U.S. Banks Surge Amid Loan Growth and Interest Rate Debates

U.S. banking giants reported robust profits in Q4 due to increased borrowing demand, with Bank of America and JPMorgan Chase noting significant loan growth. However, proposed credit card interest caps and concerns over Federal Reserve independence cast a shadow, as analysts remain optimistic about lending momentum in 2026.

Major U.S. banks like Bank of America and JPMorgan Chase have reported strong profits in the fourth quarter, spurred by rising borrower demand. Bank of America saw an 8% growth in average loans and a surge in net interest income, while JPMorgan Chase reported a 9% increase in averaged loans.

Optimism about loan growth extending into 2026 was expressed by S&P analysts, who projected significant year-on-year growth by the end of 2025. Citigroup and Wells Fargo also reported rises in loans, with Wells Fargo noting a 12% growth in commercial business lending.

The banking sector faces potential challenges from a proposed 10% credit card interest rate cap by President Trump, raising concerns over credit availability and economic impacts. Meanwhile, bankers stressed the importance of Federal Reserve independence amidst an ongoing investigation into Chair Jerome Powell.

(With inputs from agencies.)