Wells Fargo, JPMorgan, and Citi beat expectations, but loan growth and trade tensions remain key concerns
Some of the largest US banks reported stronger-than-expected second-quarter profits on Tuesday, pointing to resilience in corporate activity and consumer spending. However, caution remains as interest rate pressures and tariff uncertainty shape the second half of 2025.
Wells Fargo, the country’s fourth-largest lender, reported a net income of $5.49 billion for the quarter ending June 30, up from $4.91 billion during the same period last year. Adjusted earnings reached $1.54 per share, exceeding Wall Street expectations of $1.41, according to LSEG estimates.
The upbeat result was tempered by a revised net interest income (NII) forecast for the full year. The bank now expects NII to be roughly flat compared to 2024’s $47.7 billion, reversing earlier guidance for modest growth.
Chief financial officer Mike Santomassimo explained the shift was driven by a capital reallocation into market-facing businesses that generate little or no interest income.
“We’ve seen some clients acting cautiously when it comes to borrowing, especially in light of proposed new tariffs,” Santomassimo said during a media briefing.
Wells Fargo’s credit loss provisions declined to $1.01 billion, down from $1.24 billion a year ago. Meanwhile, investment banking fees rose 9%, totaling $696 million, supported by increased advisory activity.
A key development during the quarter was the Federal Reserve’s removal of a seven-year asset cap, originally imposed after Wells Fargo’s fake accounts scandal. With that restriction lifted, CEO Charlie Scharf said the bank is positioned to expand.
“We now have the flexibility to proactively grow deposits and to allocate capital to grow loans and our corporate investment bank,” he told analysts. "We expect to be more aggressive in our pursuit of consumer and corporate deposits, and we will selectively look to grow loans, though we will be cautious during periods of economic uncertainty."
Meanwhile, JPMorgan Chase delivered a standout performance, with $15 billion in Q2 profits, boosted by robust M&A advisory fees. JPMorgan CEO Jamie Dimon took a more optimistic tone than earlier this year, calling the economy “resilient” and noting deregulation and tax reform as positive trends.
Read next: Fed says major US banks can withstand downturn in 2025 stress test
Citigroup also posted stronger-than-expected earnings, though it struck a more cautious tone about the economic outlook. Citigroup CFO Mark Mason said the long-term effects of tariffs and inflation remain difficult to forecast, warning that the full impact could still be “unknown.”
Despite mixed signals across the economy, bank stocks remain solid performers. Wells Fargo shares are up 12.5% year-to-date, while JPMorgan’s stock has climbed 20%, outperforming the broader S&P 500, which has risen 6.5%.
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