Second quarter earnings from the big six US banks surprised to the upside, revealing a resilient core: strong trading results, stable credit quality, and a late quarter rebound in investment banking activity. Despite macro headwinds and cautious expense management, most banks beat expectations — thanks to healthy consumer behavior, rising loan demand, and fortified capital. But the real story was a focus toward high-quality, fee-driven segments like wealth management. The takeaway? Capital strength is intact, but the winners are those leaning into durable, diversified revenue streams.
Morgan Stanley beat expectations, with Equity trading up 23% year-over-year — its second-best quarter ever. Wealth management brought in $59.2 billion in new assets, while IB revenue declined but less than feared, with most activity occurring late in the quarter. Expenses were slightly elevated, and CET1 came in at a strong 15%.
Goldman Sachs delivered a solid beat, with FICC sales and trading leading the way. Net revenue rose 15% year-over-year, and IB revenue surprised to the upside, particularly in advisory. Assets under management grew 12%, while provisions were below estimates. CET1 was 14.5%.
JPMorgan beat across most major lines, including FICC, equities, and all segments of investment banking — advisory, debt, and equity underwriting. It raised its NII forecast but also its expense outlook. Loans and deposits both beat expectations, and provisions and charge-offs were lower than anticipated. Compensation costs ticked higher, and CET1 came in at 15%, slightly below the 15.4% estimate but still healthy.
Wells Fargo beat on EPS but missed on Net Investment Income and cut its NII forecast. NII is now expected to be flat year-over-year. Assets surpassed $1.95 trillion for the first time, and like JPMorgan, the bank saw a pickup in IB activity in the latter half of the quarter. CET1 remained stable at 11.1%.
Citigroup beat expectations, with traders posting their best second quarter in five years — FICC rose 20%. IB fees climbed 13% year-over-year, and US personal banking had its strongest Q2 ever. Credit costs rose but were below expectations, and the bank teased a new premium card offering to rival Amex. CET1 stood at 13%.
Bank of America delivered a strong beat in Q2. Trading was a standout, with FICC up 19% and equity trading rising 9.6%, marking a record second quarter for the trading desk. Net interest income exceeded expectations, supported by resilient consumer spending and improving asset quality. CEO Brian Moynihan noted that consumers remain healthy and commercial borrower utilization rates are rising. Investment banking revenue declined 7% year-over-year, though activity picked up meaningfully in the second half of the quarter. Provisions came in below expectations, and the bank reported a CET1 ratio of 11.5%.
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