The largest U.S. banks are days away from what could be the most consequential earnings season in years — not because the numbers will be bad, but because they might be surprisingly good at a moment when the rest of the economy is bracing for pain.
JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley are all set to report second-quarter results beginning the week of July 14. Analysts expect solid performances across the board, driven by resilient net interest income, a rebound in capital markets activity, and corporate clients who kept dealmaking alive even as tariff uncertainty roiled global trade. The question isn’t whether profits will hold up. It’s whether bank executives will sound the alarm on what’s coming next.
Interest Income Holds the Line — For Now
Net interest income, the bread and butter of commercial banking, is projected to come in strong. According to Yahoo Finance, analysts polled by Visible Alpha expect JPMorgan to post $23.4 billion in NII for the second quarter, essentially flat with the prior quarter but up from the year-ago period. Wells Fargo is forecast at roughly $11.8 billion, while Bank of America should report approximately $14.5 billion.
These aren’t blowout numbers. But they’re steady, and steady counts for a lot right now.
The Federal Reserve held rates unchanged through the quarter, keeping the benchmark federal funds rate in the 5.25%-5.50% range. That’s created a favorable spread environment for banks with large deposit franchises. Funding costs have stabilized. Loan yields remain elevated. And deposit migration — the great fear of 2023 and early 2024, when customers fled low-rate checking accounts for high-yield alternatives — has largely run its course.
Still, there are cracks. Loan growth has been tepid across the industry. Commercial and industrial lending, a bellwether for business confidence, has barely budged. Consumers are still borrowing on credit cards, but mortgage origination remains suppressed by rates above 6.5%. Banks are making more on each dollar they lend, but they’re not lending dramatically more dollars.
The real test will be forward guidance. If the Fed cuts rates later this year — markets are pricing in at least one reduction by December — NII at the biggest banks could compress in the back half of 2025. JPMorgan CEO Jamie Dimon has been characteristically blunt about the uncertainty, telling investors in recent months that the economic outlook remains clouded by geopolitical risk and fiscal policy questions. His tone on the earnings call will matter as much as the numbers themselves.
Trading desks, meanwhile, likely had a strong quarter. Volatility was elevated through much of the period, particularly in equities and commodities, as markets digested shifting tariff policies, AI-driven sector rotations, and persistent inflation data. Goldman Sachs and Morgan Stanley, the two firms most exposed to capital markets revenue, are expected to benefit disproportionately.
Goldman’s equities trading division has been on a tear. The firm reported its best equities trading quarter ever in Q1 2025, and analysts expect a follow-through performance in Q2, albeit likely not at the same record pace. Fixed income, currencies, and commodities trading — the so-called FICC business — should also contribute meaningfully, particularly at JPMorgan, which has built the largest FICC operation on Wall Street.
Investment banking fees are the wildcard. M&A advisory revenue has been recovering from the drought of 2023, but the pace has been uneven. Several large deals closed or advanced during the quarter, including transactions in energy, technology, and healthcare. Equity and debt underwriting pipelines have strengthened. But some deals that were expected to launch got delayed by tariff-related market volatility in May and June, pushing potential fee revenue into the third quarter or beyond.
According to reporting from Yahoo Finance, Wall Street consensus estimates suggest aggregate investment banking fees across the six largest banks could be up 10%-15% year over year — a meaningful recovery, though still well below the frenzy of 2021.
Credit Quality: The Elephant Everyone’s Watching
Here’s where things get complicated.
On the surface, credit quality metrics look manageable. Net charge-offs have ticked higher, primarily in credit cards and auto loans, but remain below historical averages. Nonperforming loan ratios are low. Delinquency rates, while rising, haven’t spiked.
But bank executives and their risk officers are staring at a murkier picture beneath the headline numbers. Consumer savings buffers, built up during the pandemic, have largely been depleted for lower-income households. Credit card balances have surged past $1.1 trillion nationally. And the labor market, while still technically strong, has shown signs of cooling — hiring has slowed, temporary employment has declined, and wage growth has decelerated.
The tariff situation adds another layer of complexity. The Trump administration’s trade policies have introduced significant uncertainty for corporate borrowers, particularly in manufacturing, retail, and agriculture. Banks have been building reserves against potential deterioration. JPMorgan added to its credit reserves in Q1 2025, and analysts expect further provisioning this quarter across the industry.
Provision for credit losses across the big six is expected to total roughly $9-10 billion for Q2, up from approximately $8 billion a year ago. Not catastrophic. But the trend is unmistakably upward.
