This week's edition of Retail Finance Weekly explores how top US banks posted second-quarter profits above market expectations on stronger trading and dealmaking revenue. Consumer banking growth was far more muted at JPMorgan, Bank of America and Citigroup, while Wells Fargo's retail segment kept pace with its investment banking gains. The same week, the United Kingdom (UK) brought buy now, pay later (BNPL) lending under Financial Conduct Authority (FCA) regulation on 15 July, even as Klarna separately applied for a full US banking licence. Nubank completed its transition to a full bank in Mexico, and Tabby launched a new spending account under the UAE wallet licence it secured in April. Read more on the week's key developments: 1. JPMorgan Chase reports record $21.2 billion net income for second quarter JPMorgan Chase reported record second-quarter net income of $21.2 billion, up from $15 billion a year earlier, as a rebound in initial public offering (IPO) activity and dealmaking lifted investment banking fees to their highest level since 2021 while equity traders benefited from volatile markets. Profit included $5.6 billion in one-off gains, mostly from the bank's Visa stake, with underlying net income at $16.9 billion excluding these items. Consumer & Community Banking (CCB) net income rose 3% to $5.3 billion, with revenue up 8% to $20.3 billion. The branch network grew to 5,135 locations, average deposits rose 3% to $1.1 trillion on more than 500,000 net new checking accounts, and card sales volume rose 10% to $535.8 billion, with the card net charge-off forecast lowered to 3.2%. JPMorgan raised its full-year net interest income forecast to roughly $105.5 billion and its expense forecast to about $107.5 billion, citing continued investment in technology, branches and bankers alongside broad-based revenue strength across the firm. 2. Bank of America reports 27% rise in second-quarter net income to $9.1 billion Bank of America's second-quarter net income rose 27% to $9.1 billion, or $1.21 per share, beating analyst expectations, as record trading revenue of $7.1 billion and a 50% jump in investment banking fees drove the result. Equities trading revenue climbed 70% amid volatility linked to US-Iran tensions and swings in oil prices, while net interest income rose 9% to $16.2 billion and noninterest income rose 22% to $15.6 billion, with every business segment contributing to growth. Bank of America now expects full-year net interest income growth at the upper end of its 6% to 8% range, with a role in a growing global mergers and acquisitions (M&A) market underpinning the investment banking gains. Consumer Banking net income rose 10% to $3.3 billion, with revenue up 5% to $11.3 billion and card spend up 9% to $266 billion, while verified digital users rose to about 60 million and 70% of consumer sales now happen through digital channels. Average loans and deposits each grew only around 1%, to $321 billion and $957 billion respectively, pointing to existing customers transacting and spending more rather than the bank adding meaningfully to its loan book or deposit base this quarter. 3. Wells Fargo reports 17% rise in second-quarter net income to $6.4 billion Wells Fargo's net income rose 17% to $6.4 billion in the second quarter, with diluted earnings per share (EPS) up 25% to $2.00, beating analyst estimates as strong loan growth lifted interest income and a trading rebound bolstered results. Revenue rose 9% to $22.6 billion, with every operating segment growing and pre-tax pre-provision profit up 20% to $9.0 billion; net interest income rose 5% to $12.3 billion on average loans up 12% year on year, and the bank retained its annual net interest income forecast of roughly $50 billion. The board plans to raise the quarterly dividend 11% to $0.50 per share, after returning more than $9.8 billion to shareholders in the first half of the year. Unlike the other top US banks this quarter, Wells Fargo's growth showed up in retail as much as in investment banking. Consumer Banking and Lending net income rose 19% to $2.3 billion on 6% revenue growth, with primary checking accounts growing year on year for a 13th consecutive quarter, credit card new accounts up 46%, and auto loan originations up 41% on a new partnership making Wells Fargo the preferred financing provider for Volkswagen and Audi in the US. 4. Citigroup reports 45% rise in second-quarter net income to $5.8 billion Citigroup's second-quarter net income rose 45% to $5.8 billion, or $3.15 per diluted share, on revenue of $24.8 billion, up 14% and the bank's highest quarterly total in a decade, driven by record equities trading and a 34% rise in banking revenue. Return on tangible common equity reached 13%, with the efficiency ratio improving to 57.4% from 62.7% as expenses rose just 5% to $14.2 billion, producing over 9 points of positive operating leverage. Shares fell nonetheless on plans to raise investment spending and an unchanged 10% to 11% full-year return target; the bank returned about $5.0 billion to shareholders and announced a $30 billion buyback alongside a 12% dividend increase. US Consumer Cards (USCC) was the one segment to lag, with revenue up just 1% to $4.5 billion as higher partner-payment and acquisition costs offset loan and spend growth. Net income still rose 12% to $852 million on lower credit costs, with return on tangible common equity at 22%, general purpose card acquisitions up 135% and average loans up 8%. Chief executive officer Jane Fraser cited "short-term headwinds" from the cards investments, pointing to markets and banking, not cards, as the driver of the quarter's profit surge. 