Wall Street Roars Back to Life
The fourth-quarter 2024 earnings reports from Bank of America and Morgan Stanley have sent a clear message: the Wall Street revival is in full swing. With profits more than doubling, dealmakers are optimistic about the prospects for 2025 under the new Trump administration.
A Banner Year for Banks
The six major US banks that have reported earnings so far this week have collectively raked in a staggering $36 billion in the fourth quarter, with a total of $145.7 billion for all of 2024. This represents a 19% increase from 2023 and more than double their collective profits in the fourth quarter of the same year.
Bank of America and Morgan Stanley Lead the Charge
Bank of America CEO Brian Moynihan hailed the strong fourth quarter, saying it sets up 2025 “very well” for the bank. Morgan Stanley CEO Ted Pick echoed this sentiment, calling it “an excellent fourth quarter” that capped off one of the strongest years in the firm’s history.
Deal-Making and Trading Surge
Both banks demonstrated a significant rebound in deal-making, which had been in a two-year slump. Trading also surged, driven by volatility surrounding the US presidential election. Bank of America’s investment banking fees rose 44%, while sales and trading revenue jumped 13% to $4.1 billion, a record for the full year. Morgan Stanley’s investment banking revenue rose 25% to $1.64 billion.
JPMorgan Stands Tall
JPMorgan emerged as the clear winner, churning out more annual profits than ever before. Its full-year profits rose to a record $58 billion, the most in the history of American banking. This was more than double the haul of its next closest rival, Bank of America.
Goldman and Wells Fargo Also Shine
Goldman Sachs saw its earnings in the fourth quarter jump 105% to $4.1 billion, with full-year profits rising 68% to $14.2 billion. Its investment banking fees in the fourth quarter were up 24%. Even Wells Fargo, known for its consumer operations, turned in a strong Wall Street performance, with investment banking fees increasing 59% in the fourth quarter.
A Bright Future Ahead?
Many bankers are hopeful that the deal-making revival will continue in 2025, buoyed by the GOP takeover in Washington. The Trump administration is expected to relax rules and apply more leniency in approving corporate mergers, which could further boost industry profits. With big bank stocks rallying following the election, the future looks bright for Wall Street.
Leave a Reply