In the second quarter of 2025, major U.S. banks are poised to report increased profits, buoyed by strong trading activities and a modest revival in investment banking. JPMorgan Chase, Citigroup, and Wells Fargo are among the institutions expected to announce earnings that surpass analyst expectations. This positive trend is largely attributed to a recovery in mergers and acquisitions, which had previously reached a 20-year low in April. The resurgence in deal-making has bolstered investment banking revenues, while ongoing macroeconomic and geopolitical uncertainties have kept trading revenues robust. Analysts anticipate that these factors will contribute to low-to-mid single-digit growth in net interest income and improved credit quality among borrowers.
The favorable earnings reports come amid a deregulatory environment under President Trump, with banks recently passing the Federal Reserve's stress tests. Notably, JPMorgan is expected to report a 5% increase in earnings per share, Bank of America a 7% rise in net interest income, and Goldman Sachs an 11% boost in earnings per share. Morgan Stanley projects a 7% gain, while Citigroup and Wells Fargo are also anticipated to post earnings growth. These developments reflect a resilient banking sector that continues to adapt and thrive despite economic uncertainties.
Key Takeaways
- Major U.S. banks set to report increased Q2 profits.
- Recovery in mergers and acquisitions boosts investment banking.
- Trading revenues remain strong amid global uncertainties.
- Analysts expect low-to-mid single-digit growth in net interest income.
- Banks pass Federal Reserve's stress tests, indicating financial stability.