Goldman Sachs and Morgan StanleyNarrow moat

JPMorgan Chase (JPM) — moat facet

They compete for the highest-margin business without the deposit base that pays for it, which is a permanent funding disadvantage and, in a good year, an advantage in focus.

In the Commercial & Investment Bank, JPMorgan's most direct competitors are two firms built the other way round.

Q2 2026 net income growth+84%Goldman Sachs+58%Morgan Stanley+41%JPMorganFocus wins the good years. Both became bank holding companies in 2008 for the funding.
They compete for the best business without the deposits that pay for it.

Goldman Sachs and Morgan Stanley compete hard in investment banking, markets and — increasingly — asset and wealth management, where Morgan Stanley in particular has built a formidable position. What neither has is a consumer deposit franchise of JPMorgan's scale, which means their funding is more expensive and, historically, less reliable. Both became bank holding companies during the 2008 crisis for precisely that reason.

JPMorgan's advantage shows in the league tables: it ranked first for global investment banking fees with an 8.4% wallet share in 2025, rising to 9.3% year to date in 20261. Balance sheet wins mandates — a bank that can lend alongside the advice gets asked to do both.

The counter-argument is real and worth stating. A focused firm allocates all its capital, management attention and compensation to the highest-returning activities, and does not carry a branch network or a card portfolio. In a strong year for markets and deals, that focus shows: Goldman's second-quarter 2026 profit rose 84% and Morgan Stanley's 58%, against JPMorgan's 41%2.

The falsifier is wallet share through a downturn. Balance sheet matters most when clients are worried; that is when the funding advantage converts into mandates.

Moat trajectory: Narrowing

In a strong markets year the focused firms out-grow the universal one: second-quarter 2026 profit rose 84% at Goldman and 58% at Morgan Stanley against JPMorgan's 41%. Focus wins the good years.

The number that tests this moat
Third-party estimate
Q2 2026 profit growth against the focused rivals
JPM +41%, GS +84%, MS +58%

In a strong quarter for markets and deals, the firms without a consumer bank grew faster — focus wins the good years. What JPMorgan has instead is funding that does not disappear when it is needed, which is why both of those firms became bank holding companies in 2008.

Source: Reported second-quarter 2026 results across the large US banks ↗
References
  1. ReportedJPMorgan ranked first for global investment banking fees with an 8.4% wallet share for 2025 and 9.3% year to date in 2026.
    JPMorgan Chase & Co., second-quarter 2026 earnings release (Form 8-K, exhibit 99.1) — net income $21.2bn ($7.70 per share), or $16.9bn ($6.14) excluding significant items; ROE 24%, ROTCE 29% and ROTCE excluding significant items 23%. Reported revenue $57.3bn and managed revenue $58.0bn; expense $27.3bn with a reported overhead ratio of 48%; credit costs $2.5bn with $2.4bn of net charge-offs and a $149M net reserve build. Average loans up 10% year on year and average deposits up 7%. CET1 Standardized 14.1% and Advanced 14.2%, total loss-absorbing capacity $590bn, Standardized RWA $2.1tn, cash and marketable securities $1.5tn; book value per share $133.01 up 9% and tangible book value per share $113.35 up 10%; Basel III CET1 capital $303bn; supplementary leverage ratio 5.5%; net payout over the last twelve months 73%. Segment returns: CCB ROE 34% with client investment assets up 21%, a Card Services net charge-off rate of 3.34%, card sales volume up 10% and active mobile customers up 6%; CIB ROE 22% with investment banking fees up 30% year on year, a #1 ranking for global investment banking fees at 9.3% wallet share year to date, markets revenue up 35% with fixed income up 6% and equity markets up 86%, and average client deposits up 11%; AWM ROE 48% with AUM of $5.1tn, up 18%. Significant items were a $4.6bn net gain related to Visa shares ($1.27 of EPS) and $1.0bn of gains on certain equity investments ($0.29). Jamie Dimon: 'These results were the product of a particularly favorable environment with an elevated level of market activity, as well as rigorous execution, years of consistent investment and thoughtful capital deployment.' — Q2 2026 · publ. 2026-07-14 · source ↗
  2. Third-party estimateSecond-quarter 2026 net income rose 41% at JPMorgan, 84% at Goldman Sachs and 58% at Morgan Stanley.
    Peer analysis of the large US banks — Bank of America's return on tangible common equity is projected by analysts to improve to 18% over the next two years; its shares closed at $63.81 on 11 August 2026, implying a price-to-tangible-book multiple of roughly 2.2 times against tangible book value per share of $29.37. In the second quarter of 2026, net income rose 41% at JPMorgan, 84% at Goldman Sachs, 58% at Morgan Stanley, 27% at Bank of America, 45% at Citigroup and 17% at Wells Fargo. — Q2 2026 · publ. 2026-08 · source ↗
Sources
Generated September 23, 2026