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Donald Trump’s return to the White House could fuel a blockbuster 2025 on Wall Street, but worries over inflationary policy and global tensions lingered, with major U.S. banks saying they posted bumper quarterly earnings.
Top executives from several of Wall Street’s biggest Bank Offered on Wednesday Enthusiastic view for this year, particularly for their investment banking business, which has seen revenue growth in recent months.
The cautiously optimistic sentiment highlights how many US executives hope the president-elect’s promises to boost growth and cut regulations will be a boon for their businesses even as they worry about his sometimes erratic policymaking.
CEO of Goldman Sachs David Solomon Wednesday said: “There has been a meaningful shift in CEO confidence, especially after the US election results. In addition, there are . . Overall increased appetite to do deals supported by an improved regulatory backdrop.”
“The combination of these conditions will spur more activity in 2025,” he added.
BNY chief executive Robin Vince added: “The incoming Trump administration has made it clear that they are pro-growth. . . . If that pro-growth translates into action, which obviously we hope it will, we think it will be a good final backdrop.” “
The stimulus ranges from mergers and acquisitions to debt issuance and plans to float more companies on public markets, bankers said.
JPMorgan Chief Financial Officer Jeremy Barnum said the U.S. is in a “spirit moment . . . We’re happy to see more optimism in the country’s C-suite and some pockets globally.”
The banks’ expectations for a stronger 2025 came as they reported a significant increase in earnings for the final quarter of last year: JPMorgan’s net income rose 50 per cent to $14bn, while Goldman’s doubled to $4.1bn. Citi made a profit of $2.9bn in the last quarter of 2023, up from a loss of $1.8bn.
Citi shares jumped 7 percent, Goldman rose 5 percent and JPMorgan gained more than 1 percent after the results were released.
Banks benefited from a sharp increase in trading in equities before and after Trump’s victory in the November election. His win sent stocks soaring, though markets gave up a significant portion of those gains.
Investment banking It also excels with companies tapping into gross market conditions to raise funds through the sale of stocks and bonds. A return to M&A activity has also provided a boost.
Even Wells Fargo, which makes the bulk of its revenue from consumer and corporate businesses, reported substantial growth from investment banking.
A significant payment to replenish the Federal Deposit Insurance Fund, which dragged down profits in the final quarter of 2023, also weighed on overall net profit compared year-over-year.
Despite the strong showing, top financiers also warned that enthusiasm could be dented by economic shocks caused by a geopolitical crisis or rapid government policy changes under Trump, who took an often unpredictable path during his first term in office from 2017 to 2021.
“The geopolitical environment remains the most dangerous and complex since World War II,” JPMorgan CEO Jamie Dimon warned.
Trump has not only promised mass deportations of illegal immigrants and massive tariffs, but has also contemplated seizing Greenland and the Panama Canal, among other things.
“It’s a complicated world and I think we should all be on our toes and be prepared for the unexpected,” Solomon said. “When you look broadly across immigration policy, trade policy, tax policy, energy policy, there is uncertainty. . . There are different results.”
A return to high inflation could also dampen markets, pressure corporate earnings and dry up dealmaking, they warned.
BlackRock CEO Larry Fink told CNBC: “I think the economy is in very good shape. That being said, is it in very good shape? Are we going to start seeing higher inflationary pressures? We’ll see.”
The world’s largest money manager said it attracted record new money in the second half of 2024.
Additional reporting by Zehra Munir in New York and Harriet Agnew in London
