Large United States banks are poised to report increased first-quarter earnings, buoyed by robust interest income and significant investment banking fees, according to analyst estimates. However, investors are expected to scrutinise future forecasts closely, as escalating geopolitical risks, particularly involving Iran, contribute to broader macroeconomic uncertainty. The earnings season for major lenders kicks off with Goldman Sachs reporting on Monday, followed by JPMorgan Chase, Wells Fargo, and Citigroup on Tuesday. Bank of America and Morgan Stanley are scheduled to release their results on Wednesday, April 15, covering the three months ending March 31, a period marked by global market volatility.
A significant driver for the anticipated earnings strength has been a surge in dealmaking activity during the quarter. Global markets witnessed nearly two dozen mega mergers and acquisitions valued over US$10 billion, alongside 40 deals exceeding US$5 billion, as per LSEG data. Jefferies analysts noted global M&A proxy fees reached US$11.3 billion in the first quarter, with Goldman Sachs leading. Executives from several banks have expressed optimism; JPMorgan Chase anticipates strong growth in investment banking fees and markets revenue. Bank of America expects interest income to grow at least 7% and investment banking fees to climb 10%, while Citigroup forecasts mid-teens percentage growth in its investment banking fees and markets revenue.
Looking ahead, the outlook for 2026 loan growth, especially in commercial and industrial, and commercial real estate, will be a key focus. JPMorgan Chase CEO Jamie Dimon recently cautioned that the U.S.-Israeli conflict with Iran risks oil and commodity price shocks, potentially leading to persistent inflation and higher-than-expected interest rates. Analysts suggest trading volumes may benefit from recent geopolitical risk, though other areas like mortgage and wealth management could soften until conflicts resolve. Despite current disruptions, Goldman Sachs CEO David Solomon maintains expectations for M&A activity to accelerate in 2026, highlighting a resilient deal pipeline in healthcare and industrials.
