Bank of America passed the Federal Reserve’s latest stress tests. So did every other major U.S. bank. Yet when peers rushed to boost payouts to shareholders, BAC stood apart. Goldman Sachs lifted its dividend 11%. Citigroup went 12%. Bank of America? Nothing. Not yet.
The Holdout and What Comes Next
Timing explains much of it. The bank typically announces dividend changes with second-quarter earnings. Those results arrive in weeks. The Motley Fool notes this pattern held in recent years. Management simply waited for its usual moment. Investors need not read deeper trouble into the silence.
Still, questions linger on size. Previous annual increases landed at 8% and then 7%. Both outpaced typical inflation near 3%. Boards rarely telegraph exact figures. Analysts see room for another solid step higher. A larger jump would fit the bank’s strong capital position post-stress tests. But dramatic moves remain unlikely. Caution defines the approach.
Shares trade at lower price-to-earnings and price-to-book multiples than JPMorgan Chase or Goldman Sachs. The valuation gap persists even as Citigroup stock climbed 60% over the past year against Bank of America’s 20%. Current yield sits near 2%. That tops many rivals. Income investors find appeal here. A coming dividend bump would sweeten the case without instantly erasing the discount.
Yet capital returns tell only part of the story. Look closer and a different picture emerges. One centered on technology. On artificial intelligence. On massive spending that already produces measurable results across retail, wealth and commercial banking.
Last year clients interacted with the bank roughly 30 billion times. Digital logins reached 16.6 billion, up 15% from the prior period. Proactive alerts added 13.3 billion, rising 12%. More than 38 million customers subscribed to those alerts. Engagement rates hit 81% among consumers and small businesses. Wealth and global banking clients logged in at 86%. Satisfaction scores stayed high. Eighty-six percent rated the digital experience a 9 or 10 out of 10.
Erica, the bank’s AI-powered virtual assistant, drove much of this activity. Twenty point six million users engaged nearly 700 million times in 2025 alone. Cumulative interactions since launch in 2018 now exceed 3.2 billion. The tool offers proactive, personalized guidance on balances, spending, credit scores and more. It doesn’t replace human advisers. It multiplies their reach.
Zelle adoption climbed to 25 million active users. Transaction volume hit 1.8 billion for $556 billion in payments, both up double digits. Small businesses sent over 200 million payments totaling $126 billion through Zelle and QR codes. CashPro mobile approvals reached a record $1.2 trillion. That works out to $38,000 processed every second. Growth across these platforms shows no sign of slowing.
These numbers come straight from the bank’s March release. Bank of America Newsroom highlighted how AI and digital tools fueled the surge. Nikki Katz, a digital banking executive, said the bank studies changing client behaviors to “advance our digital and AI capabilities to deliver personalized insights and proactive advice.”
Chief Technology and Information Officer Hari Gopalkrishnan offered more color in April. The bank allocates $13.5 billion annually to technology. Thirty percent of that budget targets new initiatives, including AI. That’s roughly $4 billion a year. The focus has shifted. No longer scattered pilots on narrow tasks. Now the priority centers on end-to-end process transformation.
Gopalkrishnan outlined four dimensions at a Semafor event. Process transformation. Scale and reuse. Governance. Return on investment. He described the pivot this way: from proofs of concept on small tasks to big opportunities that affect revenue, client experience or expenses. One example involved AI-powered meeting summaries in wealth management. What once took days or weeks now happens in hours. Sales teams gain faster insights from CRM data. Relationships strengthen.
Scale comes through reuse. Instead of individual teams building isolated applications, the bank develops enterprise capabilities applied repeatedly. AI now supports thousands of processes. Governance requires balance. “This stuff is very hard to govern,” Gopalkrishnan said. “If you overdo it, you stall innovation. If you underdo it, you introduce a lot of risk.”
ROI receives fresh scrutiny. Banks could cut costs as much as 20% through AI, according to industry estimates. Legacy systems complicate the path. Alignment on what counts as return remains uneven. A year ago teams experimented freely. Now they ask first where the value lies. Data quality, compute costs and model economics all factor in. FinOps teams help manage the expense.
Employee adoption mirrors client success. Over 90% of roughly 213,000 workers used an internal version of Erica last spring. The bank runs an AI academy for upskilling. Prompt engineering, model design, development. Internal mobility filled 44% of open jobs in recent years partly through these programs. People adapt. Roles evolve.
CEO Brian Moynihan has spoken repeatedly on trust. In a Forbes conversation he tied AI success in banking to accuracy and human oversight. The bank invests for the long term. It avoids hype. Results already appear in client numbers and efficiency gains. Yet risks remain. Legacy infrastructure. Regulatory scrutiny. Rapid change in model capabilities. Capital spending on AI across the industry continues to climb.
Recent research from BofA Global Research points to hyperscalers pouring more than $700 billion into AI infrastructure this year. That figure approaches 100% of their operating cash flow. Debates rage on payback timelines. Some see productivity gains arriving slower than markets priced. Others point to expanding usage that lifts overall demand. Bank of America itself publishes views on AI’s broader economic effects. Haim Israel, head of global thematic investing at BofA, noted unprecedented rates of adoption spreading across sectors.
So the dividend holdout feels almost secondary. Yes, shareholders will likely see an increase soon. History and capital levels support it. But the bigger story sits in technology allocation. In the deliberate shift toward transformative AI projects. In the billions spent quietly over more than a decade that now generate 30 billion client touches a year.
Peers raised dividends. Bank of America raised the bar on digital engagement. Both matter. One delivers immediate income. The other positions the franchise for years ahead. Markets may eventually close the valuation gap. Until then the combination of a superior yield, credible AI execution and imminent capital return creates a distinct profile among big banks.
Second-quarter earnings will bring updates on all fronts. Dividend decision. Loan growth. Expense trends. AI milestones. Investors will parse every word. The holdout phase ends soon. The technology commitment clearly does not.
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