Citigroup, which has significant international exposure and a large credit card portfolio, may face particular scrutiny. CEO Jane Fraser has been executing a multi-year simplification strategy, exiting non-core markets and refocusing on wealth management and institutional banking. The transformation is showing results — expenses are coming down, and the firm’s return on tangible common equity has been improving. But any deterioration in consumer credit could complicate the narrative.
Wells Fargo presents a different story. The bank is still operating under the Federal Reserve’s asset cap, imposed in 2018 following the fake-accounts scandal. CEO Charlie Scharf has made progress on regulatory remediation, and there’s growing speculation the cap could be lifted within the next 12-18 months. A strong quarter would bolster the case. A weak one — or any hint of new compliance issues — would set the timeline back.
Bank of America, under CEO Brian Moynihan, has positioned itself as the steady hand of the group. The bank’s massive deposit base gives it a natural advantage in a high-rate environment, and its wealth management division, anchored by Merrill Lynch, continues to generate consistent fee income. Analysts expect BofA to report earnings per share of roughly $0.95-$1.00, up modestly from the prior year.
Morgan Stanley’s results will hinge on wealth management and institutional securities. CEO Ted Pick, who took over from James Gorman in January 2024, has maintained the firm’s strategic focus on durable, fee-based revenue streams. Assets under management in the wealth division have likely benefited from market appreciation during the quarter, boosting advisory fees.
And then there’s the regulatory backdrop. Bank capital requirements remain in flux. The Basel III endgame proposal, which would have significantly increased capital charges for the largest banks, has been substantially watered down after intense industry lobbying. But final rules haven’t been issued. Banks are operating in a state of regulatory limbo — holding more capital than they’d like, but uncertain exactly how much they’ll ultimately need.
This matters for shareholders. Excess capital gets returned through buybacks and dividends. All six major banks are expected to announce updated capital return plans following the Fed’s annual stress test results, which were released in late June. Early indications suggest the banks passed comfortably, which should support aggressive buyback programs in the coming quarters.
Stock valuations reflect cautious optimism. JPMorgan trades at roughly 2.2 times tangible book value — a premium that reflects Dimon’s track record and the firm’s dominant market position. Goldman and Morgan Stanley trade at similar multiples. Citigroup, by contrast, still trades below tangible book, a persistent discount that Fraser is working to close. Wells Fargo sits somewhere in between, its valuation constrained by the asset cap overhang.
What the Numbers Won’t Tell You
The most important information from this earnings season won’t be in the press releases. It’ll come from the conference calls — the tone, the hedging, the carefully chosen words about the second half of the year.
Bank CEOs have better real-time economic data than almost anyone. They see consumer spending patterns through debit and credit card transactions. They see corporate borrowing decisions. They see which industries are pulling back and which are pushing forward. When Dimon or Moynihan or Fraser describes what they’re seeing on the ground, portfolio managers and policymakers listen.
So far, the signals have been mixed. Consumer spending has held up better than expected, but it’s increasingly financed by debt rather than income. Business investment has been selective — strong in AI-related infrastructure, weak in traditional manufacturing. Commercial real estate remains a sore spot, particularly office properties in major cities, though banks have largely managed their CRE exposure through gradual write-downs and loan modifications rather than sudden losses.
The tariff question looms over everything. If trade tensions escalate further, corporate confidence could deteriorate rapidly, dragging down loan demand and pushing credit losses higher. If tensions ease — or if the administration reaches deals with key trading partners — the relief rally in markets could be substantial, and banks would be among the biggest beneficiaries.
There’s also the AI factor. Every major bank is investing heavily in artificial intelligence, from fraud detection and risk modeling to customer service and code generation. JPMorgan alone has reportedly deployed AI across hundreds of use cases. But the financial impact of these investments remains difficult to quantify. Expect executives to talk about AI productivity gains in broad terms without providing specific dollar figures. The cost savings are real but incremental, and they’re being partially offset by the enormous technology spending required to stay competitive.
One thing is clear: the era of easy comparisons is over. In 2023 and early 2024, banks benefited from the rapid rise in interest rates, which supercharged NII and masked weakness in other areas. That tailwind has faded. From here, earnings growth will need to come from volume — more loans, more deals, more assets under management — rather than simply wider spreads.
That’s a harder game to play. And it’s why this earnings season matters so much. Not for the backward-looking results, which will likely be fine, but for what bank leaders say about the road ahead. The numbers are the appetizer. The guidance is the main course.
Earnings reports begin dropping on July 15, with JPMorgan, Wells Fargo, Goldman Sachs, and Citigroup all reporting that week. Bank of America and Morgan Stanley follow shortly after. By the time the dust settles, investors will have a much clearer picture of whether America’s financial giants are positioned to thrive in the second half of 2025 — or merely survive it.
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