Big banks are offering the latest view of how their customers are faring amid President Trump’s tariff turmoil, and it’s not all bad — at least for now.
“The message has really been that the sky is not falling,” Saul Martinez, a bank analyst for HSBC, told Yahoo Finance on Tuesday.
Five of the country’s largest banks over the past week posted first quarter rises in profits and revenue, driven in part by trading operations that benefited from the market volatility triggered by the initial rollout of Trump’s first tariffs in February and March.
Read more: The latest news and updates on Trump’s tariffs
Collectively, net profits at JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), Morgan Stanley (MS), and Goldman Sachs (GS) amounted to $35 billion, a 13% increase from the year-ago quarter. Revenue also rose at all of these banks. Trading revenue alone jumped 17% to more than $36 billion.
Many banks said their consumer customers were still spending, defaults were still manageable, and businesses were not experiencing distress despite the uncertainty about the months ahead. None of the institutions with big Wall Street footprints updated their earnings outlooks for the rest of the year, either.
What these results didn’t include, however, was the volatile period that followed Trump’s April 2 “Liberation Day” tariff announcement, which took place two days after the quarter ended. Stocks and bonds plunged and have yet to fully recover, ushering in new uncertainty about the economy and the safety of US assets.
“We’re surprised about the degree of ongoing firmwide strength at all 5 big banks … and the more than expected upbeat views,” said Wells Fargo banking analyst Mike Mayo in a Tuesday note.
“To us, it all says that events since Apr 2 can still be little more than a speed bump, so long as policy moves faster to help ease most of the uncertainty,” he added, in reference to promised deregulation of the banking industry expected from the Trump administration.
Not that banks and their top executives were entirely upbeat. Goldman Sachs CEO David Solomon said that the prospect of a recession “has increased.” JPMorgan CEO Jamie Dimon said the economy faces “considerable turbulence,” with a recession as a “likely outcome.”
In such a scenario, he added, “earnings won’t be great and the stocks will go down.”
But many bankers were noticeably more optimistic. The word “recession” did not come up once on Citigroup’s Tuesday earnings calls with analysts. Jane Fraser, CEO of Citigroup, also offered an optimistic vision of the current turmoil.
