By Catherine Baab

 

NEW YORK, 14 January. - (ANA) - This week will show just how good 2025 was for the big banks. JPMorgan Chase will lead off bank earnings season on Tuesday morning, followed by Bank of America, Citigroup, and Wells Fargo on Wednesday. Goldman Sachs and Morgan Stanley will finish the week's big bank lineup on Thursday.

 

 

 

 

 

Following a year in which rising asset prices and market volatility once again favored the high-end of the k-shaped economy, analysts are forecasting record annual profits at the major banks, fueled by booming trading revenue, a sharp increase in deal-making activity, and continuing demand for loans.

 

Strong earnings as well as multiple expansion have already powered bank stocks higher. Last year, shares of all six major banks outperformed the S&P 500, in some cases by wide margins. By the same token, the KBW Nasdaq Bank Index rocketed some 30%, handily surpassing the S&P’s 17% gain. Some analysts are already predicting a third consecutive year of bank outperformance in 2026 — a run last seen in the late 1990s and early 2000s.

 

That optimism rests on a familiar combination of factors. Chief among them, lower interest rates later in 2026 could support loan demand and risk appetite across the system. Analysts continue to point to strong demand for investing services and wealth management.

 

 

 

 

Still, there’s a fresh source of uncertainty threatening the bullish consensus.

 

Over the weekend, President Donald Trump said credit-card issuers would be “breaking the law” if they fail to cap interest rates at 10% for one year as he has demanded. There's been no actual policy to this effect, let alone actual legislation, making it a dramatic, extra-legal demand aimed squarely at one of the most profitable corners of consumer banking. Credit card rates have hovered around 20% in recent years, and Trump appeared to set a Jan. 20 deadline for compliance.

 

Shares of marquee-name card issuers sold off in the run-up to Monday’s market open, helping to drag down the overall banking sector. While industry lobbying and legal challenges would likely prevent or blunt any enforcement, if any is attempted, the episode suggests banks remain exposed to political risk and policy whiplash. At the same time, some analysts recognize that White House comments may be designed to bring banks to the table — politically or financially — instead of imposing an actual cap.

 

That’s because consumer credit-card interest rates are decided not by presidential fiat but by a tangle of decades-old statutes as well as regulators and Supreme Court precedent. In other words, he president does not have clear authority to impose a nationwide cap on credit-card interest rates without congressional action, making the comments more credible as populist theater, political pressure, or both — not actual policy.

 

 

 

 

In any case, the tension will likely loom over earnings calls this week, and may function to ensure that prominent CEOs remain even more restrained in their remarks on policy and the economy.

 

On the one hand, executives are set to report what’s likely to have been a banner year. On the other, they’ll likely find themselves fielding questions about whether some parts of the profit engine — in particular consumer credit — have become a political target du jour.   - (ANA) -

 

AB/ANA/13 January 2026 - - -