- Top U.S. banks are on pace for their strongest investment-banking year since 2021, with 2025 fees projected near $38B versus about $25B in 2023.
- Q4 2025 investment-banking revenue for JPMorgan, Goldman Sachs, Morgan Stanley, Bank of America, and Citigroup is expected to be nearly $10B, up roughly 13% year over year.
- Goldman Sachs and Morgan Stanley are forecast to lead fee growth, rising about 17% in 2025 and another ~11% in 2026 due to heavier reliance on advisory and underwriting.
- Momentum is driven by a reviving M&A and capital-markets pipeline and easier regulation, though shocks or delays could curb deal flow.
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The investment banking sector is showing real momentum in 2025. According to recent data, the five biggest U.S. IB‐focused banks—JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America, and Citigroup—are on track to generate nearly $10 billion in fees in Q4, representing a ~13% increase over Q4 2024. If these trends persist, full-year fee income for 2025 could reach ~$38 billion, the best result since 2021 and dramatically above the ~$25 billion low observed in 2023.
Goldman Sachs and Morgan Stanley stand out. Their exposure to M&A advisory, underwriting, and equity/debt capital market activity positions them to outperform peers in terms of fee growth—an estimated ~17% rise in 2025, followed by another ~11% in 2026. Banks with more diversified revenue bases are benefiting too, but the leverage to fee income is greatest at those more concentrated in advisory and underwriting businesses.
Several strategic implications follow. First, sustained tailwinds—strong IPO and SPAC pipelines, larger cross-border M&A deals, easing regulatory constraints—are likely to reinforce momentum. The quality of deal flow matters, as mega-transactions carry outsized fee yield. Goldman’s dominance in advising on large mega-deals (>$10 billion) supports this thesis.
However, risks remain. Market expectations are high; any underperformance could lead to sharp valuation adjustments. Delays in regulatory approvals, rate environments that stay volatile, or macro shocks (geopolitical, inflation, etc.) could disrupt deal-making. Moreover, while equity markets are supportive currently, any future decline will weaken underwriting activity. Finally, differences across firms matter: banks with heavy dependency on interest rates versus those more fee-dependent will fare differently as central bank policy evolves.
Open questions include: Can banks maintain momentum into mid-2026 if rate cuts are slower than expected? Will deal size mix (e.g., more mega-deals) continue to shift in favor of banks like Goldman with proven leadership? How sustainable is regulatory easing, and might political shifts reverse or alter it?
Supporting Notes
- Five biggest U.S. investment banks expected to report nearly $10 billion in IB revenue in Q4 2025, up ~13% YoY.
- Projected full-year 2025 IB fees of ~$38 billion versus ~$25 billion in 2023.
- Goldman Sachs and Morgan Stanley fees expected to rise by ~17% in 2025 and ~11% further in 2026.
- Goldman advised on ~$1.48 trillion in global M&A deals in 2025, securing ~$4.6 billion in advisory fees.
- In the first nine months of 2025, Goldman’s IB fees rose ~19% YoY; advisory fees rose ~31%; underwriting equity and debt up ~7% and ~11%, respectively.
- Morgan Stanley’s IB revenues grew ~15% YoY in the first nine months of 2025; JPMorgan’s grew ~12.3% in that period.
- Jefferies saw investment banking revenue up ~20.4% in Q4, with equity/debt underwriting surging notably, providing a microcosm for broader industry growth.