Herman Chan

Intelligence Analyst covering the business and banking sector for Bloomberg Intelligence.

Claims

As speaker

Mentioned in

Key positions and views

The systemic risks from the 2023 regional banking crisis, specifically deposit flight and unrealized losses, are no longer a significant threat to the sector (Claim 30).

Strong Q1 2026 performance for large U.S. banks was largely a function of market volatility, which directly translated into 'gangbusters' M&A activity and double-digit growth in trading revenues (Claims 26, 48).

Citigroup is in the midst of a successful operational turnaround, demonstrated by its ROTCE significantly outperforming targets and substantial progress in its business transformation and regulatory remediation (Claims 15, 28, 35, 47).

Despite a positive outlook for the sector, individual bank performance is not uniform, with notable divergences such as Wells Fargo's net interest margin compression contrasting with KeyCorp's improved NII guidance (Claims 3, 21, 31).

The regional banking landscape is ripe for consolidation, and certain players like U.S. Bancorp are well-positioned to act as acquirers in this environment (Claim 9).

Podcast consensus on Chan

Points of consensus

▶Multiple claims across different episodes affirm that large U.S. banks, particularly JPMorgan and Citigroup, experienced strong first-quarter results driven by market volatility, which led to double-digit growth in trading revenues for both equities and fixed income (Claims 2, 10, 26, 49).Apr 2026

▶Chan consistently highlights Citigroup's strong first-quarter performance, repeatedly noting that its return on tangible equity (around 13-13.5%) significantly exceeded its full-year target of 10-11% (Claims 15, 20, 34, 47, 50).Apr 2026

▶Across several appearances, Chan predicts that Wells Fargo is expected to show strong balance sheet growth, a direct result of the Federal Reserve removing its asset cap restriction (Claims 11, 40, 43).

▶The recovery and strength of U.S. regional banks is a recurring point, with Chan noting their strong balance sheet growth, a rebound in lending, and the potential for consolidation in the sector (Claims 6, 9, 31).Apr 2026

Points of debate

▶Chan presents a conflicting narrative on Citigroup's M&A strategy. He cites a Bloomberg News report and acknowledges speculation that Citigroup might acquire a large regional bank to boost its U.S. deposit presence (Claims 4, 16), but he also directly quotes CEO Jane Fraser unequivocally stating the bank is 'not interested in doing any deals' (Claim 19) and offers his own analysis that a deal is unlikely due to the bank's weak valuation (Claims 12, 42, 44).

▶The analysis of Wells Fargo's financial health is multifaceted. While Chan points to the positive catalyst of the asset cap removal leading to expected balance sheet growth (Claims 11, 40), he also consistently flags the negative pressure on its net interest margin, noting a 13 basis point decline and management's expectation for further compression (Claims 3, 5, 21).

▶Chan's commentary on bank profitability drivers shows a mix of tailwinds and headwinds. He highlights 'gangbusters' M&A activity (Claim 48) and strong trading revenues (Claim 26) as major positives, while simultaneously pointing to challenges like margin compression at specific institutions (Claim 5) and disappointing fixed income results at others like Goldman Sachs (Claim 18).

Key themes

▶Strong Q1 Performance for Large U.S. BanksApr 2026

Chan's analysis consistently points to a robust first quarter for major U.S. banks, driven primarily by market volatility that fueled double-digit growth in trading revenues. He specifies that across the six largest banks, equities trading grew 25% and fixed income grew 11%, with Morgan Stanley being a top performer (Claims 2, 8, 26).

This theme suggests that despite broader economic uncertainties, the capital markets divisions of large banks are a key source of strength and profitability, capitalizing on market fluctuations that may challenge other sectors.

▶Citigroup's Turnaround and Strategic AmbiguityApr 2026

A significant portion of Chan's commentary is dedicated to Citigroup's ongoing transformation. He highlights its strong Q1 return on tangible equity (exceeding 13%) and notes its regulatory remediation is now 90% complete, while also covering the conflicting signals regarding its M&A ambitions (Claims 15, 16, 19, 28, 35).

Investors are receiving a dual message on Citigroup: operational performance is improving significantly, but its long-term growth strategy, particularly concerning large-scale acquisitions, remains a key point of uncertainty.

