The Zacks Analyst Blog Highlights JPMorgan, Citigroup, Wells Fargo, Morgan Stanley

For Immediate Release

Chicago, IL – September 10, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: JPMorgan JPM, Citigroup C, Wells Fargo WFC, Morgan Stanley MS.

Here are highlights from Tuesday’s Analyst Blog:

JPMorgan, Citi & Others Face Pressure to Lend More than Reward Shareholders

Six of the largest banks, including JPMorgan, Citigroup, Wells Fargo, Morgan Stanley, Bank of America and Goldman Sachs, have been instructed by U.S. Senators Elizabeth Warren and Bernie Sanders to focus more on boosting lending activities rather than raising dividends and share buybacks.

Per a Reuters report, the senators sent joint letters to the CEOs of these banks because they were of the opinion that, in the name of easing regulations, these banks have been making wealthy shareholders richer and raising executive compensation at the cost of financial stability and economic growth.

The senators said that while these banks lobby for deregulation in Washington under the banner of boosting lending and economic growth, their actual behavior prioritizes shareholder returns, rather than significantly increasing loans.

While JPM, Citigroup, Wells Fargo and Morgan Stanley declined to comment, BofA and Goldman Sachs did not immediately respond to requests for comment.

Recent Capital Actions by Major Banks

After clearing the Federal Reserve's annual stress test this year, which reflected that lenders had enough capital to withstand scenarios such as a severe economic downturn, banks announced plans to raise their third-quarter dividends.

JPMorgan approved a $50-billion share repurchase program and hiked its quarterly dividend to $1.50 per share. Goldman Sachs raised its dividend 33.3% to $4 per share and Citigroup hiked its dividend 7.1% to 60 cents.

Likewise, Morgan Stanley announced an 8% hike in dividend to $1.00 per share and reauthorized a multi-year share repurchase program of up to $20 billion. Wells Fargo raised its third-quarter stock dividend 12.5% to 45 cents per share.

Warren & Sanders Push to Keep Banks Strong

The senators' recent actions come as they seek to preserve and strengthen post-2008 banking safeguards. They have been opposing Wall Street's push to roll back capital requirements and annual stress testing rules, which were put in place after the global financial crisis.

The senators argue that loosening capital and liquidity standards would weaken the financial system and increase the risk of another crisis. They urge regulators to maintain rigorous oversight, require greater transparency on bank practices such as overdraft fees, and redirect bank profits toward responsible lending rather than shareholder payouts.

They emphasize that higher capital requirements and stress tests are not burdens but essential tools for economic stability because they believe that renewed deregulatory efforts, particularly under a second Trump administration, can leave the economy more vulnerable in the next downturn.

Notably, the Fed has recently finalized new capital rules for the largest banks, reinforcing resilience against future crises, an outcome that aligns with the senators' push for stricter safeguards.

How Will Increased Lending Affect Banks' Profitability?

In the short term, if economic conditions are robust, higher lending generally lifts bank's profits as net interest income (NII) increases. Increased lending leads to a rise in the total interest collected, aiding bank profits, especially when interest rates allow for a healthy margin.

However, in the long run, if banks are obliged to lend to riskier clients or during economic downturns, loan losses may eventually erode profits. Loan loss provisions and non-performing assets typically rise with aggressive lending, diminishing returns over time.

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