Goldman Sachs and Morgan Stanley reported double-digit profit increases in the fourth quarter, as a surging stock market and strong deal making helped boost the results for the two biggest Wall Street investment banks.
Goldman Sachs said its net earnings rose 12% from a year earlier to $4.62 billion, or $14.01 a share. Morgan Stanley said it earned $4.4 billion, or $2.68 per share, compared with a profit of $3.71 billion, or $2.22 per share, in the year-ago period.
The AP report said Wall Street has been bolstered by the Trump administration’s deregulatory policies, which it said has led corporations to seek mergers and acquisitions. It also pointed to investor interest in artificial intelligence companies and those positioned to benefit from mass adoption of technologies like ChatGPT.
Both banks also reported stronger investment-banking results, including higher fee income and expanding deal pipelines. Goldman said its fourth-quarter investment fee revenues were up 25% year-over-year, and it described a higher investment fee backlog as a signal of additional deal making still pending that the banks are working on.
Morgan Stanley reported that its investment banking division revenue jumped 47% and said its investment fee backlog increased significantly in the fourth quarter as well.
The AP said the two banks’ results reflected similarly strong earnings from other large banks reporting that week. It reported that JPMorgan Chase, Bank of America and Citigroup all saw jumps in fourth-quarter profits, while describing their results as dampened by tensions between Wall Street and the White House over the Federal Reserve’s independence and President Donald Trump’s interest in capping credit card interest rates at 10%.
The report also said Goldman Sachs agreed to sell off its Apple Card credit card portfolio to JPMorgan Chase last week, effectively exiting what it called Goldman’s brief experiment in consumer banking. The AP said the portfolio was sold at a discount to JPMorgan.
This story has been corrected to show that Morgan Stanley’s investment banking revenues rose 47%, not 22%.