Bank of America has earmarked $25 billion of its balance sheet for private-credit transactions, signaling a formal push into the rapidly growing $1.8 trillion direct-lending market. Capital deployment will occur through its global capital-markets division, extending existing direct-lending efforts and leveraging the firm’s investment-banking platform.

Anand Melvani, with three decades at the firm and current head of Americas leveraged finance, has been named head of private credit within global capital markets, reporting to Chris Munro. Scott Wiate will serve as head of private credit, structuring and underwriting, reporting to Bruce Thompson, vice chair and head of enterprise credit.

The commitment puts Bank of America alongside JPMorgan’s $50 billion dedication and other Wall Street rivals such as Goldman Sachs, Wells Fargo and Citigroup expanding private-credit footprints. Heightened investor scrutiny on valuations and underwriting quality follows recent writedowns and withdrawal restrictions at peer private-credit funds, underlining the need for disciplined risk management.

Bank of America projects the S&P 500 will reach 7,100 by year-end 2026 and forecasts earnings-driven PE multiple compression, citing that the index is expensive on 18 of 20 valuation metrics. The bank expects those valuation headwinds to weigh on capital markets activity and trading volumes.