $58.99B EBITDA less segment capex, before corporate items

Global Markets mean-reverts from a record +34% quarter, the credit cycle arrives as a step rather than a glide, and NII misses the upper end of 6-8% because the September hike in the forward curve the guide is conditioned on does not land. Consumer Banking takes the deepest margin cut, minus 4.0 points in total, which on that segment alone is roughly $1.9B a year of extra provision - the model's substitute for a credit cycle, since provisions live inside the vertical margins and cannot be stepped any other way. The market re-rates BAC toward book. What this case does NOT assume is a capital hole, a deposit run or a 2008-style credit event: 11.2% CET1 on $202B of CET1 capital is not in question here. It says the June quarter was the peak. Result: $42.19 a share, 1.44x tangible book and 1.07x book.

Consumer Banking

Basis quarter$11.34B
Final quarter$11.93B
Implied CAGR+1%
Final revenue mix35%

Deposits, cards, small business and the financial-centre network. $11,336M of FTE revenue in the basis quarter on $957.0B of average deposits and $321.1B of average loans. Neither balances nor card spend are published as a complete priced volume series, so the line is projected as sequential growth on the reported revenue.

Last four quarters
2025 Q3 $11.17B Reported
2025 Q4 $11.20B Reported
2026 Q1 $11.05B Reported
2026 Q2 $11.34B Reported
DepositsConsumer lendingCredit cardSmall business
Sequential growth +1.2%/qtr decaying toward +1.0% 1.2% QoQ, the trailing four-quarter average sequential. Not the +4.8% year-over-year headline.
Consumer Banking

Latest: $11.93B (2031Q2E)

Period Value
2022Q4 $10.78B
2023Q1 $10.71B
2023Q2 $10.52B
2023Q3 $10.47B
2023Q4 $10.33B
2024Q1 $10.17B
2024Q2 $10.21B
2024Q3 $10.42B
2024Q4 $10.65B
2025Q1 $10.49B
2025Q2 $10.81B
2025Q3 $11.17B
2025Q4 $11.20B
2026Q1 $11.05B
2026Q2 $11.34B
2026Q3E $11.38B
2026Q4E $11.42B
2027Q1E $11.46B
2027Q2E $11.50B
2027Q3E $11.53B
2027Q4E $11.56B
2028Q1E $11.59B
2028Q2E $11.62B
2028Q3E $11.65B
2028Q4E $11.68B
2029Q1E $11.71B
2029Q2E $11.73B
2029Q3E $11.76B
2029Q4E $11.78B
2030Q1E $11.81B
2030Q2E $11.83B
2030Q3E $11.86B
2030Q4E $11.88B
2031Q1E $11.91B
2031Q2E $11.93B

Assumptions & reasoning

  • A growth driver rather than deposits-as-capacity. Average deposits of $957.0B and average loans of $321.1B are disclosed, but BAC publishes no priced volume series the engine could charge a yield on.
  • The 38.6% margin is PRE-TAX income, $4,375M, already net of the $1,160M provision for credit losses and of segment noninterest expense. It is not EBITDA and it is not pre-provision profit.
  • Consumer carries roughly 85% of the group's credit cost, so this is the line where a consumer credit cycle shows up. Provision has ranged $1,009M to $1,405M over the fifteen quarters, a 39% spread on a line that is 10% of segment revenue.
  • Terminal 36.0% takes back 2.6 points for card-credit normalisation off a 0.47% group net charge-off ratio, which the deck itself frames as better than a year ago rather than as a mid-cycle rate.
  • Seasonality was tested and rejected: signal 0.0219 against a worst window spread of 0.0145, with the whole amplitude inside plus or minus 1% of revenue.
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