US banking giants reap bigger profits as borrowers seek more loans

By Saeed Azhar, Arasu Kannagi Basil and Nivedita Balu

NEW YORK, Jan 14 (Reuters) – U.S. banking giants boosted their profits in the fourth quarter, buoyed by increasing demand from borrowers that could bode well for lenders’ future earnings.

Bank of America’s average loans grew 8% from a year earlier, and its net interest income – or the difference between what it earns from loans and pays out in deposits – surged to a record $15.9 billion, it reported on Wednesday. At rival JPMorgan Chase, averaged loans climbed 9%. Loan growth is closely viewed by investors as a positive indicator for banks’ businesses.

“We’ve seen growth in all of the consumer borrowing categories,” Bank of America Chief Financial Officer Alastair Borthwick told reporters on a conference call. “That’s helped us in Q4, but generally, the story in 2025 was more of a commercial borrowing story, and we’ve been gratified by the fact that our clients in a growing economy have continued to invest to support their businesses.”

Analysts at S&P Global Market Intelligence “are optimistic about continued momentum into 2026, driven by macroeconomic stability and favorable lending conditions,” they wrote in a report Tuesday. They estimated loan growth across U.S. banks “accelerated significantly” by the end of 2025, growing 5.3% year-on-year.

Citigroup’s average loans climbed 7% in the fourth quarter, driven by is markets, U.S. personal banking and services businesses, it reported on Wednesday.

“We saw the pace of loan growth pick up for the first time in a while,” Wells Fargo Chief Financial Officer Mike Santomassimo told reporters on a conference call. Loans grew 12% for its commercial businesses in the fourth quarter, while revenue also increased due to auto and card lending.

CREDIT CARD CAP

Executives also expressed concern that President Donald Trump’s proposed 10% cap on credit card interest rates would prompt banks to pull back on lending and curb economic growth. Still, they said more details were needed to assess its potential impact.

Citigroup Chief Financial Officer Mark Mason said it was still too soon to weigh on the policy given the lack of details. More broadly, “an interest rate cap is not something that we would or could support,” he told reporters on a conference call.

“An interest rate cap would restrict access to credit to those who need it the most, and frankly, would have a deleterious impact on the economy … (I) don’t want to speculate on impact, given the lack of information that is out in the market, but agree that affordability is an important issue and stand ready to collaborate on how we work to address it,” Mason said.

Wells Fargo Chief Financial Officer Mike Santomassimo told reporters that the bank encourages careful consideration of all the proposals.

“It’s just too early,” he said. “There’s not enough detail to really comment about individual impacts across Wells or the industry. But as I said, it would have it would have negative impact on credit availability.”

Separately, more bankers expressed their support for the Federal Reserve’s independence after the Trump administration opened an investigation into Chair Jerome Powell.

“What is really important is the independence of the Fed and the Fed chair,” Mason said. “We’d expect that the next Fed chair operate with the same level of independence and focus on ensuring that the Fed has that independence.”

The S&P 500 banks index slid about 1% in early trading on Wednesday.

(Reporting by Saeed Azhar in New York, Arasu Kannagi Basil in Bengaluru and Nivedita Balu in Toronto, additional reporting by Prakhar Srivastava and Tatiana Bautzer, editing by Lananh Nguyen and Nick Zieminski)