Major U.S. banks opened the second-quarter reporting season, a period when markets have faced heightened volatility due to the trade war and political tensions. Three of the top 5 banking giants - JPMorgan, Wells Fargo and Citi - beat Wall Street expectations on revenue and earnings but presented a mixed picture of interest income, alarming investors. The head of JPMorgan warned that risks to the sustainability of the U.S. economy have gone nowhere;

 Details

-JPMorgan. The largest U.S. bank by assets reported second-quarter earnings per share better than Wall Street expectations: $5.24 versus $4.48, reports Barron's. The bank's net income fell 17% year-over-year to $15 billion.The bank indicated that quarterly earnings were impacted by a one-time factor, a $774 million tax benefit that earned JPMorgan an additional 28 cents per share. Revenue for the past quarter totaled $44.9 billion - 2.5% above analysts' forecasts at FactSet, but 11% below the same period last year. Net interest income - the difference between a bank's interest income (e.g., from loans) and the interest it pays - rose 2% to $23.3 billion. JPMorgan raised its net interest income forecast for 2025. 

JPMorgan CEO Jamie Dimon said in a press release that the U.S. economy "remained resilient" in the second quarter. "The completion of tax reform and possible regulatory relief are positive for the economic outlook. However, significant risks remain - including duties and trade uncertainty, a deteriorating geopolitical environment, high budget deficits and inflated asset prices," he said, adding that he "hopes for the best" but is preparing the bank "for a wide range of scenarios."

- Wells Fargo. The bank alsobeat Wall Street's expectations for earnings and revenue. Second-quarter earnings came in at $1.6 per share versus analysts' forecasts of $1.41, and revenue came in at $20.8 billion, while Wall Street expected $20.7 billion, notes Barron's. Additionally, the bank earned $253 million in profit (or 6 cents per share) thanks to a buyout of its remaining stake in its jointly owned merchant services business. Meanwhile, Wells Fargo's net interest income missed analysts' forecasts, falling 2% year-over-year to $11.7 billion versusWall Street expectations of $11.8 billion, due in part to lower floating asset rates and changes in deposit mix. After a weak quarter, the bank worsened its net interest income forecast for the year. 

"Despite continued risks, business activity remains solid and the quality of our loan portfolio indicates strong financial positions for our corporate and retail customers," Wells Fargo CEO Charlie Scharf said in a statement. After the Fedremoved the cap on the bank's asset size last month, Wells Fargo is now "able to grow in ways that were not previously possible and to be more active with customers, businesses and communities, supporting the growth of the U.S. economy," Scharf added.

- Citigroup. The third-largest U.S. bank by assets also beat analysts' earnings and revenue forecasts for the past quarter, reports Barron's. Citi's earnings per share came in at $1.96 - nearly 22% above Wall Street expectations of $1.61 - and revenue rose 8%  year-over-year to $21.7 billion - versus market forecasts of $20.96 billion. Second-quarter net income rose a quarter year-over-year to $4 billion. Net interest income added 12%. 

"With revenue growth of 8%, the [corporate] services line of business continues to prove why this high-margin business is considered our top asset. The markets line of business delivered its best second quarter result since 2020, and the equities segment had a record second quarter," said Citi CEO Jane Fraser.

BlackRock. The world's largest investment company reported mixed results: earnings came in better than Wall Street forecasts, but revenue fell a bit short. Earnings per share came in at $10.19 versus expectations of $10.06, and adjusted EPS came in at $12.05 versus forecasts of $10.78. Revenue was $5.42 billion, compared to Wall Street's estimate of $5.45 billion. BlackRock's assets under management rose 18% year-over-year to a record $12.5 trillion. BlackRock attracted $68 billion in net inflows in the second quarter instead of the expected $89.5 billion due to the withdrawal of $52 billion by a major client from index funds, notes Barron's. Inflows into long-term products totaled $46 billion versus a forecast of $110.1 billion, with the company attracting a record $192 billion in ETFs, mostly bond funds, in the first half of the year. Funds and capital inflows are key indicators of a management company's health, Barron's explains.

- Bank of New York Mellon. Itreported second-quarter earnings of $1.93 per share and revenue of $5 billion, both beating Wall Street forecasts of $1.75 billion and $4.78 billion, respectively, reports Barron's. Net interest income rose 17% year-over-year to $1.2 billion. Assets under management under custody rose 13% to $55.8 trillion, making BNY the largest custodian in the world, Barron's reports.

How did the stock react

Quotes of JPMorgan dropped by more than 1% in trading on July 15, but they are up nearly 20% since the beginning of the year. Shares of Wells Fargo collapsed by more than 5% immediately - to a three-week low. Compared with the start of 2025, they are now worth about 12% more. BlackRock slumped even further - by nearly 7%, to its lowest since late June. The company's market value has now added about 1.4% since the start of the year. Shares of Bank of New York Mellon were nearly unchanged in trading on July 15, and have added more than 24% since the beginning of the year.

Investors reacted positively only to the report of Citi, which improved the forecast for net interest income in 2025. Thus, the stock jumped an immediate 3.6% and hit its highest since 2008. Since the beginning of 2025, Citi's market value has risen nearly 27%.

This article was AI-translated and verified by a human editor

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