By August, several global systemically important banks in the US, Europe, and Japan had released their interim reports. From the data, the first half of 2026 showed a mixed picture for the global banking industry, driven by macroeconomic conditions and geopolitical factors.
In the first half, Wall Street giants like Goldman Sachs and Morgan Stanley saw net profit growth exceeding 40%, highlighting the explosive power of investment banking and capital-light models. Japan's three major banks benefited from a 30-year-high interest rate normalization, with net profit growing between 33% and 48%. Meanwhile, some European banks and traditional commercial lenders faced growth bottlenecks.
Beneath this "ice and fire" surface, the value anchor of the global banking industry is shifting. Amid the noise of macroeconomic cycles, the key question is identifying which growth drivers are sustainable and which are fleeting.
US Market Divergence: A Big Year for Investment Banking
Global systemically important banks (G-SIBs) are designated by the Financial Stability Board (FSB) based on size, interconnectedness, and cross-border activity. The latest list includes 29 institutions. Excluding five Chinese banks, the remaining 24 include eight headquartered in the US, 13 in Europe, and three in Japan. All but the unlisted French BPCE have disclosed their first-half 2026 financial data.
The eight US G-SIBs can be categorized into four types: investment bank-led, like Goldman Sachs and Morgan Stanley; universal banks, like JPMorgan Chase, Bank of America, and Citigroup; traditional commercial banks, like Wells Fargo; and asset-light models, like Bank of New York Mellon and State Street. In the first half, against the backdrop of a Federal Reserve rate inflection point, these four types showed significant performance differences.
Investment bank-led institutions, led by Goldman Sachs and Morgan Stanley, were the clear winners. Goldman Sachs reported first-half revenue of $37.148 billion, up 28.2% year-on-year, and net profit of $12.258 billion, a surge of 44.9%. Morgan Stanley saw revenue of $41.732 billion, up 22.0%, and net profit of $11.148 billion, a 41.9% increase. The core engine of this performance surge was the global AI capital expenditure boom and the release of M&A and financing demand from cross-border industry chain restructuring. In the second quarter alone, investment banking revenue for Goldman Sachs and Morgan Stanley reached $3.4 billion and $2.4 billion, respectively, with year-on-year growth exceeding 50%.
Notably, in April 2026, SpaceX filed for an IPO and was listed on Nasdaq on June 12. With a fundraising size of approximately $75 billion and a valuation of about $1.77 trillion, it became the largest IPO in global history. Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, and JPMorgan Chase served as joint lead underwriters.
Universal banks continued to solidify their scale barriers. JPMorgan Chase's total assets exceeded the $5 trillion mark, equivalent to the combined assets of Citigroup and Wells Fargo. First-half revenue reached $102.161 billion, with net profit of about $37.6 billion, both growing over 20% year-on-year. Bank of America showed diversified growth drivers, with net interest income up 9% year-on-year, investment banking fees surging 50%, and a standout wealth management segment. By the end of June, its assets under management (AUM) reached a record $2.3 trillion. Citigroup also saw a broad recovery, with banking revenue growing 34%.
Traditional commercial banks saw more moderate growth. Wells Fargo reported first-half revenue of $42.019 billion, up 7.65% year-on-year, and net profit of $11.66 billion, up 12.2%. While steady, this growth was overshadowed by the 20% to 40% gains seen by peers.
Bank of New York Mellon and State Street, specializing in asset custody, have business models distinct from the others. Their revenue primarily comes from service fees for asset custody, fund administration, and securities lending, making them less sensitive to interest rate cycles. In the first half, their net profit grew 28.3% and 38.2% year-on-year, respectively, with custody and AUM also seeing double-digit growth.
Europe's Defensive Strategy and Japan's Comeback
Across the Atlantic and in Asia, European and Japanese banks show contrasting growth drivers. Europe focuses on efficiency through "subtraction" in fragmented markets, while Japan benefits from wider interest rate spreads due to monetary policy normalization.
Performance among the 13 European G-SIBs varies widely. Headline institutions like HSBC, Santander, Barclays, and Standard Chartered generally recorded positive growth, while ING saw net profit fall 20.98% year-on-year, and UniCredit slipped 2.71%.
Compared to US banks' business breakthroughs, European institutions have been active in geographic restructuring. HSBC led European peers with net profit of $15.259 billion, up 26.55% year-on-year, despite a 7.34% decline in first-half revenue to $35.822 billion. This "profit growth without revenue growth" reflects cost-cutting, provision releases, and the execution of its "Asia Focus" strategy. HSBC is concentrating resources on high-growth Asian markets by privatizing Hang Seng Bank and selling non-core businesses like UK life insurance and German custody.
