NEW YORK — Goldman Sachs and Morgan Stanley reported double-digit fourth-quarter profit increases Wednesday, as a rising stock market and a rebound in corporate deal-making drove strong results at both Wall Street investment banks.
Goldman Sachs posted net earnings of $4.62 billion, or $14.01 per share, a 12% increase from a year earlier. Morgan Stanley earned $4.4 billion, or $2.68 per share, compared with $3.71 billion, or $2.22 per share, in the fourth quarter of 2024.
The results cap a strong earnings week for the largest U.S. banks, underpinned by deregulatory expectations from the Trump administration and sustained investor appetite for artificial intelligence companies — dynamics that fueled a surge in deal-making fees across Wall Street.
Investment banking drives the gains
Investment banking revenues powered much of the growth at both institutions. Goldman Sachs said fourth-quarter investment fee revenues rose 25% year-over-year. Morgan Stanley reported a 47% jump in its investment banking division’s revenues.
Both banks said deal-making backlogs — a measure of transactions under active work that have not yet closed — grew significantly during the quarter, a signal of continued activity in the months ahead.
Wall Street has been buoyed by the Trump administration’s deregulatory stance, which has encouraged corporations to pursue mergers and acquisitions, according to the Associated Press. Investor enthusiasm for artificial intelligence companies and those positioned to benefit from the mass adoption of technologies such as ChatGPT has also driven equity markets higher. The NASDAQ Composite, a technology-heavy benchmark, stood at 23,530 on January 15.
Broader bank earnings picture
The Goldman and Morgan Stanley results closed out a strong week of earnings from the largest U.S. financial institutions. JPMorgan Chase, Bank of America and Citigroup also reported fourth-quarter profit increases.
Those results were tempered, however, by tensions between Wall Street and the White House over the independence of the Federal Reserve and President Donald Trump’s stated interest in capping credit card interest rates at 10%, the Associated Press reported.
Goldman exits consumer banking
Goldman Sachs also announced last week that it agreed to sell its Apple Card credit card portfolio to JPMorgan Chase at a discount, effectively ending the bank’s experiment in consumer banking. The below-market sale price reflected Goldman’s urgency to move past the Apple Card business, according to the Associated Press.