Wall Street's top banks hit record 2025 revenue as deal flow rebounds

• Trading desks drove earnings strength, with equities trading revenue surging 23-33% across major banks due to market volatility and increased hedge fund leverage, particularly at Goldman Sachs which generated $16.5 billion in equities trading revenue.
• The four largest US lenders expanded loan books by $385 billion (nearly 10% growth), with the biggest surge coming from lending to specialty finance firms, private equity funds, and private credit investors (up 30%), raising concerns about hidden leverage in the financial system.
• Investment banking pipelines are robust, with M&A volumes potentially approaching 2021 records and debt underwriting surpassing 2020 peaks, fueled by anticipated IPOs from high-profile companies like OpenAI, SpaceX, and Cerebras.

Wall Street Banks Achieve Record 2025 Revenue on Deal Revival

Key Financial Performance

The six largest U.S. banks—JPMorgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley—generated a record $593 billion in revenue for 2025, up 6% year-over-year. Combined profits reached approximately $157 billion, an 8% increase from 2024, just below the 2021 pandemic-era peak.

Trading Drives Earnings Strength

Equities trading emerged as the standout performer, fueled by market volatility following April tariff announcements and subsequent recovery that pushed the S&P 500 and Dow to record highs. Goldman Sachs led with $16.5 billion in equities trading revenue (up 23%), while Morgan Stanley and JPMorgan posted 28% and 33% gains respectively. Increased hedge fund activity and leverage usage amplified trading volumes.

Dealmaking Revival

Investment banking momentum accelerated as M&A activity and IPO pipelines strengthened. Industry debt underwriting surpassed 2020 peaks, with Goldman CEO David Solomon projecting M&A volumes could approach 2021 records. High-profile companies including OpenAI, SpaceX, and Cerebras reportedly considering 2026 IPOs signal continued strength.

Lending Surge

The four largest lenders expanded loan books by $385 billion (nearly 10%), the biggest annual increase in years. However, growth concentrated in trading-desk lending to specialty finance firms and private equity funds (30% increase), rather than traditional consumer lending (2-3%). JPMorgan disclosed exposure to non-bank financial institutions rose from $50 billion (2018) to $160 billion (2025).

Policy Headwinds

President Trump's proposal to cap credit card interest rates at 10% for one year has unsettled lenders, with executives warning of reduced credit availability and restricted lending.

2026 Outlook

Bank executives expressed confidence for continued strength, citing healthy economic conditions, deregulation potential, and robust deal pip