U.S. Large Cap Banks & Consumer Finance "2Q26 Preview: How to invest in..."

Research evidence excerpt

U.S. Large Cap Banks & Consumer Finance "2Q26 Preview: How to invest in..."

Global Research

7 July 2026ab

U.S. Large Cap Banks & Consumer Finance Equities

Americas2Q26 Preview: How to invest in "peak banks"

from here? Financial

Erika Najarian

Analyst

erika.najarian@ubs.com

With banks firing on most cylinders, where do we go from here? +1-212-713 2491

Direct loan growth accelerating. A capital markets renaissance. A deposit backdrop that, Zachary Westerlind

in recent updates, is competitive but not so tough as to pull down estimates. Continued Associate Analyst

deregulatory momentum. A resilient US economy. It's been awhile since it's felt like zachary.westerlind@ubs.com

"peak bank," but the bank investor community is naturally skeptical. With GSIBs at 13x +1-212-713 2404

'27 and regionals at 11x, the bar is high for fresh money. The BKX has outperformed the Chintan Prakash

broad market in 2Q, and GSIBs, regionals, and consumer finance stock averages have Associate Analyst

outperformed the S&P since conf season began. We expect any "beats" to come mostly chintan.prakash@ubs.com

from cap markets and trading, and any "misses" to come from deposit cost surprises +1-212-713 3061

and higher costs related to higher transactional fees from a strong equities market, Charles Brennan

especially in Asia. Despite adding one rate hike in Dec '26, our full-year estimates are Associate Analyst

largely unchanged, with new PTs across our coverage. charles.brennan@ubs.com

+1-212-713 2227

What to do with the GSIBs from here?

It's hard to get in the way of the capital markets momentum, but the quarter is tricky for

stock picking. While JPM seems poised to beat expectations -- after having given the

"bad news" on expenses but not the full "good news" on revenues, the call may be