America’s Largest Banks Deliver a Record Quarter
The second quarter delivered one of the strongest earnings seasons the U.S. banking industry has experienced in years. America’s six largest banks significantly exceeded expectations as improving capital markets activity, record trading revenues, resurging investment banking, resilient lending businesses, and healthy credit quality combined to produce strong results. Beyond the headline numbers, management teams consistently described healthy consumers, improving corporate confidence, expanding client activity, and a favorable backdrop for strategic transactions. Because banks sit at the center of nearly every financial transaction, their results provide one of the clearest real-time indicators of the health of the broader economy. This quarter’s earnings suggest businesses are investing again, consumers remain resilient, and capital markets are operating at their healthiest levels in several years.
Capital Markets Continue to Reopen
Perhaps the most important takeaway from earnings season was the continued reopening of capital markets. The industry saw increasing merger and acquisition activity, stronger equity issuance, robust debt financing, and improving CEO confidence as corporations became more willing to pursue strategic initiatives. Goldman Sach’s investment banking advisory backlog reached its highest level in five years even with sponsor-backed transactions remaining below historical averages, suggesting meaningful upside still exists. The other banks described similarly healthy pipelines with broad-based activity across industrials, technology, and healthcare, while also noting that the current regulatory environment has become increasingly supportive of corporate transactions.
Equities Trading Delivers Historic Results
The defining earnings story of the quarter was extraordinary strength across equities trading businesses. Elevated market volatility, stronger institutional client engagement, increased IPO activity, and active capital markets combined to generate record results across every major bank.
Goldman Sachs led with a record $7.42 billion of equities trading revenue, surpassing consensus estimates by 48% while delivering their third consecutive quarter of record stock trading activity.1 Additionally, JPMorgan saw equities trading revenue of $6.03 billion, an extraordinary 86% increase from a year ago that exceeded even the highest analyst estimate.2 Bank of America reported equities trading revenue of $3.62 billion, increasing nearly 70% from last year and contributing to a record first half for the business.3 Citigroup delivered 45% growth in equities trading, supported by record prime brokerage balances4, while Wells Fargo reported equity trading revenue increasing 64% year over year.5 Across the industry, management teams consistently emphasized that institutional clients remained highly engaged as investors repositioned portfolios, raised capital, and navigated shifting macroeconomic conditions. The breadth of these results demonstrates the significant operating leverage banks possess when capital markets become more active.
Investment Banking Accelerates as Investment Broadens
The recovery in investment banking gained significant momentum during the second quarter as advisory activity, equity underwriting, and debt issuance all exceeded expectations. Goldman Sachs led the group with investment banking revenue of $3.40 billion, an increase of 55% from a year ago6, while Bank of America reported investment banking revenue of $2.14 billion, rising 50%, supported by a 68% increase in advisory fees, 63% growth in equity underwriting, and a 33% increase in debt underwriting.7 Wells Fargo also delivered strong results with investment banking fees of $939 million, approximately 13% above analyst expectations, while total investment banking revenue increased 36%.8 During the first half of 2025, large-cap corporate M&A volumes increased approximately 90%, reinforcing the broad recovery in strategic activity.
An increasingly important catalyst behind this activity is the multi-year buildout of artificial intelligence infrastructure. Management across the banks emphasized how AI-related investment is expanding well beyond the technology sector, creating financing opportunities across industrials, utilities, energy, communications infrastructure, and real estate. Data center financing remains one of today’s most active areas within capital markets, as AI adoptions are still in its early innings. As companies continue investing in AI infrastructure and digital transformation, banks are seeing increased demand for advisory services, capital raising, project financing, and strategic transactions across an expanding number of industries.
Wealth Management Continues Building Momentum
The quarter also demonstrated the continued strength of wealth management and private markets. Morgan Stanley attracted an impressive $148 billion of net new assets during the quarter, bringing total client assets to more than $10 trillion while generating an industry-leading 34% pretax margin.9 Management noted that stock plan assets associated with recent IPO activity represented more than half of quarterly net interest income growth, illustrating how liquidity events continue creating opportunities across multiple business lines. Goldman Sachs also reported its 34th consecutive quarter of positive wealth management inflows, increasing assets under supervision to approximately $2 trillion.10 Goldman also highlighted that investment bankers generated more than 900 referrals into its wealth management platform during the quarter, reinforcing the increasingly valuable relationship between advisory services and long-term asset management. These businesses continue providing diversified sources of recurring fee income while allowing banks to participate throughout the entire corporate lifecycle, from private fundraising and lending to IPO execution and ultimately long-term wealth management.
