BACBank of America Corporation

Bank of America is a retail banking giant whose profit depends more than most on the gap between deposit rates and asset yields.

The base is an enormous retail deposit franchise, the cheapest form of funding. The bank places that money into loans and a bond portfolio, and net interest income is the dominant line in results. Because the securities book is so large, the bank is unusually sensitive to rate moves: when rates rise, older low-yield bonds lose value; when they fall, the interest margin compresses.

Alongside retail sit a corporate bank, an investment bank and wealth management through Merrill. Fee income from those smooths the rate cycle without offsetting it: retail weighs more here than at competitors with a large trading arm.

The key risk is credit: provisions on cards and consumer loans rise at the first signs of economic weakness and hit profit before actual delinquencies appear. Capital requirements constrain buybacks. The bank pays a dividend.