Big US banks poised for strong Q4 as dealmaking revival lifts earnings

The largest US banks are expected to report stronger fourth-quarter profits when earnings season begins next week, buoyed by a revival in investment banking activity and sustained strength in trading businesses, according to a Reuters analysis of analyst estimates and industry data.

JPMorgan Chase, the country’s biggest lender, will kick off bank earnings on January 13, followed by Citigroup, Bank of America and Wells Fargo on January 14, with Goldman Sachs and Morgan Stanley reporting on January 15. Analysts expect the results to reflect improving capital markets conditions, particularly a sharp rebound in mergers and acquisitions and a healthier IPO pipeline.

Banking analysts see the fourth quarter as benefiting from a combination of rising deal flow, improving equity issuance and elevated trading activity across commodities, fixed income and equities, creating a favourable setup for investment banking revenues.


Data cited by Reuters from Dealogic shows global investment banking revenue rose 15% year-on-year to nearly $103 billion, the second-highest level since 2021, with JPMorgan topping overall league tables. Global mergers and acquisitions volumes surged to $5.1 trillion in 2025, up 42% from the previous year, driven by a wave of large cross-border transactions. Goldman Sachs led the industry in M&A advisory rankings during the period.

Beyond investment banking, analysts expect earnings to be supported by steady loan growth and improving net interest margins, a key profitability metric for lenders. Barclays analyst Jason Goldberg said in a note that banks are likely to benefit from stronger loan demand in the year ahead, supported by a pro-growth policy environment, lighter regulation, lower interest rates and potential changes to capital rules under President Donald Trump.

Reuters also cited Morningstar analyst Sean Dunlop saying that a resilient US economy should continue to underpin bank earnings, with solid nominal GDP growth expected and no recession factored into forecasts. While a slowdown in job growth could pressure consumer demand and lead to higher delinquencies, analysts believe the impact on bank results would remain limited.

Inflation remains a key risk heading into the new year, noting that a combination of tariffs, fiscal stimulus and tax cuts could reduce expectations for interest rate cuts. Analysts cautioned that if rates remain elevated, asset prices could stay firm even as deal activity moderates.

Reflecting improved sentiment, the S&P Bank Index has risen about 3% so far this year after gaining roughly 30% in 2025.

Bank-wise expectations

JPMorgan Chase

JPMorgan is expected to post a more than 3% rise in earnings per share in the fourth quarter, driven by stronger investment banking fees and market revenue, according to LSEG estimates cited by Reuters. Management has previously guided for low-single-digit growth in investment banking revenue and low-teens growth in market revenue. Investor focus is likely to remain on the bank’s 2026 expense outlook after comments on rising costs weighed on the stock last month.

Bank of America

Bank of America’s earnings per share are forecast to jump nearly 17%, helped by higher net interest income and stronger trading revenue, according to LSEG data. Management expects market revenue to grow in the high single-digit to low-double-digit range, while investment banking fees are likely to remain broadly flat.

Citigroup

Citigroup is expected to deliver a 32% surge in earnings per share, largely driven by gains in its capital markets business. The bank has indicated that investment banking fees rebounded sharply in the fourth quarter, supported by stronger dealmaking activity.

Wells Fargo

Wells Fargo is projected to report a 17.5% increase in earnings per share, supported by higher net interest income and a pickup in investment banking activity. Investors are closely watching the lender’s growth strategy following the removal of its $1.95 trillion asset cap by regulators in 2025.

Goldman Sachs

Goldman Sachs may see earnings decline nearly 4.9% year-on-year after posting unusually strong profits in the same quarter last year. While advisory fees from M&A are expected to remain robust, gains from equity investments in the asset management division are unlikely to be repeated. Wells Fargo analysts expect pressure on private banking revenue due to lower net interest income and higher compensation costs.

Morgan Stanley

Morgan Stanley’s earnings per share are estimated to rise more than 8%, supported by investment banking revenue. Citigroup analysts told Reuters that the firm’s wealth management business is expected to deliver another quarter of low-double-digit growth, benefiting from strong equity markets. The bank beat estimates in the previous quarter as dealmaking surged, with management describing its investment banking pipeline as being at record levels.

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(With inputs from agencies.)

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