NEW YORK — Major U.S. banks have reported a generally resilient third-quarter performance, with investors examining lending activity, trading revenue and credit quality for signs of continued economic strength. The results are arriving as financial institutions navigate elevated interest rates, changing borrowing costs and uncertainty about the direction of the U.S. economy.

Several large banks reported results during the October earnings season. Goldman Sachs recorded third-quarter net revenue of approximately $18.68 billion and net earnings of $5.29 billion. Morgan Stanley reported revenue of approximately $20.3 billion and net income of $4.9 billion. Both institutions benefited from activity in important parts of their financial businesses.

The results highlight how banks can generate revenue from several sources, including consumer and commercial lending, investment banking, trading and wealth management. Performance varies according to market conditions, customer activity and the cost of obtaining deposits and other funding.

Lending growth remains an important indicator

Investors are watching loan balances because lending activity provides insight into demand from households and businesses. Commercial companies may borrow to finance inventory, equipment, expansion projects and working capital, while consumers use credit for vehicles, homes and everyday purchases.

Recent reports from U.S. regional banks have indicated continued loan demand across several business categories. That resilience suggests some companies remain willing to invest despite uncertainty over inflation and borrowing costs.

However, stronger loan growth does not automatically translate into higher profitability. Banks must consider the interest earned on loans relative to the cost of deposits and other funding. If deposit costs rise rapidly, lending margins can narrow even when loan volumes increase.

Banks must also account for the possibility that borrowers may struggle to repay debt if employment weakens or business conditions deteriorate.

Trading and investment banking support earnings

Market volatility can create opportunities for banks with large trading operations. Investors and businesses may increase activity in equities, fixed-income securities, currencies and other financial instruments when market conditions change.

Investment banking revenue depends on transactions such as mergers, acquisitions, bond issuance and stock offerings. A stronger deal pipeline can support fee income, although transactions may be postponed if financing conditions become less favorable.

Wealth management provides another source of revenue for institutions serving affluent households and institutional clients. Higher asset values and new client investments can support fees, while falling markets can reduce assets under management.

These different business lines help explain why earnings vary among banks even when they face similar economic conditions.

Credit quality remains a concern

Investors are also examining loan-loss provisions, which banks set aside to cover expected defaults. An increase in provisions may indicate that management expects borrowers to face greater financial pressure.

Consumer credit, commercial real estate and loans to smaller businesses are among the areas analysts may scrutinize. The risk differs by institution, depending on its lending mix, underwriting standards and geographic exposure.

Banks must balance the opportunity to expand lending against the need to maintain adequate capital and liquidity. Weak credit controls can undermine profitability even after a period of strong loan growth.

What investors will watch next

The next stage of the earnings season will provide additional information about loan demand, deposit costs, credit quality and management expectations. Investors will also assess how interest-rate changes could affect future net interest income.

For customers, bank performance can influence the availability and price of credit, although individual loan terms depend on personal financial circumstances and lender requirements.

Outlook

Third-quarter results suggest that several major U.S. financial institutions continue to benefit from active markets and lending demand. Nevertheless, sustained profitability will depend on controlling funding costs, managing credit risks and maintaining revenue growth if economic conditions change.

Source: Goldman Sachs third-quarter 2026 earnings release