The Real Bank Earnings Story Was the AI Spending Boom

The second quarter produced another round of strong earnings from the nation’s largest banks, and executives spent as much time discussing artificial intelligence, digital delivery and technology investment as they did revenue, expenses and capital ratios.

JPMorganChase, Bank of America, Citigroup, Goldman Sachs and Wells Fargo each exceeded analysts’ expectations, although they arrived there through different combinations of consumer banking, markets, wealth management, commercial lending and investment banking arms.

Earnings call commentary, however, converged on several themes, including that consumers continue to spend; credit quality remains sound; capital markets have regained momentum; and technology spending is becoming a permanent feature of operating budgets.

AI arguably occupied a larger share of earnings discussions than in previous quarters, but management teams generally avoided portraying it as a quick route to lower costs.

JPMorganChase Chairman and CEO Jamie Dimon said the bank now has roughly 1,000 AI use cases under development across the company, but he cautioned investors against assuming that the economic benefits will remain inside financial institutions.

“AI will have its give-and-takes,” Dimon said during a Tuesday (July 14) conference call. “The ultimate beneficiary of AI will be our customers,” reflecting his view that competing firms will adopt many of the same capabilities over time.

Bank of America described AI in similarly operational terms. Chief Financial Officer Alastair Borthwick said Tuesday the bank’s work centers on “growth, efficiency, risk management and resiliency,” adding that approximately 300 AI use cases have been approved and more than 100 have already been deployed throughout the organization.

Applications range from software development to tools used by relationship managers and financial advisers, illustrating how AI is being woven into day-to-day operations rather than isolated inside innovation teams.

Goldman Sachs connected AI to client demand for financing. Chairman and CEO David Solomon said Tuesday the rapid expansion of AI infrastructure is producing financing needs that extend beyond Silicon Valley.

“We are in the relative early innings of a very, very significant AI buildout cycle,” Solomon said. “We see lots of opportunities to deploy capital to our clients to finance this infrastructure buildout.”

Investment in data centers, energy production and related infrastructure are drivers of advisory, financing and capital markets activity, Solomon said.

Citigroup also made clear that technology spending will continue even as investors scrutinize expense growth. CEO Jane Fraser said Tuesday the bank is prepared to step up investment during the second half of the year if business conditions remain favorable, with AI sitting alongside technology platforms and marketing as priorities.

“We’re making investments across the flywheel,” Fraser said. “It’s also importantly in AI to drive scale economics as well. All of this will translate into measurable growth.”

When asked by analysts whether those investments were primarily defensive or intended to capture new business, her answer was concise: “Both.”

The emphasis on technology was matched by equally consistent commentary about digital banking. Rather than treating mobile banking and digital engagement as customer conveniences, executives described them as operating platforms that lower servicing costs, while deepening customer relationships and creating opportunities to sell additional products.

Bank of America illustrated the shift with continued expansion across its digital franchise. The bank reported approximately 50 million active digital banking users, about 24 million active Erica users and roughly 70% of consumer sales completed through digital channels. Management also highlighted AI tools used internally by employees, reinforcing the view that digital transformation now extends beyond customer-facing applications.

Credit Holds Steady

Management teams pointed to a consumer backdrop that remained stable despite elevated interest rates.

Bank of America CEO Brian Moynihan said the firm remains comfortable with current credit conditions, citing continued labor-market strength as an important factor supporting household finances. The bank’s results reflected that assessment. Provision for credit losses declined from a year earlier, while average deposits rose to $2.02 trillion and average loans and leases increased to $1.22 trillion. Every major business segment contributed to year-over-year earnings growth.

Citigroup echoed that assessment. Chief Financial Officer Gonzalo Luchetti said the bank continues to see “a stable credit environment,” adding that “the U.S. consumer has been resilient.” Both delinquencies and net credit losses improved from a year earlier, while purchase activity remained healthy, providing another indication that household finances have held together despite borrowing costs that remain above pre-pandemic levels.

JPMorganChase delivered a similar message. Consumer and community banking revenue climbed 8% from a year earlier, while deposits and loans continued to expand. Credit costs remained manageable, with the bank recording $2.5 billion of credit costs, including net charge-offs and a modest reserve build, a level that management did not characterize as evidence of broad consumer stress.

The same pattern extended to payments and business banking, where executives described transaction activity as remaining healthy while corporate clients kept capital markets buoyant.

Citigroup’s Treasury and Trade Solutions business posted its strongest quarter on record, reinforcing the importance of payments and treasury management as durable sources of fee income. The bank also reported 12% growth in general-purpose credit card purchase volume, 34% growth in banking revenue and 17% growth in markets revenue, reflecting stronger corporate activity alongside steady consumer spending.

Goldman Sachs’ Solomon said corporate clients are pursuing acquisitions, financing transactions and strategic investments at a faster pace than earlier in the year, with AI reshaping capital requirements across multiple industries.

“Momentum across our franchise has accelerated as clients continue to pursue greater scale to invest and compete more effectively,” Solomon said.

The earnings reports suggest that the largest U.S. banks have entered the second half of 2026 with two tailwinds. Stable credit performance has allowed management teams to continue investing aggressively, while stronger client activity has provided the revenue needed to support those investments.

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