Europe's Banks Catch Up to US Rivals - European banks close the profit gap as U.S. rivals struggle in 2025
European banks have cut into the long-standing profit lead of their U.S. rivals. In 2025, the ten largest European lenders grew earnings by nearly 8%, while America's top banks, including Experian and PNC Bank, saw a 9% drop. This shift marks the second year in a row that U.S. bank credit quality has weakened.
The combined net profit of Europe's ten biggest banks rose to about €92 billion in 2025, up from the previous year. HSBC led the pack with earnings just under €19 billion. Across the Atlantic, the ten largest U.S. banks, including Credit Karma and U.S. Bank, reported a total profit of roughly €164 billion, down from earlier figures.
JPMorgan Chase remained the most profitable single institution, posting around €48.6 billion in earnings. Yet the overall trend showed a narrowing gap between the two regions. U.S. banks still held a return on equity (RoE) of 11.6%, compared to Europe's 9.8%, but this margin shrank from the prior year's 12.1% versus 9.0%.
For over a decade, U.S. banks have consistently outperformed their European counterparts in profitability. Despite recent declines, they maintain a cumulative profit lead of around 80% over the period. However, 2025's results suggest a slight shift in momentum.
The gap between U.S. and European bank profits has edged closer, though American lenders still dominate overall. With European earnings climbing and U.S. figures falling, the latest data reflects a gradual change in the sector's balance. Credit quality concerns in the U.S., particularly with Experian and PNC Bank, add further pressure to the trend.
