While mindful of potential cracks in credit quality and geopolitical risks, CEOs of the biggest U.S. banks say they are upbeat on the American economy and, noting its global influence, are optimistic about operating conditions broadly in 2018.
"Look at the financial results alone: They're extraordinary and consistent," JPMorgan Chase & Co. Chairman and CEO Jamie Dimon said last week at a conference, where he also proclaimed that the banking industry was in a "golden age."
JPMorgan posted a record profit for the first quarter and the U.S. banking industry, overall, did as well. Banks' collective quarterly net income of $56 billion was up 27.5% from a year earlier, according to the Federal Deposit Insurance Corp.
Dimon and other big-bank executives, speaking at a Sanford C. Bernstein conference, pointed to U.S. economic momentum. The U.S. Labor Department said last week that wages climbed as employers added 223,000 jobs in May. The unemployment rate, at 3.8%, was lower than at any point since 2000.
![]() | |
| BofA CEO Brian Moynihan |
Against that backdrop, Bank of America Corp. Chairman, President and CEO Brian Moynihan said consumers are buoyant, and that is vital for the consumer-driven U.S. economy.
"So you're seeing an acceleration in consumer spending, which is matching to that low unemployment level, more wages and stuff, and that's all good," Moynihan said. "If the U.S. consumer's spending money and in good shape and unemployment is where it is, that's going to take care of the U.S. And if the U.S. is taken care of, that's going to help the world a lot."
Executives at the conference noted global risks, from possible trade wars to political tumult in Italy to nuclear-arms ambitions in North Korea. But the global economy, on the whole, is growing this year. Strength in the U.S., given that it is the world's largest economy and it exerts outsized influence, bolsters continued global momentum.
"I think in terms of North Korea, I think in terms of Italy, those things are going to be there and that, that volatility is likely to exist, but we're going to find our way through it," Citigroup Inc. CEO Michael Corbat said. The global economy "is in pretty good shape."
Vining Sparks bank analyst Marty Mosby said in an interview that he has heard similarly upbeat commentary from large banks across the country. "There is a general positive feeling about the underlying strength of the U.S. right now," he said in an interview.
While geopolitical risks "are definitely a concern for the megabanks," Joe Gladue, bank research director at Merion Capital Group, said domestic conditions for safe and profitable lending remain intact.
![]() | |
| Citi CEO Michael Corbat |
Gladue said in an interview that rising rates should support solid net interest margins, and he said asset quality across the U.S. banking landscape is strong. "There have been a few hints of credit issues — some early issues in auto and credit cards — but there have no concrete trends, no definite causes for worry."
Factor in tax cuts that kicked in this year — the top corporate tax rate was lowered to 21% from 35% — and a push to ease regulatory burdens on banks and corporate America widely, and banks have more tailwinds for the remainder of 2018, Galdue said.
Moynihan said BofA has begun to see its business clients show more optimism in their growth prospects, thanks to the lower taxes and tapering regulation, and they are beginning to borrow more to invest in growth as a result.
"You're starting to see the draw on lines of credit go up a little bit. You're starting to see what appears to be people investing in the business," Moynihan said. "I think it ought to be a constructive time — not crazy, but mid-single digit loan growth. That environment ought to be there."
Big banks also are investing steadily in new technology, recognizing opportunities to speed up services and credit decisions via online tools to boost customer satisfaction. Long term, bankers say delivering financial services online should not only prove more efficient but less costly.
Customers increasingly expect banks to be at the forefront of technology, Wells Fargo & Co. President and CEO Timothy Sloan said. "I think it means that the pace of technological change in the industry will continue to increase," he said. "It's faster today than it was five years ago and it'll be faster five years from now."


