Buzzberg Cup Live

Wall Street Banks Set to Pull in Almost $39 Billion From Trading

Watch on YouTube ↗  |  July 13, 2026 at 15:34  |  5:10  |  Bloomberg Markets
Speakers
Chris McGratty — KBW head of U.S. bank research

Summary

Chris McGratty, KBW Head of US Bank Research, previews US bank Q2 earnings, expecting strong trading and investment banking revenues to drive beats. He highlights higher-for-longer deposit competition and net interest margin pressure, dismisses tail risk for former problem banks like Zions, and names Citigroup as a deep value pick and Morgan Stanley as a best-in-class growth play.

  • Q2 bank earnings expected to blow out with investment banking +25% YoY and trading +15%
  • All banks have guided to beat expectations, but sustainability remains a question
  • Higher-for-longer rate environment creates intense deposit competition, pressuring NIMs
  • Wells Fargo returned to growth mode after asset cap removal, driving loan origination
  • Zions and other once-troubled banks now have capital ratios at two-decade highs and no tail risk
  • Regulatory changes (Basel III, stress tests, capital return) give banks more optionality
  • Citigroup is a deep value play with a believable 10-15% ROTCE path and 1x tangible book
  • Morgan Stanley is a premium growth pick with 30% wealth margins and 25% ROE
Ideas
Chris McGratty KBW head of U.S. bank research 0:00
Q2 bank trading and IB fees surge
US large banks are set to report strong Q2 earnings, with investment banking fees up 25% year-on-year and trading revenues up 15%, and have all guided to beat expectations, making the group attractive into earnings even though sustainability remains a question.
KBW Bank Index MED
Chris McGratty KBW head of U.S. bank research 2:48
Zions balance sheet risk is history
Zions Bancorp and other previously troubled banks are now history, with balance sheets strong, capital ratios at two-decade highs, and the 2023 bank failures fully weathered, removing the tail risk that once weighed on these names.
ZION MED
Chris McGratty KBW head of U.S. bank research 4:16
Deep value path to higher returns
Citigroup is a deep value play with a believable path from a 10-11% ROTCE to 14-15%, management under Jane Fraser delivered a home-run Investor Day and kept levers in reserve, while the stock trades at just 1x tangible book versus JPMorgan at 3x.
C HIGH
Chris McGratty KBW head of U.S. bank research 4:19
Best-in-class wealth margins and ROE
Morgan Stanley is a best-in-class growth play, generating 30% wealth management margins and a 25% return on equity, offering premium quality at the opposite end of the value spectrum from Citigroup.
MS HIGH
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This Bloomberg Markets video, published July 13, 2026, features Chris McGratty discussing KBW Bank Index, ZION, C, MS. 4 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Chris McGratty  · Tickers: KBW Bank Index, ZION, C, MS