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A booming stock and bond market is bringing major U.S. banks billions in profits. (File photo)
Keystone
High interest income and securities trading revenue brought the major U.S. financial institutions unexpectedly high profits last quarter. JPMorgan Chase, the largest U.S. bank, even posted the highest quarterly profit in its history.
This was due to its stake in the credit card provider Visa. Goldman Sachs, Wells Fargo, Citigroup, and Bank of America also saw surprisingly strong gains.
JPMorgan benefited from robust revenue growth in nearly all business segments in the second quarter. In addition, the bank realized a one-time gain from its decades-long stake in the credit card provider Visa by exchanging its existing shares for other types of stock in the payment company. The gain from this transaction amounted to $4.6 billion, although JPMorgan had generated even more profit in previous years through similar moves.
Overall, the bank's quarterly net income jumped 41 percent year-over-year to just under 21.2 billion U.S. dollars (18.6 billion euros). Even without this one-time item, JPMorgan would have exceeded analysts' forecasts.
At the same time, bank CEO Jamie Dimon sees greater efficiency through AI: He told analysts that, in some positions, the bank has been able to cut up to 40 percent of jobs thanks to artificial intelligence.
Business was also strong at the investment bank Goldman Sachs. A boom in stock and bond trading brought the bank a profit of $6.6 billion in the second quarter, a 78 percent increase.
Growth was seen across the board: The bank’s total revenue rose by 39 percent to $20.3 billion. Revenue from equity trading surged by more than 70 percent, while revenue from bond, currency, and commodity trading increased by just under a third. Fee income from advising on initial public offerings and other capital raising activities grew by more than half, and net interest income rose by a good quarter.
Citigroup also posted much stronger growth than experts had anticipated. CEO Jane Fraser had imposed a strict cost-cutting program on the bank, and now things were looking much brighter. As a result, the bank increased its revenue by 14 percent to $24.8 billion. Equity trading alone generated about 45 percent more revenue than a year earlier. Because the bank’s costs rose by only 5 percent and bad loans were less costly, net income also jumped by 45 percent to $5.8 billion.
The situation was similar at Bank of America. Revenue rose by about 15 percent to $31.6 billion. In equity trading, revenue grew by as much as 70 percent. The bank set aside less money for potential loan defaults, and as a result, net income grew by about a quarter to $9.1 billion.
The major bank Wells Fargo also benefited from its investment banking operations. With a profit of $6.4 billion in the second quarter, it earned about 17 percent more than in the previous year. Revenue grew by 9 percent to $22.6 billion. “We are clearly benefiting from the broad-based economic strength in the U.S.,” said CEO Charlie Scharf.
14.07.2026, 17:28
