High interest rates fail to dampen borrowing demand, as the net interest income of the top three U.S. banks hits a historic high again.

October 13 — Despite rising interest rates, U.S. consumers and businesses continued to borrow, driving loan business revenue at the three largest U.S. banks to a new record high in the third quarter. Earnings reports released on Tuesday by JPMorgan Chase, Citigroup and Wells Fargo showed that the three companies' combined third-quarter net interest income reached $56.5 billion, setting a record for the fifth consecutive quarter.

JPMorgan expects net interest income to grow further in 2027. This outlook stands in sharp contrast to expectations earlier this year. At that time, banks generally expected interest rates to decline, while record trading revenue drew most of investors' attention, leaving the traditional interest income business from loans and other interest-earning assets relatively overlooked.

Banks also believe consumers and businesses are still able to repay loans on time. All three banks reported a decline in nonaccrual loans, meaning the scale of loans on which banks stopped recognizing interest income decreased. Bank of America will report third-quarter results on Wednesday. However, banks remain cautious in the face of a series of geopolitical uncertainties, including the wars in Ukraine and the Middle East, persistently stubborn inflation and high oil prices.