The Financials Statement: 2Q26 Bank Earnings - Week III

First-page research excerpt

J P M O R G A N

Europe Credit Research

31 July 2026

The Financials Statement

2Q26 Bank Earnings - Week III

Markets

Secondary spreads were softer over the past week, with €AT1 in particular giving

up ~11bps at the bottom of the stack, while Tier 2 shed +2bps, and both senior

tranches closed either side of unchanged over the Wed-Wed period. Insurance saw

very similar moves, with RT1 +10bps wider, Tier 2 +4bps wider, and Senior +1bp

wider over the week.

Despite a very large number of banks printing 2Q results, primary activity

remained negligible, in part truncated - we suggest - by the equally busy central

bank calendar. We note that, as indicated by quite a number of banks this week,

funding plans are already either nearing completion or fully complete for 2026, but

by the same token found a willingness from Issuers to consider opportunistic

prefinancing of 2027 plans.

In this edition...

2Q26 Bank Earnings – Week III: the week saw the pace of 2Q reporting

rapidly gather pace, with generally firm numbers across the board.Strong

equity-led Markets performance has proven a consistent theme across the

IBs so far, somewhat unsurprisingly following the US banks’ performance the

week prior, but was also supported by encouragingly firm Banking results,

albeit largely also linked to robust Capital Markets activity. Asset quality on

the whole has also been sound, seeing no recurrence of the one-off charges

incurred by a number of institutions over the past few quarters, while showing

signs of fairly benign consumer behaviour in typical focus markets. As we’d

suggested, several banks saw the usual impact of their half-yearly modelled

provisioning updates absorbed by removal of overlays that were put in place

or topped up last quarter on geopolitical concerns, helping further stabilise the

CoR line item. Shareholder distributions continued to constrain the extent of

CET1 build in the period, while SRTs remain firmly in focus as a capital

management tool.