Major US banks show strong performance amid Trump tariffs

ISTANBUL

Major banks in the US showed strong performance in their second-quarter financial results amid President Donald Trump’s tariffs and their uncertainties, pointing to the continuing strength of the US economy.

It was feared that Trump’s tariffs on major trading partners would change the global economic outlook, while the Fed and other central banks were expected to have a narrower policy space during the fight against inflation.

Global markets have turned volatile since Trump’s sweeping reciprocal tariffs were announced on April 2. The escalating tensions between the US and China, Mexico and Canada about tariffs heightened the already existing risks, while the growing debt burden of the US deepened economic concerns.

Moody’s downgraded the US’s credit rating from Aaa to Aa1, citing rising public debt and interest payments.

The second-quarter performance sheets of leading US banks serve as an important indicator and reminder that the country’s financial sector’s resilience continues, and it continues to strengthen the US economy at large.

Wells Fargo’s revenue climbed 0.6% year-on-year to $20.8 billion in the second quarter, while the net profits rose around 12% on an annual basis, totaling $5.5 billion. Its earnings per share increased to $1.6 in the second quarter of 2025 versus $1.33 in 2024’s second quarter.

Citigroup’s net profit soared 25% year-on-year to $4 billion, its revenue was up 8% to $21.7 billion, and its earnings per share rose from $1.52 to $1.96.

Bank of America’s net profit increased 3% on an annual basis to $7.1 billion, while its revenue reached $26.5 billion, up 4%, and earnings per share came in at $0.89 versus $0.83 in the second quarter last year.

Morgan Stanley’s revenue rose 12% year-on-year to $16.8 billion in the second quarter, while net profit increased 15% to $3.5 billion, and earnings per share climbed from $1.82 to $2.13.

Goldman Sachs’ net profit hit $3.7 billion, rising 22%, while revenue climbed 15% to $14.6 billion, and earnings per share rose from $8.62 to $10.91.

Meanwhile, JPMorgan Chase’s revenues fell 11% to $44.9 billion, net revenue declined 17% to $14.9 billion and earnings per share fell from $6.12 to $5.24.

Consumer behavior remains strong despite tariffs

Rahmi Incekara, an assistant professor of economics at Istanbul-based Bahcesehir University, told Anadolu that the balance sheet season of financial institutions in the US started positively and continued to the second quarter with above-estimate revenue and profits.

Incekara stated that the US stock markets saw new records, leading to optimism about the earnings season of banks.

“Strong balance sheets from major US firms and the strong retail data from the country contributed to the optimism that the markets will be able to sustain tariffs and volatile trade policies,” he said.

Incekara noted that consumer spending in the US remained strong despite Trump’s tariffs.

“This shows the demand is still strong,” he said. “The US labor market is also resilient, as the initial jobless claims fell to 221,000 — a three-month low.”

He emphasized that the labor market’s strength supports growth estimates. “These positive data indicate the strength of the US economy led Fed officials to establish that there’s no need to rush to lower rates.”

Incekara stated that geopolitical tensions, tariff-induced uncertainties, and Trump’s threats to remove Fed Chair Jerome Powell are some of the most significant risks threatening the optimistic outlook.