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American banks enjoy ‘Trump Bump’ with stellar Q4 revenue generation

Across the five Wall Street banks of JP Morgan, Goldman Sachs, Bank of America, Morgan Stanley, and Citigroup, investment banking revenue increased by 35% in the fourth quarter

In the fourth quarter of 2024, banking and trading revenue surged as the return of Donald Trump as the 47th United States President sparked a frenzy over taxes and deregulation that affected markets, debt and equity underwriting, and M&A (mergers and acquisition).

Banks also anticipate that the performance will hold up in 2025. Leaders of the top five American banks say that business bosses are feeling more confident than they have in a long time and are eager to make deals.

Across the five Wall Street banks of JP Morgan, Goldman Sachs, Bank of America, Morgan Stanley, and Citigroup, investment banking revenue increased by 35% in the fourth quarter compared to the same period last year to USD 8.8 billion.

“While no one has a crystal ball, there are a number of catalysts that we believe will continue to drive activity. There has been a meaningful shift in CEO confidence, particularly following the results of the US election,” Goldman Sachs chief executive David Solomon told analysts.

Ted Pick, the CEO of Morgan Stanley, characterised the shifting rates and geopolitical unpredictability as “paradigm shifts juxtaposed against renewed investor and corporate confidence,” which he claimed offer substantial opportunities.

According to Pick, Morgan Stanley is in a good position to benefit and has one of the strongest M&A pipelines in the last five to ten years.

“If the markets remain reasonably positive, interest rates remain reasonably stable, and the geopolitical environment remains reasonable, I believe that activity will increase throughout the year,” he stated.

JP Morgan remained at the top of the investment banking industry in the fourth quarter, with revenues of USD 2.48 billion, up 49% from the previous year. This includes advisory and underwriting services. Goldman, whose revenue increased by 24% to USD 20.05 billion, came next.

BofA recently overtook Morgan Stanley for third place, with investment banking revenues increasing by 25% to USD 1.64 billion and 44% to USD 1.65 billion, respectively. Citi was far behind with revenues of USD 951 million, up 35% year-over-year.

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