(Yahoo! Finance) - Wall Street’s dealmaking boom didn’t slow at Goldman Sachs (GS) and Morgan Stanley (MS) in the fourth quarter, with both firms capping off one of the strongest years for the investment banking business since the pandemic.
Goldman reported fourth quarter net income of $4.6 billion, or $14.01 earnings per share, a 12% increase from a year ago. At Morgan Stanley, net income climbed 18% to $4.4 billion compared to the fourth quarter of last year, fueled by a 47% jump in dealmaking revenue.
2025 was a good year one for these Wall Street banks.
Along with putting its Apple Card headache in the rearview, Goldman notched its highest year ever in equity trading fees. Those fees from Goldman’s markets unit jumped 25% during the fourth quarter to $4.3 billion while total trading for the full-year rose 16% from 2024.
Full-year profits, dealmaking fees and net revenues also climbed to their second highest level ever, only second to a boom in 2021.
Goldman's standout M&A advisory business soared 41% to $1.36 billion compared to the fourth quarter of 2024, which was also roughly in line with analyst expectations. The bank also notched its highest year ever in equity trading fees. Those fees from Goldman’s markets unit jumped 23% during the fourth quarter to $4.3 billion while total trading for the full-year rose 16% from 2024.
Morgan Stanley posted record full-year net revenues and net income. Its equities trading unit also raked in fees surpassing all previous levels. Equity trading fees rose 10% in the fourth quarter and 28% for the full-year from 2024.
Revenue from Goldman’s dealmaking fees jumped 25% to $2.57 billion, in line with analyst expectations.
The dealmaking boom spread across Wall Street for most of 2025, but activity ebbed during the year's final quarter for some of these firms' top rivals
Shares of both firms fell in premarket trading on Thursday.
"We continue to see high levels of client engagement across our franchise and expect momentum to accelerate in 2026, activating a flywheel of activity across our entire firm," Goldman Sachs CEO David Solomon said in a statement.
“Our Institutional Securities business served as a trusted advisor to clients as investment banking activity accelerated and global markets remained strong,” Morgan Stanley CEO Ted Pick said in a statement.
On Tuesday, JPMorgan Chase said that investment banking fees tumbled 4% from the year ago period, missing expectations set by analysts and the bank itself in early December. JPMorgan CFO Jeremy Barnum said a contributing factor to the weaker dealmaking period included "the timing of some deals that were pushed to 2026."
"We're obviously optimistic on investment banking fees generally," Barnum said told analysts on Tuesday, while CEO Jamie Dimon added that competition in dealmaking was “like trench warfare.”
Investment banking fees rose 1% from the year ago period at Bank of America (BAC), with the Charlotte, North Carolina-based bank’s equity underwriting and merger advisory services seeing declines. That amount still exceeded the Street's expectations.
For Wells Fargo (WFC), fees fell 1% though the small but growing investment banking house still posted its highest revenue full-year dealmaking revenue ever.
Citigroup's (C) fourth quarter also brought a record. Revenue from its M&A advisory service soared 84% , bringing in the bank's best three months and full-year for that business, CEO Jane Fraser said Wednesday. That spurred the New York based bank's total dealmaking fees up 35% to $1.29 billion.
By David Hollerith - Senior Reporter
