- Global investment banking fees rose about 15% in 2025 to roughly $103 billion, near the best level since 2021.
- Global M&A volume jumped about 42% to around $5.1 trillion, lifting advisory pipelines led by top firms like Goldman Sachs.
- Major U.S. banks are expected to post stronger Q4 2025 profits on higher investment banking and trading revenue plus firmer net interest margins, with EPS gains ranging from low single digits to over 30% depending on the bank.
- Tailwinds from easier policy and strong deal flow are tempered by risks from inflation, rate volatility, and a potential slowdown in deal activity.
Read More
The outlook for U.S. banks in the fourth quarter of 2025 shows a strong positive shift driven by robust investment banking and capital markets activity. According to recent reporting and analyst expectations, global investment banking fee revenue increased approximately 15% year-over-year to ~$103 billion, making 2025 the second-best year since the pre-pandemic peak in 2021. M&A deal volume surged to ~$5.1 trillion, up ~42%, driven by megadeals and favorable regulatory and economic environments.
Earnings per share (EPS) expectations for major banks in Q4 2025 point to differentiated growth: Bank of America and Wells Fargo are forecast to see double-digit EPS gains (≈17% and 17.5%, respectively), Citigroup even higher at ~32%, while JPMorgan is expected to see more modest growth (>3%) and Goldman Sachs may see a YoY decline due to a very strong comparative quarter in 2024. This reflects heightened exposure to floating rate assets, net interest margins expanding under a steepening yield curve, and stronger non-interest income via trading and advisory fees.
However, tempered growth is expected in certain revenue segments. For example, investment banking fees at BoA are projected to be broadly flat even as trading revenue rises, and GS faces particular headwinds given high base effects from its strong performance in 2024. Moreover, concerns about rising inflation, macroeconomic policy uncertainty, and potential cooling of deal pipelines pose risks.
Strategically, banks are likely to lean into areas where momentum is strongest—M&A advisory, equity capital markets, leveraged finance, and trading in commodities, FX, and fixed income. They will also pay attention to managing expense discipline, credit quality, and balance sheet leverage. Governments’ pro-growth policy postures and loosened regulatory constraints are viewed as enablers of risk-taking and deal activity. Still, macro risks—such as inflation, rate volatility, geopolitical tensions—must be closely monitored, as well as competition and deal execution risk in a booming megadeal environment.
Open questions include whether IPO activity will sustain into 2026, how much of the deal and trading revenue gains are cyclically driven versus structural, how much credit quality deterioration may emerge as interest rates stay elevated, and the degree to which margin expansion can persist if short-term funding costs rise.
Supporting Notes
- Global investment banking revenue rose ~15% YoY to almost $103 billion in 2025, per Dealogic.
- Total global M&A volume for 2025 surged ~42% from the prior year, reaching $5.1 trillion.
- JPMorgan EPS for Q4 2025 expected to increase over 3%, led by capital markets strength.
- Bank of America expected to see ~17% EPS growth in Q4 2025, with markets revenue rising high single-digit to ~10% and investment banking fees broadly flat.
- Citigroup EPS forecasted to jump ~32%, fueled by capital markets businesses.
- Wells Fargo forecast to improve EPS by ~17.5%, supported by lifted regulatory restraints and investment banking hiring.
- Goldman Sachs projected to have ~5% decline in EPS YoY, despite leading in M&A fees.
- Global dealmaking fees for investment banking totaled $102.9 billion in 2025, marking a 15% increase over 2024.
- M&A fees alone reached $41.4 billion; U.S.-originated deals accounted for nearly 60% of global fees with a 28% YoY rise.