What’s Driving Investment Banking Into 2026: Key Trends in M&A, Revenue & Global Finance

The latest reports suggest a robust recovery in investment banking, especially for the largest U.S. firms. According to FT, JPMorgan, Goldman Sachs, Morgan Stanley, Bank of America, and Citigroup are expected to report ~US$10 billion in investment banking revenue for Q4 2025 alone, representing a year-over-year rise of 13%. Furthermore, full-year 2025 revenues for these firms may reach US$38 billion—some 50% above their combined revenues in 2023—matching or exceeding levels seen in 2021 before pandemic disruptions.

Goldman and Morgan Stanley are projected to see fee revenue growth of ~17% in 2025, with another ~11% in 2026. Their business models—more leveraged toward advisory, equity underwriting, and trading of tech/AI assets—position them to capture upside under a favorable macro backdrop. Global investment banking revenue, including all banks worldwide, is set to increase by around 10% in 2025 to roughly US$346 billion. Revenue growth is broad-based: equities trading (~15%), origination/advisory (~8%), and FICC (>8%) all contributing.

Still, optimism is tempered by several risks. JPMorgan expects investment banking revenues to rise only modestly (low single digits) in Q4 due to competition and economic uncertainty, while its expenses are forecasted to reach ~$105 billion in 2026, above analyst expectations. In addition, banks like Goldman may face stiff pressure from mark-to-market losses or margin erosion in equity investment portfolios. Regulatory relief in some jurisdictions may also tighten if economic indicators warn of overheating, and high market expectations raise the bar for performance.
Strategic capital allocation—between returning capital, reinvesting in growth (especially AI, technology, and emerging markets), and shoring up regulatory capital—is poised to distinguish winners in the coming cycle.

Emerging markets and regions like the Middle East and Africa are also contributing meaningfully, though from smaller bases. Firms are adding talent and investing in EMEA deal teams, while activity in Europe remains uneven. Mega-deals are more frequently dictating fee outcomes: Goldman Sachs alone accounted for ~32% of global M&A volume in 2025, advising on US$1.48 trillion in deals. As the pipeline for large transactions grows, smaller banks and those focused on more domestic or sectoral deals may lag in revenue growth.

Looking ahead to 2026, markets project stabilization or moderation: equities‐trading revenues may fall ~6%, FICC could edge down slightly, but origination and advisory are expected to continue rising, possibly ~9%. Whether 2025’s gains can be preserved will depend on capital markets conditions, interest rates, trade/regulatory policy, and no major global macro shocks. Excess capital deployment decisions and cost discipline will be essential with capital returns under scrutiny.