01:32 PM EDT, 10/10/2025 (MT Newswires) -- US banks are expected to record a double-digit annual increase in third-quarter core earnings, driven by higher net interest income, RBC Capital Markets said in a Friday client note.

The brokerage estimates lenders' median core per-share earnings to rise by 10% from the third quarter of 2024, buoyed by net interest revenue and core noninterest income, partially offset by higher expenses and loan loss provisions.

Third-quarter net interest income is estimated to grow 6.2% on an annual basis, RBC's co-head of global financials research, Gerard Cassidy, said in the note.

The brokerage anticipates JPMorgan Chase ( JPM ) , Goldman Sachs ( GS ) and Morgan Stanley ( MS ) to top Wall Street's EPS estimates in the September quarter. Bank of America ( BAC ) and Wells Fargo ( WFC ) are projected to miss market expectations, while Citigroup ( C ) is forecast to post EPS in line with Street views, RBC said.

All six lenders are scheduled to release their latest quarterly results next week.

Other banks included in RBC's analysis included Bank of New York Mellon ( BK ) , State Street (STT), PNC Financial Services Group ( PNC ) and KeyCorp ( KEY ) .

"We remain positive on the bank stocks over the next 12 to 18 months, but uncertainty created by the Trump administration's economic policies could still weigh on this outlook," according to Cassidy. "Over this period we expect the Federal Reserve will have cut short-term interest rates upwards to (25 to 75 basis points)."

Earlier in the week, minutes from the Fed's September monetary policy meeting showed that most participants indicated it would be appropriate to further lower interest rates later this year amid growing concerns around the labor market. The Federal Open Market Committee reduced its benchmark lending rate by 25 basis points at that meeting.

Markets widely expect the FOMC to deliver another quarter percentage point cut later this month, according to the CME FedWatch tool.

RBC expects banks' merger and acquisition activity to gain momentum and net interest income growth to accelerate as funding costs decline.

"Once the uncertainty around the Trump Administration's policies subsides, (commercial and industrial) loan growth should accelerate over the next 12 months," Cassidy wrote.

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