To The Moon

Over the past couple of days, six major banks released their earnings, all showing strong results. Stock prices rose after the reports. Let’s take a look at each bank’s performance:

• $Morgan Stanley(MS)$ : Shares jumped nearly 6%, hitting an all-time high. Net revenue reached $18.22B (+18% YoY), exceeding the expected $16.64B. Q3 EPS was $2.80, with ROTCE of 18% vs. 13.4% estimated.

• $Wells Fargo(WFC)$ : Shares surged 7% after earnings. WFC raised its medium-term return on tangible common equity guidance to 17–18%. EPS of $1.66 slightly beat estimates, driven by core revenue of $21.4B.

• $Bank of America(BAC)$ : Rose over 6% in two days. Q3 performance exceeded expectations, driven by a rebound in M&A activity boosting investment banking, and net interest income surpassed analyst forecasts.

• $Citigroup(C)$ : Beat estimates and rose 3.89%, driven by strong core pre-provision earnings growth across all segments.

• $JPMorgan Chase(JPM)$ : Rose 3% during trading session, with record results in wealth and investment banking.

• $Goldman Sachs(GS)$: Remained flat. Q3 beat was due to multiple small beats across the income statement rather than one key driver.

A bar chart titled JPMorgan leads Big Banks Raking in Trading Revenue displays third-quarter trading revenue in billions of dollars for major banks. The x-axis lists banks: JPMorgan, Goldman Sachs, Morgan Stanley, Citigroup, Bank of America. The y-axis ranges from 2 to 10 billion dollars. JPMorgan has the tallest blue bar reaching about 9.5 billion, followed by Goldman Sachs at around 8.5 billion, Morgan Stanley at 7.5 billion, Citigroup at 6.5 billion, and Bank of America at 5.5 billion.

Beyond core numbers, JPM and GS earnings calls offered insights into AI initiatives and economic outlooks:

$JPMorgan Chase(JPM)$ management believes consumer spending is strong, while analysts remain cautious about credit risk.

• Net Income: $14.4B; EPS: $5.07; ROTCE: 20%

• Revenue: $47.1B (+9% YoY), driven by market, asset management, investment banking, and payment fees.

1.Business Performance

• CIB (Corporate & Investment Bank): Net income $6.9B, revenue +17%, investment banking fees +16%, IPO market recovery.

• CCB (Consumer Bank): Net income $5B, record account openings driven by revamped Sapphire credit card.

• AWM (Asset & Wealth Management): Revenue $6.1B (+12%), AUM reached $4.6T (all-time high).

2.Financial & Risk Metrics

• CET1: 14.8% (down 30bps QoQ due to higher RWA)

• Credit Costs: $3.4B, including $810M provisions and $2.6B write-offs from isolated wholesale loan fraud, but overall credit quality remains stable.

• NII: Boosted by asset growth but partially offset by lower rates.

3.Management Views on macros & AI

• Jeremy Barnum, CFO: “Consumer spending remains strong; labor market slightly cooling. The true test of AI is whether it can curb expense growth — the proof is in the pudding.”

4.Key Focus Areas

• Wholesale loan fraud led to higher write-offs

• Labor market cooling and inflation may pressure expenses

• Non-bank financial institution (NDFI) loan risk monitoring required

Goldman Sachs Q3 Highlights: Revenue Near Multi-Year High, AI Strategy “GS 3.0” Launched

• Revenue: $15.2B (+12% YoY); EPS: $12.25, ROE 14.2%, near multi-year high

• AUM: $3.5T

• Record alternative fundraising: $33B this quarter, full-year target raised to $100B

1.Core Business Recovery

• Investment banking revenue $10.1B: Advisory +60%, Equity underwriting +21%, Bond underwriting +30%

• FICC revenue +17%, supported by rates and commodities

• Wealth & asset management $4.4B, record management fees

2.AI-Driven “One Goldman Sachs 3.0” Strategy

• AI operations model launched to improve efficiency, cross-department synergy, and scale

• CEO Solomon: “AI lets us redefine processes, enabling automation and profit leaps.”

• Multi-year plan, first progress to be disclosed in Jan 2026

3.Macro & Outlook

• M&A and investment banking recovering strongly; financial sponsor activity +40% YoY

• Rate cuts expected to support capital markets

• Risk management strengthened, focus on high-quality fundraising and asset returns

4.Shareholder Returns & Capital

• $3.3B returned to shareholders (including $2B buyback)

• CET1 14.4%, expense control effective

How do you view 6 banks’ earnings beat?

Which bank are you bullish the most?