Banks and Capital Markets

Banks and Capital Markets Strategy

Not investment advice. This page is for informational and educational purposes only. Sterling is not a registered investment advisor. Nothing here is a recommendation to buy, sell, or hold any security. Markets carry risk and you may lose money. Do your own research and consult a licensed professional before making any investment, securities purchase, or trading decision.

Thesis

Why this sector matters to investors right now. Structural, not market timing.

US banks, wealth platforms, market-data firms, and payment networks in 2025 were four businesses that share a ticker tape and not a P&L. Balance-sheet banks earned on spread plus fees. JPMorgan reported $182.4 billion of net revenue and $57.0 billion of net income. Bank of America reported $113.1 billion of revenue and $30.5 billion of net income. Wells Fargo reported $83.7 billion of revenue and $21.3 billion of net income. Citigroup reported $85.2 billion of revenue and $14.3 billion of net income. The FDIC industry net interest margin in the fourth quarter of 2025 was 3.39 percent, the highest since the first quarter of 2019, on $25.3 trillion of industry assets. Wealth and asset managers earned on client assets. BlackRock ended 2025 at $14.04 trillion of AUM after $698 billion of net inflows. Schwab ended at $11.90 trillion of client assets after $519 billion of core net new assets. Blackstone ended at $1.27 trillion of AUM. Payment networks earned on volume, not loans. Visa fiscal 2025 net revenue was $40.0 billion on $14.2 trillion of payments volume. Mastercard 2025 net revenue was $32.8 billion, with worldwide GDV of $10.6 trillion on a local-currency basis.

The live questions sit in the mix, not in a ranked list of tickers. Who still earns on net interest income as funding costs and asset yields move. Who gathers and keeps client assets as public markets and alternatives compound. Who owns the ratings, index, and exchange rails that price risk. Who takes a cut of spend without holding the loan. Insurance stays on Insurance. Crypto-native names stay on Crypto.

Structural drivers

Forces that shape long-run demand and economics. Each driver is sourced.
  • •Industry net interest margin is the sector-wide spread print. FDIC-insured banks posted a 3.39 percent NIM in the fourth quarter of 2025, up 5 basis points from the prior quarter and the highest since the first quarter of 2019, on $25.3 trillion of assets. Full-year industry net income was $295.6 billion. Source: FDIC Quarterly Banking Profile, fourth quarter 2025.
  • •Money-center NII is still the largest P&L line. JPMorgan reported 2025 net interest income of $95.4 billion. Bank of America reported $60.1 billion. Citigroup reported $59.8 billion. Wells Fargo reported $47.5 billion. Source: company 2025 earnings releases.
  • •Scale in public-market AUM is a different engine. BlackRock ended 2025 at $14.04 trillion of AUM after a record $698 billion of net inflows, with full-year revenue of $24.2 billion. Source: BlackRock 4Q25 earnings release.
  • •Custody and advice compound on client assets, not on the bank book. Schwab ended 2025 at $11.90 trillion of client assets, up 18 percent, after $519 billion of core net new assets (5.1 percent organic). Full-year net revenues were $23.9 billion. Morgan Stanley Wealth Management reported $31.8 billion of net revenues and $7.4 trillion of wealth client assets inside $9.3 trillion of firm client assets. Source: Schwab 4Q25 earnings; Morgan Stanley 4Q25 earnings and 2025 annual report.
  • •Alternatives are a separate fee engine. Blackstone ended 2025 at $1.27 trillion of AUM (up 13 percent), $921.7 billion of fee-earning AUM, and $523.6 billion of perpetual capital AUM, with $239.4 billion of inflows. GAAP revenue was $14.45 billion. Source: Blackstone 4Q25 earnings release.
  • •Payment networks compound on spend. Visa fiscal 2025 (ended September 30, 2025) net revenue was $40.0 billion, up 11 percent, on $14.2 trillion of payments volume and 257.5 billion processed transactions. Mastercard 2025 net revenue was $32.8 billion, up 16 percent, with worldwide GDV up 9 percent on a local-currency basis to $10.6 trillion. Source: Visa FY2025 results and annual report; Mastercard 2025 earnings release.
  • •Ratings and indices ride issuance and AUM. S&P Global 2025 revenue was $15.34 billion (Ratings $4.72 billion, Indices $1.85 billion). Moody's 2025 revenue was $7.72 billion (MIS $4.12 billion, MA $3.60 billion). MSCI 2025 operating revenue was $3.13 billion, with $2.34 trillion of AUM in ETFs linked to MSCI equity indexes. Source: company 2025 earnings releases.
  • •Capital buffers are still wide of the minimums. JPMorgan standardized CET1 was 14.5 percent at year-end 2025. Bank of America 11.4 percent. Citigroup 13.2 percent. Wells Fargo 10.61 percent. U.S. Bancorp 10.8 percent. PNC 10.6 percent. Source: company 2025 earnings releases.

