Published on: 2026-01-12
Bank stocks are heading into earnings week with expectations already turned up. Several of the biggest names have been printing record highs or multi-year highs, which changes the game. When a stock is priced for "good," a good quarter is not always enough. Traders typically need two things: a clean beat and a confident story for the next quarter.
This quarter, the story is not only about loan growth. The market is watching whether net interest income can remain steady after rates fell in 2025, and whether investment banking and trading are strong enough to offset any slowdown in traditional lending.
We expect a profit lift across major US banks in Q4 2025, driven primarily by a rebound in investment-banking revenue as deal activity recovers, alongside solid trading performance.
| Bank | Results release | Earnings call | Day |
|---|---|---|---|
| JPMorgan (JPM) | ~7:00 a.m. ET | 8:30 a.m. ET | Tue, 13 Jan 2026 |
| Bank of America (BAC) | ~6:45 a.m. ET | 8:30 a.m. ET | Wed, 14 Jan 2026 |
| Citigroup (C) | ~8:00 a.m. ET | 11:00 a.m. ET | Wed, 14 Jan 2026 |
| Wells Fargo (WFC) | ~7:00 a.m. ET | 10:00 a.m. ET | Wed, 14 Jan 2026 |
| Goldman Sachs (GS) | ~7:30 a.m. ET | 9:30 a.m. ET | Thu, 15 Jan 2026 |
Practical trading note: When three big banks report on the same morning, the first move in financials can be headline-driven and messy, and the cleaner trend often appears after calls begin and management gives colour on guidance.
Dealmaking picked up meaningfully in 2025, and the fee pool followed. For example, reports suggested a 42% jump in global M&A volume to $5.1 trillion, linking stronger deal flow and a healthier IPO pipeline to the expected Q4 profit surge.
The Financial Times went a step further, describing 2025 as the best year for US investment banking since the pandemic, with revenues near $38 billion and also pointing to expectations of further fee growth in 2026.
Net interest income remains the biggest swing factor for the traditional lenders, but the easy gains from higher rates are now behind the sector. A 2026 industry outlook expects net interest income growth to be modest, with lower loan yields partly offset by easing deposit costs.
For this earnings week, the market is likely to reward banks that show deposit costs falling faster than loan yields.
Credit has not "broken," but investors are alert to slow leaks, especially in consumer cards and commercial real estate.
For instance, consumer delinquency has shown signs of levelling off, with household leverage and debt servicing costs still low by historical standards.
That is supportive, but it does not remove the risk of pockets of stress.
| Ticker | Expected EPS | Expected revenue | Implied YoY change (EPS / revenue) |
|---|---|---|---|
| JPM | $4.97 | $45.65B | +3.33% / +6.75% |
| BAC | $0.96 | $27.34B | +17.07% / +7.87% |
| C | $1.78 | $20.99B | +32.84% / +7.18% |
| WFC | $1.65 | $21.49B | +16.20% / +5.45% |
| GS | $11.69 | $14.53B | -2.2% / +4.7% |
JPM usually sets expectations for credit, consumer health, and the overall fee environment. It also tends to define whether "strong trading and strong fees" is broad-based or just isolated pockets.
Key Lines to Watch
Net interest income direction: Not just where it was, but whether the next quarter looks flatter or improving.
Credit costs: Any surprise in provisions can hit sentiment quickly because it feeds "late cycle" narratives.
Markets and advisory: A broad pickup supports the idea that capital markets momentum is real, not a one-quarter bounce.
What Could Change the Narrative
A conservative 2026 outlook could cool the rally even if Q4 beats, because expectations are already elevated.
BAC is often the cleanest "rates and deposits" read in this group, because its earnings can be highly sensitive to changes in yields and deposit pricing.
Key Lines to Watch
Deposit betas: Management commentary on how fast deposit costs are adjusting is critical.
Market revenue: Management indicated an anticipated increase in market revenue, and traders will assess the actual report in light of that perspective.
Consumer credit: Any worsening in card or auto can quickly shift the narrative from "soft landing" to "normalization is turning into stress."
What Could Change the Narrative
Should deposit costs not decrease as anticipated, the market might doubt the extent of NII improvement that is feasible in 2026.
Citi's story is often about execution and consistency. The market tends to reward Citi when it shows clean progress without new surprises.
Key Lines to Watch
Investment banking fee trajectory: Management has previously signaled a strong fee pickup, so traders will check whether the numbers confirm it.
Expense discipline: Restructuring stories live or die by the cost line.
Capital return tone: If confidence rises, the market tends to reward it quickly.
What Could Change the Narrative
Any indication that market revenue is diminishing as we approach 2026 could affect sentiment, since recent positivity has been linked to the recovery of capital markets.
Wells Fargo is in a unique situation as regulators removed its enduring $1.95 trillion asset limit in 2025, allowing for balance sheet expansion once more.
Key Lines to Watch
Loan growth and net interest income: The market wants proof that growth is translating into sustainable earnings power.
Fee growth: If investment banking and other fee lines accelerate, the market may re-rate the stock.
Expense control: Growth narratives face swift repercussions if expenses increase more rapidly than income.
What Could Change the Narrative
If management appears hesitant about utilizing the post-cap flexibility, investors might view the growth opportunity as "theoretical" rather than "real."
Goldman is less about net interest income and more about capital markets activity. It is also facing tougher year-on-year comparisons, which is why some forecasts show a small EPS decline.
Key Lines to Watch
Advisory and underwriting fees: The market wants confirmation that the pipeline is translating into booked revenue.
Trading: Strong quarters can mask weaker fee lines, but only temporarily.
Outlook language: Traders listen for confidence about the next quarter's activity, not just the one that ended.
What Could Change the Narrative
If management hints that the deal surge is peaking, the stock can react even if Q4 numbers look fine, because the market is already pricing the next phase.
When a sector rallies hard into earnings, a normal beat can be met with profit-taking. For example, the record-high bank share prices going into earnings make the hurdle rate higher.
Consumer stress can rise in specific buckets even when the overall picture looks stable.
For instance, consumer delinquency can level off, but some measures remain elevated, which keeps investors alert.
The resurgence of deals has turned into a cornerstone of the bullish argument. If bank executives sound less confident on pipeline conversion, markets may quickly reprice 2026 fee expectations.
Even a small shortfall in NII guidance can matter because investors are trying to judge how banks will perform in a year of easing rates and shifting deposit competition.
JPMorgan reports on Tuesday, 13th January. Bank of America, Citigroup, and Wells Fargo report on Wednesday, 14th January. Goldman Sachs reports on Thursday, 15th January.
Net interest income matters most for the traditional lenders because it drives the bulk of earnings power. Investors will focus on the direction of 2026 guidance more than a small Q4 beat.
Because the stock is often priced for a beat.
If guidance is cautious, expenses rise, or credit provisioning jumps, the market can treat the quarter as "peak conditions" and sell it. That is especially common when the stock is near a record high.
In conclusion, this week is a concentrated test of the "banks are back" narrative. The calendar is front-loaded, with JPMorgan on Tuesday, three major lenders on Wednesday, and Goldman on Thursday, so sector moves can develop quickly and then reverse just as quickly.
The core bullish case is that investment banking and trading are improving simultaneously with net interest income stabilising, which supports higher profits into 2026.
With several stocks near record levels, the reaction function is simple: good numbers keep the trend alive, but strong guidance is what extends it.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
