US Banks 1Q25 Preview: Tariffs Test Resilience

We detail top-of-mind items for U.S. bank investors heading into 1Q25 earnings. We’re expecting good fundamental results from the banks for 1Q25, though results were likely weighed by a slowdown in dealmaking and still-absent loan demand.

We detail our thoughts on tariff impacts to the US bank sector; we while a recession scenario presents significant headwinds to earnings and credit, we believe the sector is in a good position to manage through the headwinds. Notably, the sector has been in a balance sheet de-risking and capital-build mode over the past two years in preparation for regulatory changes, and this timing should mitigate the downside if tariffs result in recession.

We expect management teams to be light on specifics in terms of changes to FY25 guidance given the fluid policy situation, but with a negative bias.