Investment Banking 2025: Mega-Deals, Private Credit, AI & Middle-Market Momentum

The investment banking landscape of late 2025 is characterized by a strong rebound after a period of uncertainty. Revenue for major global banks is projected to grow roughly 10%, with equities trading producing the highest gains (≈15%) versus more modest increases across origination, advisory, and fixed income/fx/commodities businesses. Megadeals—transactions above $5 billion—are contributing disproportionately to total deal value, pushing global M&A totals to approximately $4.0–4.3 trillion so far. [8][18]

Regulatory shifts are opening up previously constrained spaces. For example, U.S. regulators have relaxed rules on how much leverage banks can lend in private equity buyouts—termed the ‘six-times EBITDA’ guideline—allowing banks to compete more directly with private credit providers. [15] Non-bank challengers are also influencing the CIB business model, particularly in credit, lending, and structured finance. [7]

AI and technological innovation are moving from incremental boosts toward cornerstones of strategy. AI agents, as defined in recent CIB research, are being deployed across front, middle, and back office workflows with the potential for 25–40% productivity gains for bankers and 20–35% for operations. [7][10] Digital assets and stablecoins are emerging as adjacent frontiers, especially around settlement, payments, and tokenized deposits. [7]

Talent strategy is shifting. Firms are promoting internally over hiring laterals, focusing on sector-specific leadership (TMT, energy, etc.), and expanding middle-market coverage via regional presence. JPMorgan’s expansion of its middle-market investment banking group from 4 to nearly 300 bankers across US regional hubs is a case in point. [16] Meanwhile, in EMEA, most banks are showing caution in hiring, planning for growth in 2026 while avoiding overextension.

Looking forward, strategic implications include: aligning business models with the growth of private credit and non-banking competition; integrating AI at scale rather than pilots; deepening sector-specialized capabilities particularly in tech/AI infrastructure; and balancing exposure to volatile macro/regulatory risks while seizing upside in megadeals and high-growth sectors. Open questions remain about regulatory risks tied to renewed leverage, AI governance, and whether regional fragmentation will limit cross-border deal flow.