Structural risks

Forces that could compress demand, change economics, or break the thesis.
  • •The NIM print can reverse. The FDIC attributed the fourth-quarter 2025 NIM increase to funding costs falling 15 basis points while earning-asset yields fell 11 basis points. A deposit-beta surprise or a faster drop in asset yields than in funding costs compresses the industry spread. Source: FDIC Quarterly Banking Profile, fourth quarter 2025.
  • •Credit costs are already rising at the largest banks. JPMorgan's 2025 provision for credit losses was $14.2 billion, up from $10.7 billion. Citigroup's provision was $10.3 billion. The FDIC said commercial real estate and some consumer portfolios still have elevated delinquency rates even as industry asset quality is generally favorable. Source: JPMorgan and Citigroup 4Q25 earnings; FDIC Q4 2025 QBP.
  • •US capital rules are being rewritten, not settled. On March 19, 2026 the Federal Reserve, FDIC, and OCC requested comment on three proposals to modernize the capital framework and implement the remaining Basel III pieces, with comments due June 18, 2026. The agencies said the 2023 Basel III endgame proposal is being replaced. The final calibration is unknown. Source: Federal Reserve press release, March 19, 2026.
  • •Traditional active AUM can shrink even when markets rise. T. Rowe Price ended 2025 at $1.78 trillion of AUM, up 10.5 percent, but posted $56.9 billion of net outflows. Revenue was $7.31 billion, up 3.1 percent. Markets can mask share loss. Source: T. Rowe Price 4Q25 earnings.
  • •Processor growth is not network growth. Fiserv 2025 GAAP revenue was $21.19 billion, up 4 percent. The 2026 organic-revenue guide was 1 to 3 percent. That is a different compounding rate than Visa's 11 percent or Mastercard's 16 percent. Source: Fiserv FY2025 results.
  • •Closed-loop and card-platform loans can reprice in a sale. Goldman Sachs 2025 net revenues were $58.28 billion, but Platform Solutions included a $2.26 billion reduction tied to the Apple Card portfolio transfer, more than offset by a $2.48 billion reserve release. JPMorgan recorded a $2.2 billion credit reserve for the forward purchase of that portfolio in the fourth quarter. Source: Goldman Sachs and JPMorgan 4Q25 earnings.
  • •A single money-center name is large enough to move the page. JPMorgan's $182.4 billion of 2025 net revenue is larger than Bank of America plus Wells Fargo on this roster. A firm-specific credit, legal, or capital event is a sector event. Source: company 2025 earnings releases.
  • •PayPal is a volume franchise with a slower top line. 2025 net revenues were $33.17 billion, up 4 percent, on $1.79 trillion of TPV, up 7 percent. Volume without take-rate is not the Visa or Mastercard print. Source: PayPal 4Q25 earnings.

Competitive landscape

How to think about the players. Framing along axes (pure play vs diversified, incumbent vs challenger, etc). Not stock picking.

Think in four tabs, not a ranked list.

1. Banks (balance-sheet spread). Money-center names (JPMorgan, Bank of America, Citigroup, Wells Fargo) own scale, deposits, and markets. Super-regionals (U.S. Bancorp, PNC, Truist, Citizens, Fifth Third, Huntington, KeyCorp, M&T, Regions) own regional deposit franchises and a thinner capital buffer. Consumer finance (American Express, Capital One, Synchrony) owns revolving credit and closed-loop spend. Goldman Sachs and Morgan Stanley sit here as diversified banks and on the Wealth tab for the asset-gathering line.

2. Wealth (client assets and AUM). Traditional managers (BlackRock, T. Rowe Price) earn on public-market AUM. Alternatives (Blackstone) earn on fee-earning and perpetual capital. Platforms (Schwab, Raymond James, Morgan Stanley Wealth, Interactive Brokers) earn on custody, advice, and net interest on client cash. Custody banks (Northern Trust, BNY Mellon, State Street) earn on assets under custody, not on the same AUM definition.

