Big Banks See Record Lending Haul as Low Yield Assets Roll Off

Watch on YouTube ↗  |  January 14, 2026 at 20:30  |  5:43  |  Bloomberg Markets
Speakers
Herman Chan — Head of Asia, CoinDesk

Summary

Herman Chan of Bloomberg Intelligence discusses fourth-quarter bank earnings, focusing on expense trends, Citi's turnaround, and investment banking momentum. Wells Fargo is seen as showing better expense control and tangible progress, while Bank of America's higher-than-expected expenses pressured its stock. Citi's multi-year restructuring under Jane Fraser is paying off with improved efficiency and progress toward a 2026 ROTCE target of 10-11%. Chan also expresses optimism for investment banking in 2026, citing a robust IPO calendar, deregulation, private equity activity, and lower rates.

  • Bank earnings results were solid but failed to meet a higher bar after bank stocks rose 18%.
  • Citi's turnaround under Jane Fraser is showing tangible progress, with efficiency ratio up 130 bps year over year.
  • Wells Fargo is guiding to 2% expense growth for the year, better than peers.
  • Bank of America's Q1 expenses rose about 4%, surprising analysts and pressuring the stock.
  • JPMorgan saw a Q4 investment banking fee decline that management attributed to deal timing, not lost activity.
  • Herman Chan is optimistic on investment banking into 2026 due to IPO, M&A, deregulation, PE, and lower rates.
  • Bank executives pushed back on a proposed cap on credit card fees, arguing it would reduce credit availability and harm the card business.
Ideas
Herman Chan Head of Asia, CoinDesk 0:12
Wells Fargo expense control beats peers.
Herman Chan highlights Wells Fargo as showing tangible progress in returns and profitability, and notes it is guiding to just 2% expense growth for the year. That compares favorably with peers and reflects improving efficiencies, making it look better on the expense front.
WFC MED
Herman Chan Head of Asia, CoinDesk 0:23
Bank of America expense surprise pressures stock.
Herman Chan says Bank of America's first-quarter expenses rose about 4%, surprising the analyst community and pressuring the stock. That expense surprise makes the stock less attractive relative to peers with better cost control.
BAC HIGH
Herman Chan Head of Asia, CoinDesk 2:38
Investment banking outlook strong into 2026.
Herman Chan is optimistic on investment banking into 2026, citing a robust IPO calendar, M&A activity ratcheting up from deregulation, more active private equity, and lower rates reducing borrowing costs. He expects further improvement across investment banking, underwriting, and M&A.
Investment Banking HIGH
Herman Chan Head of Asia, CoinDesk 4:47
Citi turnaround paying off, targeting higher returns.
Herman Chan sees Citi's multi-year turnaround under CEO Jane Fraser starting to pay off. The company has simplified its operations, reduced international consumer exposure, improved returns, and its efficiency ratio improved about 130 basis points year over year in the fourth quarter. He cites momentum in cutting costs and improving the top line, supporting management's 2026 return on tangible equity target of 10% to 11%.
C HIGH
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This Bloomberg Markets video, published January 14, 2026, features Herman Chan discussing WFC, BAC, Investment Banking, C. 4 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Herman Chan  · Tickers: WFC, BAC, Investment Banking, C