JPMorgan’s global strategy team released a positive outlook for the banking sector in 2026, expecting the industry to build on strong returns achieved in 2025.
Strategists, led by Nikolaos Painigirtzoglou, cite the return of steeper yield curves as a key driver for continued profitability. Steeper curves allow banks to achieve better returns on their loan portfolios.
The note highlights renewed confidence in the industry. Bank market capitalization relative to global GDP has reached its highest point since 2007.
JPMorgan believes the rerating of bank valuations is warranted and could continue. A favorable interest-rate environment and a benign macroeconomic and credit backdrop support this view.