▶The Recovery and Consolidation of Regional BanksApr 2026

Chan asserts that the 2023 regional banking crisis is 'over,' citing the end of deposit volatility and the burn-down of unrealized losses. He points to strong balance sheet growth, a recovery in commercial lending, and record investment banking revenue at institutions like KeyCorp as signs of a healthy sector poised for consolidation, with U.S. Bancorp positioned as a potential acquirer (Claims 6, 9, 30, 39).

The regional banking sector has moved from a defensive posture to one of offense, creating opportunities for well-positioned banks to gain market share through both organic growth and strategic acquisitions.

▶Divergent Fortunes in Net Interest MarginApr 2026

Chan's analysis reveals a split in how banks are managing interest rate dynamics. While some regional banks like KeyCorp are issuing improved guidance for net interest income due to strong lending (Claim 31), he specifically notes that Wells Fargo is experiencing margin compression and expects it to worsen (Claims 3, 5, 21).

This highlights that the interest rate environment is not a uniform benefit for all banks; an institution's specific loan book composition and liability structure are critical determinants of profitability.

Source episodes

Sentiment over time

Not enough data for timeline

Changes over time

Pre-Q1 Earnings

Chan sets expectations for the first quarter, predicting 15% growth in trading and investment banking for JPMorgan Chase and strong balance sheet growth for Wells Fargo following the removal of its asset cap (Claims 10, 11, 41, 43, 45).

Q1 Earnings Reporting Period

Chan analyzes incoming results, confirming strong trading revenues across large banks (Claim 26), highlighting Citigroup's outperformance on ROTCE (Claims 15, 20), and noting specific results like Wells Fargo's margin compression (Claim 3) and Goldman Sachs' fixed income disappointment (Claim 18).

Analysis of Regional Banks

Chan provides commentary on the regional banking sector's recovery, noting strong balance sheet growth and lending activity at institutions like U.S. Bancorp and KeyCorp, which reported record Q1 investment banking revenue (Claims 6, 31, 38, 39).

Post-Crisis Assessment

In a definitive statement, Chan declares the 2023 regional banking crisis risk to be 'over,' citing the end of deposit volatility and diminishing unrealized losses on bank balance sheets (Claim 30).

Strategic Outlook

Chan synthesizes company strategies, covering the conflicting reports and statements on Citigroup's M&A appetite (Claims 16, 19), JPMorgan's physical branch expansion (Claim 17), and Bank of America's headcount reduction via AI adoption (Claim 46).

Suggested prompts

How does Herman Chan reconcile the conflicting reports on Citigroup's M&A strategy, and what does he believe is the most likely path forward for the bank? &nearr;Beyond trading revenues, what are the key underlying drivers of profitability that Chan identifies for the top-performing U.S. banks in the current environment? &nearr;What specific risks does Chan see for the banking sector now that he considers the 2023 crisis of deposit flight and unrealized losses to be 'over'? &nearr;How does Chan's analysis differentiate the strategic priorities of money-center banks like JPMorgan from those of super-regional banks like U.S. Bancorp? &nearr;

Key concepts

Citigroup 5 ep JPMorgan Chase 3 ep Wells Fargo 3 ep Regional Banks 2 ep Trading Revenue 4 ep Return on Tangible Equity (ROTCE) 4 ep M&A Activity 3 ep Net Interest Margin (NIM) 2 ep U.S. Bancorp 1 ep KeyCorp 1 ep

Notable quotes

“we are way out of the woods in terms of deposit volatility. That's nothing. We're not seeing that and haven't seen that for for over a year. And then the the unrealized losses are continuing to burn down. So banks are in a really good standing on that front. We think that risk is over at this point.”

Herman Chan · PepsiCo’s Snacks Business Starts to Rebound After Price Cuts | Bloomberg Intelligence

“On a year over year basis, it was gangbusters up 68 percent year over year.”

Herman Chan · Anthropic Draws Investor Offers at Over $800 Billion Value | Bloomberg Intelligence

“[0:23:13 -> 0:23:19] Jane was unequivocal saying that they're not interested in doing any deals.”

Herman Chan · Amazon to Buy Satellite Operator Globalstar for $90 a Share | Bloomberg Intelligence

“I can point to PNC's CEO, Bill Demchak, that just spoke earlier this morning. He said there was a question on where on the loss curve could private credit be in a recessionary environment. And basically he said it's not on the curve. He's saying that they don't expect any losses.”

Herman Chan · Anthropic Draws Investor Offers at Over $800 Billion Value | Bloomberg Intelligence

Report last updated: Apr 21, 2026

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