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Falling interest rates are significantly impacting U.S. lenders, particularly Bank of America (BAC) and Wells Fargo (WFC), as they adapt to the upcoming monetary easing cycle. Both banks are aiming to exploit the drop in interest rates, with BAC projecting a net interest income (NII) growth of 5-7% by 2026, while WFC focuses on stabilizing funding costs and increasing lending activity after the lifting of its asset cap in June 2025.
Bank of America expects over 12% earnings growth and a return on tangible common equity (ROTCE) between 16% and 18%, alongside plans to open over 150 financial centers by 2027. Wells Fargo anticipates stable NII in 2025 and aims for aggressive growth in consumer and corporate loan assets now that it is freed from the asset cap. Both banks have seen share price increases this year, with BAC at 18.2% and WFC at 20.4%.
According to Zacks Consensus Estimates, BAC’s revenue growth for 2025 and 2026 is projected at 7.2% and 5.7% respectively, while WFC forecasts modest growth of 2.1% and 5.4%. BAC’s dividend yield stands at 2.16%, just above WFC’s 2.13%. Currently, both banks have a Zacks Rank #3 (Hold), and BAC is seen as the more favorable investment due to its stronger growth potential and efficiency.
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