Standard Chartered has seized the opportunity from RMB internationalization, becoming one of the first foreign banks to access digital RMB cross-border services, covering Hong Kong, Singapore, Thailand, UAE, Qatar, and Brazil. In the first half, Standard Chartered achieved record operating income of $11.604 billion, up 6% year-on-year, with net profit of $3.653 billion, up 10%.
UniCredit, headquartered in Milan, is one of Europe's largest banking groups. In the first half, it sold some regional businesses to reduce geopolitical uncertainty while accelerating its acquisition of Commerzbank, aiming to extend into the largest European economy. By the end of July 2026, its stake in Commerzbank had risen to 48%.
Excluding China's "Big Five," the main players in the Asian market are Japan's three major banks. Their fiscal year starts in April, with the first half from April to June. With the Bank of Japan raising the policy rate to 1.0%, the highest in 31 years, Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho experienced a historic turning point. Mitsubishi UFJ reported quarterly net profit of 809.4 billion yen, up 48% year-on-year; Mizuho reported 422.9 billion yen, up 46%; and Sumitomo Mitsui reported 501.4 billion yen, up 33%. The widening of domestic loan spreads was the key driver, with Mitsubishi UFJ's net interest income up 28% to 882.4 billion yen.
Wealth Management: The Most Stable Profit Source
"Institutions with strong wealth management capabilities are relatively resilient," said a veteran foreign bank professional. In the current market landscape, each foreign institution has its own focus. Bank of America stands out in wealth management. Its Global Wealth and Investment Management division saw second-quarter revenue up 16% year-on-year to a record $6.9 billion, with net income up 42% to $1.4 billion. Total client balances reached $4.9 trillion, and AUM grew 17% year-on-year to $2.3 trillion.
In Europe and Asia, wealth management's strategic importance is also prominent. HSBC's wealth management AUM reached $1.57 trillion in the first half, with nearly 70% contributed by Asia. In the first quarter alone, $34 billion of net new investment assets came from Asia. Citigroup's wealth management business is also recovering after a strategic overhaul, with client investment assets at the end of the second quarter reaching $727 billion, up 14% year-on-year, and wealth management revenue up 13% to $3.2 billion.
Asia is becoming a key growth market for wealth management. Standard Chartered opened three Priority Private Banking centers in Taiwan in just 18 months and plans to hire 50 more relationship managers in Singapore. JPMorgan Chase has doubled its private banker headcount in Singapore to over 50, with most hires targeting the Indonesian market. UBS plans to hire about 50 wealth management bankers in Hong Kong.
AI Investment Enters the 'Output Phase'
AI and digital transformation are another clear trend. In the first half of 2026, several major international banks formally added a "Chief Artificial Intelligence Officer" to their core management teams. In March, HSBC appointed David Rice as its first Chief AI Officer. HSBC CEO Georges Elhedery stated the goal is to raise return on tangible equity (RoTE) above 17% between 2026 and 2028, primarily through process automation and back-office streamlining. UBS announced in October 2025 the appointment of Daniele Magazzeni as its first Chief AI Officer, effective January 2026. UBS management has stated that "AI is a top priority for UBS."
Resource allocation is also heavily concentrated on AI. Bank of America's 2026 technology budget is about $13 billion to $13.5 billion, with about 30% dedicated to new initiatives including AI. The explosive growth of Bank of America's wealth management business in the first half was partly driven by its leading digital strategy. Its virtual assistant, Erica, serves 24 million customers, with digital sales accounting for 70% of total sales, boosting client asset retention efficiency. JPMorgan Chase is focusing on cutting-edge AI infrastructure, planning to deploy "more powerful AI agents" covering retail, corporate, and trading scenarios later in 2026. Citigroup has used AI to reduce document review time for account opening from one hour to 15 minutes, a 75% efficiency gain, and plans to reduce outsourcing from 50% to 20% to strengthen in-house capabilities. Mitsubishi UFJ is collaborating with OpenAI on an "AI-native" transformation, while Sumitomo Mitsui is driving personal deposit growth through its Olive digital account system.
As technology investment directly boosts private banking sales and drives record growth in wealth management, AI is becoming a tangible productivity tool that reshapes cost and revenue curves. It will be a key factor influencing global banking competitiveness in the next cycle and deserves continued attention.
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