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JPM, GS & Others Witness Record Q3 IB Fees: Will the Trend Continue?

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Key Takeaways

  • Major U.S. banks saw strong Q3 IB revenue growth across advisory and capital markets.
  • Executives highlighted robust deal pipelines and improving M&A sentiment through 2025.
  • Management cautioned that sustained IB growth depends on stable rates and macro conditions.

Recently, major U.S. banks reported their third-quarter results, showing a surge in investment banking (IB) revenues across the board. This marks the second consecutive quarter of improvement, reinforcing signs that dealmaking is finally reviving after a prolonged slowdown since the pandemic days.

Goldman Sachs (GS - Free Report) , JPMorgan (JPM - Free Report) , Morgan Stanley (MS - Free Report) , Bank of America (BAC - Free Report) and Citigroup (C - Free Report) have all reported strong IB income, with double-digit year-over-year growth.

Global mergers and acquisitions (M&As) in the third quarter of 2025 were impressive, rebounding from the lows recorded in April and May following President Donald Trump’s announcement of sweeping tariffs. As corporates adapted to the rapidly evolving geopolitical and macroeconomic scenarios, deal-making activity picked up. They took advantage of a strong U.S. economy, optimism over potential Federal Reserve interest rate cuts and a more accommodating regulatory environment under Trump.

Inside the Q3 IB Surge

Goldman Sachs: Driven by higher advisory revenues, signifying a substantial rise in M&A volumes, GS’ IB fee revenues totaled $2.7 billion, up 42.5% from the prior year quarter and 21.3% sequentially.

David Solomon, chairman and CEO of Goldman, highlighted improvements in M&A throughout the year and expects the constructive environment to persist through the end of 2025, with even stronger M&A activity anticipated in 2026 amid a favorable backdrop.

JPMorgan: IB fees rose to $2.6 billion, implying a 17.1% year-over-year growth and a 4.5% increase from the prior quarter. This was driven by improvements in advisory and underwriting businesses. Jeremy Barnum, executive VP and chief financial officer (CFO) of JPMorgan, noted healthy deal flow with robust pipelines, supported by a constructive market environment.

Morgan Stanley: Riding on a frenzy of deal-making activities and IPOs, IB revenues reached $2.1 billion, up 44.1% from the prior-year quarter and 36.9% sequentially.

Ted Pick, chairman and CEO of Morgan Stanley, said the rebound in the operating environment enabled strategic M&A and renewed financing activity. While he remained cautious, remarking that “whether we are entering a golden age of investment banking remains to be seen,” he affirmed that IB activity should trend upward over the next couple of years.

Bank of America: IB fees came in at $2.0 billion, up 43.5% year over year and 41% from the prior quarter on the back of higher advisory and underwriting income. Alastair Borthwick, executive VP and CFO of Bank of America, stated that the firm has a strong pipeline and the current environment remains favorable for M&A. He also pointed to significant investments made in the IB franchise over the past year as part of its growth strategy, which have been supporting the business.

Citigroup: An uptick in advisory revenues and growth in equity capital markets (ECM) and debt capital markets (DCM) drove C’s IB fees to $1.2 billion, up 17% year over year and 10.5% sequentially.

Jane Fraser, director & CEO of Citigroup, underscored the ongoing momentum across sectors, growth in corporate lending, share gains among financial sponsors and rising sell-side activity.

The Road Ahead for the IB Business

Underwriting and M&A activity currently exhibit strong momentum, as reflected in results across major banks and management’s optimistic tone regarding the current backdrop. However, dealmaking remains highly sensitive to macroeconomic conditions and is inherently cyclical. It therefore remains to be seen whether this resurgence will sustain through the coming quarters.

Nonetheless, management commentary across banks suggests that as clarity around trade, tariffs and taxes improves, IB pipelines are expected to remain robust over the next couple of years.

With deal pipelines strengthening and business sentiment improving, IB revenues could remain a key driver for large-cap U.S. banks in the near term. However, sustained momentum will depend on rate stability and market confidence.

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