US banks are expected to report double-digit growth in second-quarter core earnings, buoyed by factors including net interest revenue and core noninterest income, RBC Capital Markets said in a Wednesday note.
RBC is projecting a 19% annual jump in banks' median core earnings per share from a year earlier. Consensus estimates point to a 21% increase, according to the brokerage.
"Year-over-year, the increase should be driven by higher net interest revenue and core noninterest income, lower loan loss provisions and positive operating leverage," RBC co-Head of Global Financials Research Gerard Cassidy wrote.
Net interest income is seen rising nearly 9.6%, with noninterest income estimates pointing to an 8.7% year-over-year advance. The brokerage assumes 9.5% loan growth, driven by commercial and industrial, as well as consumer loans.
Provision for credit losses is expected to fall 2.2% annually.
"Credit losses should remain manageable in the (second quarter) and we expect that trend to continue into (year-end) 2026," Cassidy said.
JPMorgan Chase (JPM), Bank of America (BAC), Goldman Sachs (GS), Citigroup (C) and Morgan Stanley (MS) are projected to report a 15% jump in market revenue and a 25% surge in investment banking.
RBC's 12-month outlook on banks continues to be positive amid expectations for stronger loan and NII growth.
Bank earnings, including results from Wells Fargo (WFC), are due out mid-July.
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