Total investment banking fees across the six largest US banks reached $8.6 billion, with an average growth of 39% compared to the previous year. Wells Fargo led in growth, with fees surging 59%, followed by JPMorgan, which saw a 48% increase. Both firms capitalized on strong activity across equity and debt capital markets.
Q4 investment banking fee summaries:
- Wells Fargo: 59% growth, $725 million
- JPMorgan: 48% growth, $2.42 billion
- Bank of America: 44% growth, $1.7 billion
- Citigroup: 35% growth, $925 million
- Morgan Stanley: 25% growth, $779 million
- Goldman Sachs: 24% growth, $2.05 billion
Q1 2025 and beyond
Overall, the momentum from 2024’s late surge in M&A activity appears set to carry into 2025, with cautious optimism prevailing among investment bankers and corporate dealmakers. A rebound in equity and debt capital markets in 2024 has created a solid foundation for 2025 while private equity is expected to play a more significant role looking ahead as firms work to deploy capital after extended holding periods. Meanwhile, major shifts in technology, energy, and supply chain shifts are expected to remain key drivers of dealmaking.
While the new regulatory environment is widely viewed as more supportive, uncertainties surrounding tariffs and the persistence of inflation could present challenges. Global political conflicts and interstate tensions will also remain a significant source of significant uncertainty, increasing downside risks for cross-border transactions, domestic and global corporate strategies, and the macroeconomic outlook.
Despite these concerns, dealmakers are hopeful that pro-business policies and a favorable tax and regulatory environment will encourage higher levels of activity. Overall, the appetite for deals remains strong, with many viewing 2025 as a year of opportunity, even amidst the challenges. As the industry navigates these dynamics, that mix of eager and cautious optimism will likely define the year ahead.
Goldman Sachs
Goldman Sachs' investment banking fees increased 24% to $2.05 billion in the fourth quarter, driven by debt underwriting supported by strong leveraged finance activity and corporate bond sales.
"There has been a meaningful shift in CEO confidence, particularly following the results of the US election," CEO David Solomon said during an earnings call. "Additionally, there is a significant backlog from sponsors and an overall increased appetite for dealmaking, supported by an improving regulatory backdrop."
Equity underwriting revenue surged 98%, and debt underwriting revenue climbed 51% in the fourth quarter, driven by secondary and initial public offerings, private placements, and leveraged finance activity.
Goldman Sachs' advisory revenue fell 4% in the fourth quarter but increased for 2024, driven by a rise in completed deals, the bank said.
Last month, CEO David Solomon said at a Reuters conference that dealmaking in equities and mergers and acquisitions could surpass 10-year averages in 2025.
Recently, Solomon also told an audience of tech investors and employees that initial public offerings are expected to pick up.
JPMorgan Chase
JPMorgan's investment banking fees surged 48% to $2.42 billion, marking a sharp improvement from the 31% growth recorded in the previous quarter.
JPMorgan CEO Jamie Dimon attributed the results to a "resilient" US economy, noting that "unemployment remains relatively low, and consumer spending stayed healthy, including during the holiday season. Businesses are more optimistic about the economy, and they are encouraged by expectations for a more pro-growth agenda and improved collaboration between government and business."
However, Dimon highlighted two "significant risks" to the economy, warning that "ongoing and future spending requirements will likely be inflationary, and therefore, inflation may persist for some time. Additionally, geopolitical conditions remain the most dangerous and complicated since World War II."
Morgan Stanley
Investment banking fees increased 25% in the quarter, driven by advisory fees rising to $779 million, equity underwriting at $455 million, and debt underwriting at $407 million.
CEO Ted Pick said 2024 was "one of the strongest years in the firm's history," as Morgan Stanley reported record net revenue of $61.8 billion.
The outlook for 2025 is positive, Pick told analysts on a call Thursday. "Values in the M&A pipelines are the highest in seven years, and that is really encouraging. Some of this will depend on how things roll out in the first couple months of the incoming administration and how things feel on a cross-border basis, but the pent-up activity that we're seeing is starting to release," he said.
Morgan Stanley’s deal pipeline is “the strongest it’s been in 5 to 10 years, maybe even longer,” Pick said.
Bank of America
Investment banking fees grew 44% to $1.7 billion.
Citigroup
Investment banking fees rose 35% to $925 million.
Wells Fargo
Investment banking fees jumped 59% to $725 million in the fourth quarter, driven by increased activity in equity and debt capital markets and higher advisory fees.
"We feel optimistic about where we are going into 2025 both because of where the economy is and the strength that has existed, as well as the business-friendly approach from the incoming administration," CEO Charlie Scharf told analysts.
"There's a sense of optimism that people have for the activity levels that we should see in 2025 - that obviously needs to translate into actual deal activity," Chief Financial Officer Michael Santomassimo said. "Market participants feel more confident in their ability to execute on M&A."