3. Market data (ratings, indices, exchanges). S&P Global and Moody's own issuance-driven ratings plus subscription analytics. MSCI and FactSet own index and workflow subscriptions. ICE, Nasdaq, CME, and Cboe own matching engines, data, and listings. Ratings dollars move with debt issuance. Exchange dollars move with volatility and ADV.

4. Payments (rails). Visa and Mastercard own the network cut on spend. PayPal and Block own consumer wallets. Fiserv, FIS, Global Payments, Corpay, Jack Henry, and Broadridge own processor and infrastructure fees. Networks compound on volume. Processors compound on contracts.

Key metrics to watch

The operational and financial metrics that matter most in this sector. Each one names its source and update cadence.
MetricSourceFrequencyWhy it matters
FDIC industry net interest margin and total assetsFDIC Quarterly Banking ProfileQuarterly (about 55 days after quarter-end)The 3.39 percent 4Q25 NIM is the industry spread. If it falls back through the 3.25 percent pre-pandemic average, bank earnings estimates move together.
Standardized CET1 ratioCompany 10-Q / earnings supplements (JPM, BAC, C, WFC, USB, PNC)QuarterlyTests the buffer above the regulatory minimum plus stress-capital buffer. Wells Fargo 10.61 percent and PNC 10.6 percent are the tightest prints on this page.
Net interest income, reported and excluding MarketsJPMorgan and Citigroup earnings supplements; BAC, WFC, USB, PNC income statementsQuarterlyMarkets NII is not the deposit franchise. JPM reported $95.4 billion of NII and $92.6 billion excluding Markets in 2025.
AUM and client assets, with net flowsBlackRock, Blackstone, T. Rowe Price, Schwab, and Morgan Stanley earnings releasesQuarterlyAUM can rise on markets while share is lost. T. Rowe Price AUM rose to $1.78 trillion with $56.9 billion of net outflows. Schwab core NNA of $519 billion is the organic tell.
Payments volume, GDV, and TPVVisa 10-K / earnings (fiscal year ends September 30); Mastercard earnings; PayPal earningsQuarterlyVolume is the unit the networks sell. Visa payments volume $14.2 trillion, Mastercard GDV $10.6 trillion, PayPal TPV $1.79 trillion are not the same statistic.
Ratings revenue versus subscription / analytics revenueS&P Global and Moody's segment tablesQuarterlyRatings (SPGI $4.72 billion, MCO MIS $4.12 billion) move with issuance. Market Intelligence and Moody's Analytics are the recurring overlay.
Exchange ADV and market-data revenueCME, ICE, and Nasdaq earnings and volume releasesMonthly ADV, quarterly revenueCME 2025 ADV was 28.1 million contracts and market-data revenue was $803 million. Volume is the transaction line. Data is the recurring line.

Catalysts and milestones

Known upcoming events that could move the sector. Dated where possible.
  • •June 18, 2026 comment deadline on the Federal Reserve, FDIC, and OCC March 19, 2026 capital NPRs. The final rule, not the proposal, is what changes required CET1. Source: Federal Reserve press release, March 19, 2026.
  • •S&P Global Mobility spin, guided for mid-2026. 2026 adjusted guidance still includes Mobility until the spin completes. Source: S&P Global 4Q25 earnings release.
  • •Apple Card portfolio transfer from Goldman Sachs to JPMorgan. Goldman recorded a $2.26 billion 2025 revenue reduction and a $2.48 billion reserve release. JPMorgan booked a $2.2 billion fourth-quarter reserve for the forward purchase. Close timing and residual credit are the 2026 items. Source: Goldman Sachs and JPMorgan 4Q25 earnings.
  • •FOMC Summary of Economic Projections updates through 2026. The FDIC NIM print moved because funding costs fell faster than asset yields. The next rate path is the next NIM path. Source: FDIC Q4 2025 QBP; Federal Reserve FOMC materials.
  • •2026 bank earnings seasons for NII excluding Markets, deposit mix, and net charge-offs. JPMorgan's 2025 provision already rose to $14.2 billion. Source: JPMorgan 4Q25 earnings.
  • •Visa fiscal 2026 (year ending September 30, 2026) payments-volume and cross-border prints versus the fiscal 2025 $14.2 trillion and $40.0 billion baselines. Source: Visa FY2025 annual report.
  • •BlackRock and Schwab quarterly net-flow prints versus the 2025 $698 billion and $519 billion baselines. A down market year that also shows outflows is a different story than 2025. Source: BlackRock and Schwab 4Q25 earnings.

