European banks narrow profit gap with US rivals, EY study finds

Europe's leading banks narrowed the gap slightly with their US competitors last year, according to a study by consultancy and auditing firm EY.

While the 10 largest European banks increased their combined profits by nearly 8% over the course of the year, their rivals in the United States recorded a roughly 9% decline in earnings.

Despite this, the cumulative net profit of the top 10 US banks remained significantly higher at just under €164 billion ($189 billion), almost 80% more than the roughly €92 billion generated by Europe's 10 largest banks by total assets.

US banks have outperformed their European counterparts in every year of the past decade.

US tariff policy weighs on banks

The latest analysis, published out of EY's German office in Stuttgart, suggests that the US administration's tariff policy has not left US banks unaffected, EY partner Ralf Eckert said.

Credit quality has deteriorated noticeably for the second year in a row, Eckert said. However, US banks still outperform their European peers on key indicators, although the gap has narrowed in recent years, he added.

JPMorgan far ahead in profits

Among the banks examined – which include Germany's Deutsche Bank as the only German institution – US giant JPMorgan Chase again topped the ranking by a wide margin, reporting profits of around €48.6 billion in 2025.

Among Europe's major banks, HSBC posted the highest profit last year, at just under €19 billion, according to the EY analysis.

The profitability gap between the US and Europe has also narrowed somewhat. US banks recorded a return on equity (RoE) of 11.6% in 2025, compared with 9.8% for European banks. A year earlier, the figures stood at 12.1% and 9.0% respectively.

Return on equity measures profit relative to shareholders' equity and therefore indicates how efficiently a company uses its capital.