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BAC Sees Untapped Merrill Banking Potential: Can Cross-Selling Pay Off?
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Key Takeaways
Bank of America sees cross-selling potential, as 33% of Merrill clients lack banking relationships.
BAC's GWIM client balances rose 9% to $5.1T, while average loans and leases climbed 13%.
BAC's GWIM revenues grew 13% to $7.1B, but competition and deposit pricing pressures pose challenges.
Bank of America (BAC - Free Report) has considerable scope to expand banking relationships within its Merrill Wealth Management franchise. With 67% of Merrill clients maintaining banking relationships, the remaining customer base presents an opportunity to increase lending and deposit penetration. Leveraging its integrated banking and wealth management platform could help the company generate incremental revenues and strengthen client relationships.
BAC offers Merrill clients a broad range of banking solutions, including mortgages, securities-based lending, customized credit facilities and deposit products. By addressing clients’ investment and financing needs through a unified platform, the company can capture a greater share of their financial activities. Its established advisor network also provides an advantage in identifying cross-selling opportunities without significant customer acquisition costs.
The company’s third-quarter 2026 results reflect growing demand for its wealth management offerings. Global Wealth & Investment Management (GWIM) client balances increased 9% year over year to $5.1 trillion, while average loans and leases rose 13% to $279 billion. During the quarter, Merrill and Private Bank collectively added approximately 5,000 net new relationships with at least $500,000 in assets, highlighting continued client acquisition momentum.
Higher banking penetration could support GWIM’s earnings growth by boosting net interest income and diversifying its revenue streams. In the third quarter, segment revenues increased 13% year over year to $7.1 billion, while net income reached $1.5 billion. The pre-tax margin improved to 29% from 27% a year earlier. Further expansion of banking relationships could enhance revenue productivity and operating efficiency.
However, intense competition, deposit pricing pressures and interest rate fluctuations may constrain growth. Clients’ preference for maintaining relationships with multiple financial institutions could also limit cross-selling success. Nonetheless, Merrill’s sizable client base and BofA’s extensive banking infrastructure position the company to capitalize on untapped opportunities, supporting long-term revenue diversification and profitability.
How Are BAC’s Peers Capitalizing on Similar Opportunities?
Morgan Stanley (MS - Free Report) is expanding banking relationships through its integrated wealth management platform, which combines investment advisory, lending and deposit solutions. In the third quarter of 2026, Morgan Stanley’s wealth management revenues increased 10% year over year to $9.1 billion, while loans rose 15.6% to $201.1 billion. Continued growth in lending activities and deeper client engagement could support recurring revenues and strengthen Morgan Stanley’s wealth management franchise.
JPMorgan Chase (JPM - Free Report) is leveraging its diversified banking platform to strengthen relationships with affluent clients through investment, credit and deposit offerings. In the third quarter of 2026, assets under management increased 13% year over year to $5.2 trillion, while average loans and deposits grew 20% and 5%, respectively. JPMorgan’s extensive banking network and comprehensive financial solutions provide opportunities to increase wallet share and sustain growth in wealth management revenues.
BAC’s Price Performance, Valuation & Estimates
In the past six months, shares of Bank of America have lost 5.7% against the industry’s 5.4% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, BAC trades at a trailing 12-month price-to-tangible book ratio of 1.77, below the industry average of 3.14.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for BAC’s 2026 and 2027 earnings indicates year-over-year growth rates of 18.4% and 14.9%, respectively. Earnings estimates for both years have been revised lower over the past 30 days.
Image Source: Zacks Investment Research
Currently, Bank of America carries a Zacks Rank #4 (Sell).
View the Zacks #1 Rank List
Image: Bigstock
BAC Sees Untapped Merrill Banking Potential: Can Cross-Selling Pay Off?
Key Takeaways
Bank of America (BAC - Free Report) has considerable scope to expand banking relationships within its Merrill Wealth Management franchise. With 67% of Merrill clients maintaining banking relationships, the remaining customer base presents an opportunity to increase lending and deposit penetration. Leveraging its integrated banking and wealth management platform could help the company generate incremental revenues and strengthen client relationships.
BAC offers Merrill clients a broad range of banking solutions, including mortgages, securities-based lending, customized credit facilities and deposit products. By addressing clients’ investment and financing needs through a unified platform, the company can capture a greater share of their financial activities. Its established advisor network also provides an advantage in identifying cross-selling opportunities without significant customer acquisition costs.
The company’s third-quarter 2026 results reflect growing demand for its wealth management offerings. Global Wealth & Investment Management (GWIM) client balances increased 9% year over year to $5.1 trillion, while average loans and leases rose 13% to $279 billion. During the quarter, Merrill and Private Bank collectively added approximately 5,000 net new relationships with at least $500,000 in assets, highlighting continued client acquisition momentum.
Higher banking penetration could support GWIM’s earnings growth by boosting net interest income and diversifying its revenue streams. In the third quarter, segment revenues increased 13% year over year to $7.1 billion, while net income reached $1.5 billion. The pre-tax margin improved to 29% from 27% a year earlier. Further expansion of banking relationships could enhance revenue productivity and operating efficiency.
However, intense competition, deposit pricing pressures and interest rate fluctuations may constrain growth. Clients’ preference for maintaining relationships with multiple financial institutions could also limit cross-selling success. Nonetheless, Merrill’s sizable client base and BofA’s extensive banking infrastructure position the company to capitalize on untapped opportunities, supporting long-term revenue diversification and profitability.
How Are BAC’s Peers Capitalizing on Similar Opportunities?
Morgan Stanley (MS - Free Report) is expanding banking relationships through its integrated wealth management platform, which combines investment advisory, lending and deposit solutions. In the third quarter of 2026, Morgan Stanley’s wealth management revenues increased 10% year over year to $9.1 billion, while loans rose 15.6% to $201.1 billion. Continued growth in lending activities and deeper client engagement could support recurring revenues and strengthen Morgan Stanley’s wealth management franchise.
JPMorgan Chase (JPM - Free Report) is leveraging its diversified banking platform to strengthen relationships with affluent clients through investment, credit and deposit offerings. In the third quarter of 2026, assets under management increased 13% year over year to $5.2 trillion, while average loans and deposits grew 20% and 5%, respectively. JPMorgan’s extensive banking network and comprehensive financial solutions provide opportunities to increase wallet share and sustain growth in wealth management revenues.
BAC’s Price Performance, Valuation & Estimates
In the past six months, shares of Bank of America have lost 5.7% against the industry’s 5.4% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, BAC trades at a trailing 12-month price-to-tangible book ratio of 1.77, below the industry average of 3.14.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for BAC’s 2026 and 2027 earnings indicates year-over-year growth rates of 18.4% and 14.9%, respectively. Earnings estimates for both years have been revised lower over the past 30 days.
Image Source: Zacks Investment Research
Currently, Bank of America carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.