What would change the view

Conditions or evidence that would invalidate the thesis or materially shift the risk picture.
  • •Industry NIM prints below the 3.25 percent pre-pandemic average for two consecutive quarters. The 2025 spread recovery would then look like a funding-cost one-off. Source: FDIC QBP series.
  • •A GSIB standardized CET1 print through the regulatory minimum plus buffers. Wells Fargo 10.61 percent and PNC 10.6 percent are the closest on this page. Source: company 2025 earnings.
  • •BlackRock or Schwab posting a full-year net outflow after a positive equity-market year. 2025 was an inflow year ($698 billion and $519 billion). The opposite would be share loss, not beta. Source: BlackRock and Schwab 4Q25 earnings.
  • •Visa constant-dollar payments-volume growth or Mastercard local-currency GDV growth turning negative for two quarters. The network thesis is volume, not a one-year 11 to 16 percent revenue print. Source: Visa and Mastercard earnings.
  • •The March 2026 capital NPRs finalized with a material increase in required CET1 for Category I and II banks, rather than the agencies' stated aim to streamline. Source: Federal Reserve March 19, 2026 release.
  • •S&P Global Ratings or Moody's MIS revenue falling on a collapse in billed issuance after the 2025 records (SPGI Ratings $4.72 billion, MCO MIS $4.12 billion, Moody's $6.6 trillion of rated debt). Source: SPGI and Moody's 2025 results.
  • •T. Rowe Price net inflows turning positive for two consecutive quarters while AUM is already $1.78 trillion. That would reopen the traditional-active gathering case after $56.9 billion of 2025 outflows. Source: T. Rowe Price 4Q25 earnings.

What we are not covering

Sub-areas, technologies, or companies we are deliberately excluding from the analysis, and why.
  • •Insurance underwriters and brokers. Those names live on the Insurance sector.
  • •Crypto-native issuers, miners, and venues (Coinbase and the rest of the Crypto roster). Visa, Mastercard, PayPal, JPMorgan, Goldman, Morgan Stanley, and BlackRock are dual-homed here from Crypto for the non-crypto P&L.
  • •European, Japanese, and Canadian banks. Not on the locked S&P 500 roster.
  • •Private credit managers other than Blackstone. Apollo, KKR, and Carlyle are adjacent and not on this page.
  • •Regional banks outside the locked roster (for example First Citizens, Comerica, Zions). Super-regionals on the page stop at the names in banks-capital-markets.json.
  • •Custom per-company KPI floors. Deferred on purpose. Sector-book charts do not count as the four-card KPI floor.
  • •Circana, Nilson, or Coalition Greenwich share tables. Paywalled, not independently verified here.

Sources

Primary sources cited in this analysis. Links open in a new tab.

Audit trail

Record of the last review and what changed. Required on every refresh.
Last reviewed: 2026-08-25
Change log
  • 2026-08-25Replaced the scaffold strategy with sourced 2025 full-year and 4Q25 prints from company earnings releases, 10-Ks, the FDIC Quarterly Banking Profile for the fourth quarter of 2025, and the Federal Reserve March 19, 2026 capital NPR release. No prior sourced thesis existed.
Unresolved questions
  • •Capital One and Synchrony 2025 billed-business or loan-growth prints were not pulled in this pass. American Express is the consumer-finance number on the page.
  • •Truist, Citizens, Fifth Third, Huntington, KeyCorp, M&T, and Regions 2025 revenue and CET1 were not pulled. Super-regional charts stop at U.S. Bancorp and PNC.
  • •FIS, Global Payments, Corpay, Jack Henry, and Broadridge 2025 revenue were not pulled. Processor charts use Fiserv and PayPal.
  • •FactSet, Cboe, Interactive Brokers, BNY Mellon, and State Street 2025 figures were not re-pulled for this page (custody AUC for STT is on the Crypto page).
  • •Confirm JPMorgan year-end 2025 standardized CET1 as 14.5 percent (4Q25 earnings) versus 14.6 percent in the later financial-highlights PDF.
  • •Mastercard worldwide GDV in USD (not only the 9 percent local-currency growth to $10.6 trillion) from the 10-K volume tables.
  • •Final text of the March 2026 capital NPRs after the June 18, 2026 comment deadline.
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Banks and Capital Markets Strategy: Market Data | Sterling