Major Wall Street banks see record profits thanks to increased deal activity and economic optimism
JP Morgan, led by Jamie Dimon, saw its profits jump to a record $58.5 billion, up from $49.6 billion last year. Goldman Sachs, under David Solomon, also had a great year, reporting $14 billion in profits, a big leap from $8.5 billion the previous year.
Interest rate cuts have made borrowing cheaper for companies, leading to more mergers and acquisitions. Goldman Sachs is shifting back to its roots in investment banking after trying out consumer banking.
JPMorgan’s investment banking revenue shot up by 46% to $2.6 billion, while Goldman Sachs saw a 24% increase in fees, reaching $7.7 billion, thanks to its debt underwriting.
Goldman’s fourth-quarter profits were $4.1 billion, compared to $2 billion last year. JPMorgan also had a strong quarter, posting $14 billion in profits, up from $9.3 billion.
Both CEOs expressed satisfaction with their results. Dimon noted the resilience of the US economy, pointing to low unemployment and strong consumer spending.
He also hinted that Trump might ease some banking regulations that he believes have been holding back the industry. The election has left companies feeling optimistic about a more growth-friendly agenda.
This positive sentiment has helped US stock markets rally since the election, with hopes that Trump will cut red tape to boost growth. Goldman’s shares rose slightly after the results, while JP Morgan’s stock remained steady.
Other banks are also doing well. Wells Fargo reported $5.1 billion in profits for the fourth quarter and $20 billion for the year, thanks to wealthy clients investing in savings products. Citi also had a solid year, with $2.9 billion in fourth-quarter profits and $12.7 billion overall.