Traditional Banking Businesses Remain Healthy
While capital markets generated the headlines, traditional banking operations continued providing stable earnings growth. Bank of America reported net interest income of $16.16 billion, increasing more than 9% from last year and running ahead of management’s full-year outlook.11 Citigroup exceeded expectations with net interest income of $17.13 billion, outperforming estimates by approximately 7% following the successful integration of the remaining American Airlines credit card portfolio.12 Morgan Stanley also exceeded expectations as higher client cash balances and stronger loan growth supported net interest income, with management expecting another sequential increase during the third quarter. Increased lending against client equity portfolios also contributed to growth, while Bank of America expanded loans by more than 6% year over year to $1.22 trillion.13 Increasing client demand across corporate and investment banking businesses emphasize that balance sheet deployment remains driven by customer activity rather than more aggressive risk taking.
The industry’s financial strength was further validated by the Federal Reserve’s annual stress test in the second quarter. The test found that collectively, the banks were in a healthy financial position and were capable of absorbing more than $700 billion in losses in a worst-case-scenario recession simulation. That strength is allowing banks to return more capital to shareholders. JPMorgan announced a new $50 billion share repurchase program and plans to increase its dividend to $1.65 per share, while Morgan Stanley raised its dividend by 15% and authorized a new $20 billion buyback program. Goldman Sachs increased its dividend by 11% to $5.00 per share, Citigroup raised its dividend by 12% while maintaining its $30 billion repurchase program, and Bank of America reaffirmed its $40 billion buyback authorization. These actions reflect strong balance sheets, improving earnings power, and management teams’ confidence in the outlook for the industry.
Credit Quality Reinforces a Healthy Consumer and Improving Economy
One of the most encouraging themes throughout earnings season was the continued resilience of the U.S. consumer and the broader economy. Despite elevated interest rates and ongoing geopolitical uncertainty, management teams consistently described household spending, employment, and commercial activity as positive. Bank of America outlined healthy consumer spending trends of +5% in the first half of 2026, with continued loan growth across both its consumer and commercial banking franchises. The firm’s credit losses of $1.37 billion decreased more than 14% from a year ago with net charge-offs also declining more than 7%. JPMorgan similarly described consumer and corporate activity as resilient, reporting net charge-offs of $2.37 billion and a June charge-off rate of just 1.62%.
Credit metrics remained equally constructive across the remainder of the industry. Wells Fargo reported loss provisions of only $914 million, approximately 24% below analyst expectations, while maintaining a low net charge-off ratio of just 34 basis points. Goldman Sachs recorded minimal credit provisions of only $102 million, reflecting limited stress across its lending portfolio, while Citigroup continued benefiting from healthy consumer credit trends alongside improving institutional client activity.
An important takeaway from the quarter was that banks are not simply reporting low credit losses, they are also seeing continued engagement from both consumers and businesses. Loan demand remains healthy, client activity continues to increase, and corporate investment is accelerating as confidence improves. Even as competition for lending opportunities has intensified, management teams consistently emphasized disciplined underwriting and strong balance sheets over pursuing growth at any cost. That combination of resilient spending, healthy credit performance, and prudent risk management provides a constructive backdrop for both the banking sector and the broader economy as we move into the second half of the year.
[1] Goldman Sachs Earnings Call: As of July 14, 2026
[2] JPMorgan Earnings Call: As of July 14, 2026
[3] Bank of America Earnings Call: As of July 14, 2026
[4] Citigroup Earnings Call: As of July 14, 2026
[5] Wells Fargo Earnings Call: As of July 14, 2026
[6] Goldman Sachs Earnings Call: As of July 14, 2026
[7] Bank of America Earnings Call: As of July 14, 2026
[8] Wells Fargo Earnings Call: As of July 14, 2026
[9] Morgan Stanley Earnings Call: As of July 15, 2026
[10] Goldman Sachs Earnings Call: As of July 14, 2026
[11] Bank of America Earnings Call: As of July 14, 2026
[12] Citigroup Earnings Call: As of July 14, 2026
[13] Bank of America Earnings Call: As of July 14, 2026
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