5. Visa launches AI assistant to embed personalised guidance in banking apps Visa unveiled AI Financial Assistant on 14 July, a white-labelled service that lets banks embed conversational, AI-driven spending insights directly inside their own apps using data from 257 billion annual Visa transactions, with no custom development required. The service will pilot with US financial institutions in August, ahead of a global rollout, and follows Visa's OpenAI partnership announced in June. Rather than launching a Visa-branded app, the assistant sits inside banks' own interfaces, so Visa becomes the intelligence layer behind the relationship. The approach is not uncontested, as Citi already uses Mastercard's Agent Pay to manage risk on its own AI-driven payments. 6. Klarna applies for US banking licence to bring operations in-house Klarna submitted applications to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC) on 6 July to establish Klarna Bank USA, a proposed Utah-chartered industrial bank. The company has operated as a licensed bank in Europe since 2017 but has served its 30 million annual US customers through partner banks, often WebBank, extending more than $91.3 billion in credit since 2019. If approved, the new charter would let it bring payments, savings, credit and merchant services in-house as a wholly owned, FDIC-insured subsidiary with its own independent board and governance. PayPal and Affirm have both filed for similar industrial bank charters in recent months. 7. UK brings BNPL under FCA regulation, nearly 11 million users now covered The UK's FCA began regulating BNPL lending on 15 July, bringing an estimated 10.9 million users and firms such as Klarna, Clearpay and Affirm under its consumer credit regime for the first time. Lenders must now run affordability checks on every purchase, disclose repayment terms clearly, and give customers access to the Financial Ombudsman Service and Section 75 protections on purchases between GBP 100 ($134) and GBP 30,000 ($40,200). Klarna is applying for a US bank charter at the same time its core UK product moves from largely unregulated credit to full FCA oversight. Experian data published on 13 July found over 100 million UK BNPL transactions last year worth more than GBP 7 billion ($9.4 billion), with 98.5% of balances repaid on schedule. 8. Tabby prices new spending account against UAE banking's fee structure Riyadh-based fintech Tabby, which also operates in the UAE, launched Tabby Cash this week, the first product built on the Stored Value Facilities licence it secured from the Central Bank of the UAE in April, with more than 150,000 users already on the account ahead of a full UAE rollout in the coming weeks. Tabby's own pitch cites UAE credit card interest rates of 30% to 46% on unpaid balances, current accounts with minimum-salary requirements and below-threshold fees, and international transfers costing AED 75 ($20) or more before exchange-rate markups. The account itself carries no setup, account or card fees, with free unlimited local transfers and cashback up to 3% through 1 November. The launch arrives as the $4.5 billion company, widely expected to pursue a Tadawul listing, builds out the deposit side of a broader GCC platform, having added consumer and SME lending licences in Saudi Arabia last month. 9. Malaysia's Boost Bank introduces agentic AI capabilities for everyday banking Malaysia's Boost Bank announced on 6 July enhancements to its Boba AI platform, introducing agentic AI capabilities across the Boost app and Boost Bank app. The upgraded platform lets customers complete everyday banking tasks through conversational interactions, including onboarding, bill payments and customer support. Boost said Boba Voice, its 24/7 AI voice service launched in May 2026, has handled 90% of voice enquiries and cut waiting times to as little as three seconds, with more than 80% resolved on first contact. Since January, over 30,000 customers have used Boba AI, generating close to 100,000 requests. Boost is not the only Malaysian digital bank implementing conversational AI. YTL-backed Ryt Bank markets its own Ryt AI, built to understand Bahasa Malaysia, English and Manglish, as its flagship feature. With five licensed digital banks chasing a customer base that's roughly 65% underserved or underbanked, per Bank Negara Malaysia, AI-driven service quality is becoming a competitive line. 10. Nubank receives final approval to operate as full bank in Mexico Nubank México received Operations Authorisation from Mexico's National Banking and Securities Commission (CNBV) on 10 July, the final step in a licensing process that began with its banking licence approval in April 2025, and must begin operating as a full bank within 30 days. The approval lets Nubank move beyond its existing savings and credit products into a broader banking offering, including additional credit, payments and deposit services, for a base of more than 15 million customers, roughly 15% of Mexico's adult population. Nubank's shift from Sociedad Financiera Popular (SOFIPO), a smaller deposit-taking licence category originally designed for community-focused lenders, to full bank status changes what kind of customer it can compete for. Under the old structure, that customer base was reachable for savings and credit; a multiple bank licence now opens the door to salary accounts and primary banking relationships. Retail Finance Weekly is a regular briefing on the forces reshaping retail banking and digital finance globally.
