JPMorgan Chase and Goldman Sachs reaped the benefits of a return in dealmaking, with fees from investment banking adding to another strong quarter for Wall Street’s traders.
The two biggest US investment banks both beat analysts’ expectations in the third quarter, with a 12 per cent rise in profits for JPMorgan across the bank, and a 37 per cent increase for Goldman.
Bankers have been waiting for a return in mergers and acquisitions since the start of the year. Wall Street had anticipated that the Trump administration would unleash a tide of dealmaking, but that has taken longer than expected to arrive.
Goldman showed how strong its advisory franchise can be when the conditions are favourable, with a 60 per cent increase in revenues that powered gains in the wider investment banking business.
At JPMorgan, it was arguably the markets business that was the standout, with a record third quarter thanks to demand for financing, one of the bank’s traditional strengths.
Banks’ markets businesses have boomed throughout the past year, with US policy decisions helping to elevate volatility and create trading opportunities.
Wells Fargo also topped expectations, with investment banking revenues up 32 per cent. At Citigroup, investment banking fees rose 17 per cent.