U.S. inflation is picking up again, but third-quarter results at major large banks showed no clear signs of shrinking consumption or deteriorating credit soundness. Analysts say consumption and loan demand are holding up relatively well even as higher prices increase the burden on households.

American Banker reported on Oct. 15 that major U.S. banks including Citigroup, Wells Fargo and JPMorgan Chase confirmed steady growth in their consumer finance businesses in third-quarter results.

The U.S. Bureau of Labor Statistics said the consumer price index (CPI) for September rose 3.7 percent from a year earlier. That was 0.3 percentage point higher than August’s 3.4 percent, prompting talk of the Federal Reserve raising rates again.

Bank results were better than expected. Client balances in Citigroup’s wealth management unit rose 9 percent from a year earlier to $1.39 trillion. Revenue climbed 15 percent and net profit surged 93 percent over the same period.

Wells Fargo also posted gains in both revenue and profit on the back of growth in new credit card accounts and auto loans. Nonaccrual loans among consumer lending fell 8 percent from a year earlier.

JPMorgan Chase posted third-quarter net profit of $15.3 billion. Net charge-offs in the consumer and community banking unit were $1.98 billion, unchanged from a year earlier.

Total provisions for credit losses fell to $2.7 billion from $3.4 billion a year earlier. They were higher than $2.5 billion in the previous quarter, meaning risk factors have not completely disappeared.

The outlet said, "Rising prices are weighing on consumers, but they have not yet translated into a major shock to banks' profit and loss."

Banks are also preparing for new competition stemming from the spread of AI. JPMorgan executives said AI agents could intensify rate competition among banks by automatically finding more favorable deposit rates for customers.

If banks operate AI advisory services directly, legal liability tied to incorrect guidance or the handling of customer information is also expected to emerge as a new challenge.