Bank of America is committing $25bn of its own capital to private credit transactions, joining Wall Street rivals in deploying balance sheet funding into the $1.8tn market, according to Bloomberg sources. The bank will originate deals through its global capital markets division, extending its direct lending activities and investing directly into private credit opportunities.

This move positions Bank of America among the last major US banks to make a formal capital allocation to the asset class. Last year, JPMorgan Chase set aside an additional $50bn for similar activity, while Goldman Sachs has expanded its presence through its asset management arm. Bank of America appointed Anand Melvani as head of private credit within global capital markets, who will retain his role as head of Americas leveraged finance.

The commitment reflects intensifying competition between banks and alternative asset managers as private credit continues to absorb market share from syndicated loans. However, the sector has faced increased scrutiny over valuations and asset quality. By allocating $25bn of internal capital, Bank of America signals a structural shift toward balance sheet-backed private lending as traditional financing channels fluctuate.