Wall Street banking executives are forecasting that the strong momentum in investment banking profits observed in the third quarter will continue through the remainder of 2025, driven by resurgent mergers and acquisitions (M&A) and heightened activity in equity capital markets and IPOs.
Strong Investment Banking Performance
The third quarter marked a remarkable rebound for U.S. banking giants:
- Goldman Sachs (GS.N) reported a 42% jump in investment banking revenue
- JPMorgan Chase (JPM.N) saw a 16% increase in fees
- Wells Fargo (WFC.N) and Citigroup (C.N) also posted solid investment banking performance
Wells Fargo CFO Mike Santomassimo noted,
“Pipelines look good, the activity levels are good, and the conversations are constructive with clients.”
JPMorgan’s Jeremy Barnum added that the bank experienced its busiest summer for M&A in years, with strong momentum expected to continue into the fourth quarter.
Record Investment Banking Fees
Global investment banking fees reached a four-year high in the first nine months of 2025, supporting strong earnings across major banks.
- Worldwide fees totaled $99.4 billion, the highest since 2021
- M&A fees surged in technology (+55%) and financial (+34%) sectors
- Megadeals, such as Electronic Arts’ $55 billion acquisition, exemplify the return of large-scale transactions
Portfolio manager Macrae Sykes from Gabelli Funds emphasized:
“Momentum continues across the majority of business lines, with Wall Street remaining strong and demand for consumer loans very resilient.”
Drivers of the Deal-Making Rebound
Several factors contributed to the surge in U.S. investment banking activity:
- Lower interest rates, stimulating corporate borrowing and refinancing
- Deregulation under the Trump administration, reducing barriers for complex financial transactions
- Stocks at historical highs, encouraging corporate mergers, acquisitions, and IPOs
- Easing of trade tensions, which had previously slowed global deal-making
The $55 billion Electronic Arts buyout by Silver Lake, Saudi Arabia’s Public Investment Fund, and Affinity Partners represented the largest leveraged buyout in history, highlighting the scale of renewed M&A activity.
Global M&A Trends
- Third-quarter global M&A volumes surged 40% year-on-year, according to Dealogic
- Megadeals dominated the value of deals, though the total number of deals declined 16% to 8,912, marking the weakest third-quarter deal volume in 20 years
- U.S. government involvement in strategic sectors has also spurred additional transactions across up to 30 industries deemed critical to national security
Leading U.S. banks’ market share in investment banking fees year-to-date 2025:
| Bank | YTD Fees ($B) | Market Share (%) | 2024 Rank | YTD 2024 ($B) |
|---|---|---|---|---|
| JPMorgan | 7.7 | 1 | 7.8 | 1 |
| Goldman Sachs | 6.3 | 2 | 6.1 | 2 |
| Morgan Stanley | 5.2 | 4 | 4.8 | 4 |
| Bank of America | 5.0 | 3 | 5.5 | 3 |
| Citi | 4.2 | 5 | 3.9 | 5 |
| Barclays | 2.7 | 6 | 2.9 | 6 |
| Wells Fargo | 2.5 | 7 | 2.3 | 7 |
Outlook for 2025 and Beyond
Bank executives remain optimistic about sustained activity, citing strong pipelines, high corporate confidence, and favorable market conditions. While trade tensions and geopolitical uncertainty persist, the combination of regulatory easing, high equity valuations, and robust deal pipelines is expected to keep investment banking revenues elevated for the remainder of the year.
The rebound in deal-making also coincides with executive talent mobility, as senior bankers seek opportunities to capitalize on a busy M&A environment.
Conclusion
U.S. banking giants are entering the final quarter of 2025 in a strong position, fueled by record M&A activity, megadeals, and equity capital market momentum. While challenges remain, Wall Street’s focus on advisory fees, underwriting, and strategic transactions underscores a resilient and lucrative investment banking landscape.
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