US Bank Profits Surge On Investment Banking Jump In Fourth Quarter

US bank profits in the latest reported fourth quarter are surging mainly because investment banking revenues have rebounded sharply as dealmaking, IPOs, and debt issuance pick up again. Expectations are that the largest U.S. banks will show notably higher earnings per share and net income when they report, reversing the pressure seen during the recent deal slump.​

What is happening

• The largest U.S. banks are projected to post significantly higher fourth‑quarter profits, driven by a jump in investment banking revenue as mergers and acquisitions and capital‑markets activity recover.​

• Higher investment banking fees are coming from more equity and debt underwriting and advisory work as companies return to public and private markets to raise capital or pursue deals.​

Role of investment banking

• Global investment banking revenue has climbed back above 100 billion dollars for the year, making it one of the strongest years on record and supporting much better fee income for Wall Street divisions.​

• At major banks like JPMorgan, Goldman Sachs, Bank of America, Citigroup, Morgan Stanley and Wells Fargo, fourth‑quarter investment banking fees have risen by roughly 25–60% year‑on‑year, with particularly strong gains in equity and debt underwriting.​

Examples from big banks

• JPMorgan’s Wall Street businesses recently reported around a 49% jump in investment‑banking fees and more than 20% growth in trading revenue in the fourth quarter, which helped drive a roughly 50% surge in quarterly profit in that period.​

• Other large institutions such as Goldman Sachs and Wells Fargo have also recorded big year‑over‑year profit increases as stronger markets, tighter credit spreads, and improved CEO confidence translated into more deals and securities issuance.​

Why now

• The rebound reflects improved market conditions: lower volatility than during the banking‑stress period, expectations of easier monetary policy, and greater corporate confidence following the U.S. election and a more business‑friendly policy outlook.​

• After nearly two years of muted M&A and IPO activity due to higher interest rates and recession fears, a backlog of delayed deals is now being executed, boosting fee pools at the major U.S. banks.​