Oct 21, 2026 · 19 min · 11 segments
Get ready for an overview of the US banking earnings, with Mohammed Nalla identifying three key themes to watch. The battle between Wall Street and Main Street is fascinating. JPMorgan had a rare…
The Finance GhostHost
Mohammed NallaHost
Yeah, Ghost, I'm going to jump right into it because I think in short, they're signaling that we're not in a recession in the US, or at least not yet.
One would be, are the banks still growing? The second one would be, what's happening with credit quality? And then most importantly, I would say is, where are these banks actually making their money? So jumping into it onto the first point on growth, I would say it's broadly positive.
And if we look at the biggest one there, we look at JP Morgan, their average loans rose 10%, their deposits grew 8%.
And then Wells Fargo, which I would see more as a main street bank, they grew both loans and deposits by around 11%.
And interestingly enough, the net interest income also increased, I would say, across the board on those three.
There are some cracks below the headlines, but in aggregate, activity levels looking relatively strong.
That bodes well, right? Net interest income is the most traditional metric in banking.
And if that's going well, then I guess that suggests good things for the consumer, perhaps.
Yeah, I would say that the consumer in the US remains resilient, but not invincible, right? We've seen some of the headline data indicating some of the cracks.
If we look at something specifically like card spend, which is a good proxy for consumer activity, that rose around 10% at JP Morgan, 11% at Citi, and in aggregate, loan balances are growing, and most consumers are still keeping up with their repayments.
But the problem with higher rates, as we've seen in the US, is that they do cut both ways.
I mean, they can support bank interest income, but they also raise deposit costs.
So if rates stay high for long enough, I think credit losses will eventually start to follow through.
And what we've seen is we've had these reserve bills at Citi and at Wells, and those are worth watching because even though the actual credit data remains fairly benign, it is actually a pressure point that you're going to have to see depending on how long rates stay high.
Now, this brings me nicely to the second point I wanted to raise, which was credit quality.
Yeah, Ghost, I'm going to jump right into it because I think in short, they're signaling that we're not in a recession in the US, or at least not yet.
One would be, are the banks still growing? The second one would be, what's happening with credit quality? And then most importantly, I would say is, where are these banks actually making their money? So jumping into it onto the first point on growth, I would say it's broadly positive.
And if we look at the biggest one there, we look at JP Morgan, their average loans rose 10%, their deposits grew 8%.
And then Wells Fargo, which I would see more as a main street bank, they grew both loans and deposits by around 11%.
And interestingly enough, the net interest income also increased, I would say, across the board on those three.
There are some cracks below the headlines, but in aggregate, activity levels looking relatively strong.
That bodes well, right? Net interest income is the most traditional metric in banking.
And if that's going well, then I guess that suggests good things for the consumer, perhaps.
Yeah, I would say that the consumer in the US remains resilient, but not invincible, right? We've seen some of the headline data indicating some of the cracks.
If we look at something specifically like card spend, which is a good proxy for consumer activity, that rose around 10% at JP Morgan, 11% at Citi, and in aggregate, loan balances are growing, and most consumers are still keeping up with their repayments.
But the problem with higher rates, as we've seen in the US, is that they do cut both ways.
I mean, they can support bank interest income, but they also raise deposit costs.
So if rates stay high for long enough, I think credit losses will eventually start to follow through.
And what we've seen is we've had these reserve bills at Citi and at Wells, and those are worth watching because even though the actual credit data remains fairly benign, it is actually a pressure point that you're going to have to see depending on how long rates stay high.
Now, this brings me nicely to the second point I wanted to raise, which was credit quality.
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