(Yahoo! Finance) - America's biggest banks are ending 2025 with their stock prices at record highs, more assets on their balance sheet, and a level of regulatory freedom they haven't seen in 15 years.
In the years ahead, the industry and its top firms plan to turn that momentum into a growth story.
Bank of America (BAC), the nation's second-largest bank, saw its stock hit a record high in December, finally surpassing its pre-crisis peak reached in 2006.
Shares of JPMorgan Chase (JPM) and Wells Fargo (WFC), the nation's largest and fourth-largest banks, respectively, are trading at record highs. Citigroup's (C) stock surpassed the net worth of its assets — known as its book value per share — for the first time in seven years. Citi shares remain 80% lower than their peak reached in 2000.
A key index (^BKX) tracking these banks, along with 20 of the country's other largest lenders, has climbed 29% year to date, outperforming the S&P 500 (^GSPC) by 13%.
"This is certainly more upside than we had expected at the start of the year," said Wells Fargo analyst Mike Mayo. "Big banks will outperform again in 2026," Mayo added.
Wall Street has been a major growth engine for these banks, with merger momentum and market volatility in 2025 spurring a surge in fees from their investment banking and trading divisions.
Global investment banking volume for the year is on pace to climb 10% from 2024 to its highest level since 2021, according to Dealogic, despite tariff-related swings this spring that froze capital markets and IPO delays as a result of the government shutdown in the fall. With the exception of Wells Fargo, analysts expect trading fees at all of these banks, along with Goldman Sachs (GS) and Morgan Stanley (MS), to hit record highs this year.
Banking analysts also expect net income across these four firms to reach a record high.
At an industry conference hosted by Goldman Sachs (GS) this month, executives from these firms signaled plans to expand their empires in 2026.
"Global economies at large have generally been resilient despite continued bouts of uncertainty," Citigroup CFO Mark Mason said. "The capital markets are wide open to some extent."
Bank of America, which last month shared its growth ambitions with investors for the first time in nearly 15 years, is looking to lean deeper into cross-selling products between its consumer and wealth divisions by bolstering financial adviser recruitment and its brick-and-mortar branch network.
"We're not just trying to sell things. We're trying to sell stuff that sticks [to] the ribs," Bank of America CEO Brian Moynihan said.
Wells Fargo is also looking to grow virtually all of its businesses with the exception of home lending after regulators loosened rules earlier this year that restricted the firm's growth, finally ending the overhang from its fake-accounts scandal in 2016.
The bank's total assets rose above $2 trillion in the third quarter, a threshold that would have been unthinkable under its prior restrictions.
"As we look forward to the future, it's an incredibly exciting time for us," Wells Fargo CEO Charlie Scharf said.
Earlier this fall, Moynihan and Scharf set more ambitious profit targets for their banks, using a measure known as return on tangible common equity (ROTCE). Over the medium term, BofA is shooting for a ROTCE of 16%-18%, while Wells Fargo has its sights on a narrower but higher range of 17%-18%.
Meanwhile, JPMorgan's market capitalization has swelled by $200 billion since the start of 2025, bringing it closer to becoming the world's first bank with a trillion-dollar valuation. Since 2019, it has promised investors a 17% ROTCE through the entire business cycle.
JPMorgan is looking to add close to $10 billion more in expenses next year to fuel priorities in credit cards and branches, along with strategic investments in compensation and AI.
Marianne Lake, CEO of the bank's consumer and community banking division, said at an industry event in December, "It's been great to be a growth franchise in a world where maybe some others were in a retreating mode."
"Competition is healthy ... so, bring it on," she added.
Regionals go national
It's not just the country's four biggest lenders that are eyeing growth plans next year, as the Trump administration's broader deregulatory push across financial services has given lenders more excess capital and an easier process for doing mergers.
Goldman analysts estimate that by the end of next year, policy changes from the second Trump administration's first year in power will give US banks between $180 billion and $200 billion in excess capital.
Some of that money can be used to scoop up rivals, enter new business lines, or deepen investments in growing parts of the business. Along with higher stock valuations, improved securities portfolios, and fear of being crushed by the scale of their larger rivals, the moment has sparked a string of mergers that isn't expected to slow down in the year ahead.
In October, Cincinnati-based Fifth Third Bank (FITB) and Columbus, Ohio-based Huntington Bancshares (HBAN) each announced deals to acquire smaller regional banks.
Fifth Third said it would acquire Dallas-based Comerica (CMA) in an $11 billion deal, while Huntington said it would buy Cadence Bank (CADE), headquartered in both Tupelo, Miss., and Houston, for $7.4 billion. Its larger Rust Belt rival, Pittsburgh-based PNC Financial (PNC), struck a $4.1 billion deal in September to acquire Colorado-based FirstBank.
"If you want the economy to grow faster, somebody needs to finance it," Goldman Sachs analyst Richard Ramsden said in an interview in December.
For the first time in years, he said, "everyone is saying, 'Look, we need to go back and just think through our growth plans and our growth appetite.'"
By David Hollerith - Senior Reporter
