BANK OF AMERICA CORP DE

Global Markets offers sales and trading services and research services to institutional clients across fixed-income, credit, currency, commodity and equity businesses. Global Markets product coverage includes securities and derivative products in both the primary and secondary markets. Global Markets provides market-making, financing, securities clearing, settlement and custody services globally to our institutional investor clients in support of their investing and trading activities. We also work with our commercial and corporate clients to provide risk management products using interest rate, equity, credit, currency and commodity derivatives, foreign exchange, fixed-income and mortgage-related products. As a result of our market-making activities in these products, we may be required to manage risk in a broad range of financial products including government securities, equity and equity-linked securities, high-grade and high-yield corporate debt securities, syndicated loans, MBS, commodities and asset-backed securities. The economics of certain investment banking and underwriting activities are shared primarily between Global Markets and Global Banking under an internal revenue-sharing arrangement. Global Banking originates certain deal-related transactions with our corporate and commercial clients that are executed and distributed by Global Markets. For information on investment banking fees on a consolidated basis, see page 40.

The following explanations for year-over-year changes in results for Global Markets, including those disclosed under Sales and Trading Revenue, are the same for amounts including and excluding net DVA. Amounts excluding net DVA are a non-GAAP financial measure. For more information on net DVA, see Supplemental Financial Data on page 29.

Net income for Global Markets increased $496 million to $4.7 billion in 2023 compared to 2022. Net DVA losses were $236 million compared to gains of $20 million in 2022. Excluding net DVA, net income increased $690 million to $4.9 billion. These increases were primarily driven by an increase in revenue, partially offset by higher noninterest expense.

Revenue increased $1.4 billion to $19.5 billion primarily due to higher sales and trading revenue in the current-year period and negative valuation adjustments on leveraged loans in the prior-year period. Sales and trading revenue increased $887 million, and excluding net DVA, increased $1.1 billion. These increases were primarily driven by higher revenue in FICC. Noninterest expense increased $786 million to $13.2 billion, primarily driven by continued investments in the business, including people and technology, partially offset by expenses recognized for certain regulatory matters in the prior-year period.

Average total assets increased $12.1 billion to $869.8 billion, driven by higher levels of inventory, increased secured

41 Bank of America

financing activity and loan growth in FICC, partially offset by lower levels of inventory in Equities. Year-end total assets increased $5.1 billion to $817.6 billion driven by the same factors as average assets.

The return on average allocated capital was 10 percent, unchanged from the same period a year ago. For information on capital allocated to the business segments, see Business Segment Operations on page 34.

Sales and Trading Revenue

Sales and trading revenue includes unrealized and realized gains and losses on trading and other assets which are included in market making and similar activities, net interest income, and fees primarily from commissions on equity securities. Sales and trading revenue is segregated into fixed-income (government debt obligations, investment and non-investment grade corporate debt obligations, commercial MBS, residential mortgage-backed securities, collateralized loan obligations, interest rate and credit derivative contracts), currencies (interest rate and foreign exchange contracts), commodities (primarily futures, forwards, swaps and options) and equities (equity-linked derivatives and cash equity activity). The following table and related discussion present sales and trading revenue, substantially all of which is in Global Markets, with the remainder in Global Banking. In addition, the following table and related discussion also present sales and trading revenue, excluding net DVA, which is a non-GAAP financial measure. For more information on net DVA, see Supplemental Financial Dataon page 29.

(1)For more information on sales and trading revenue, see Note 3 – Derivatives to the Consolidated Financial Statements.

(2)Includes FTE adjustments of $546 million and $354 million for 2023 and 2022.

(3)Includes Global Banking sales and trading revenue of $654 million and $1.0 billion for 2023 and 2022.

(4)FICC and Equities sales and trading revenue, excluding net DVA, is a non-GAAP financial measure. FICC net DVA gains (losses) were $(226) million and $19 million for 2023 and 2022. Equities net DVA gains (losses) were $(10) million and $1 million for 2023 and 2022.

Including and excluding net DVA, FICC revenue increased $979 million and $1.2 billion driven by an improved trading environment for credit and mortgage products and an increase in secured financing activity. Including and excluding net DVA, Equities revenue decreased $92 million and $81 million driven by weaker trading performance in derivatives, partially offset by an increase in client financing activities.