Wall Street delivered stronger than expected capital markets results for the fourth quarter, setting the stage for a solid 2025, says Morningstar DBRS Inc.<\/p>\n
In a report published Friday, the rating agency noted that the large Wall Street banks \u2014 JP Morgan Chase & Co., Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley \u2014 beat expectations for their capital markets businesses in their latest quarterly earnings, due to still-strong trading and a rebound in investment banking.<\/p>\n
For the latest quarter, the banks’ aggregate net revenues were up 14% on a year-over-year basis, and are now 37% higher than their pre-pandemic levels from 2019, DBRS reported.<\/p>\n
On average, net revenues from investment banking rose 35% year over year, reflecting underlying strength, “particularly in equity underwriting, where higher equity markets supported strong follow-on and IPO issuance,” the report noted.<\/p>\n
Similarly, net revenues from the banks’ sales and trading businesses were up strongly, rising 28% year over year on the equity side, and 27% in fixed income.<\/p>\n
Equity revenues were supported by “strength in cash products and higher average balances in prime brokerage,” DBRS said, while fixed-income revenues were driven by strength in credit products and currencies.<\/p>\n
For each of the banks, “net revenues were at or close to record-setting levels,” DBRS noted.<\/p>\n
Looking ahead, investment banking is expected to remain strong in 2025 amid growing economic optimism, the report said.<\/p>\n
“Indeed, backlogs improved sequentially and remain robust, particularly in [mergers and acquisitions], where pipelines have reached their highest level in nearly a decade,” DBRS said.<\/p>\n
“As always, trading revenues are a wildcard, but the potential for follow-on trading opportunities resulting from increased investment banking activity would likely benefit results,” it added.<\/p>\n","protected":false},"excerpt":{"rendered":"
Investment banking pipeline looks healthy, trading activity should benefit too<\/p>\n","protected":false},"author":147314,"featured_media":495083,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2313,2312],"tags":[2620,2326,2347,2700,102330,87171,2361,2395],"yst_prominent_words":[10925,5068,5183,5189,6014,6793,7257,9982,1385,11415,13660,16582,17567,17647,17648,18865,14,2257,1825],"acf":[],"_links":{"self":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/500972"}],"collection":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/users\/147314"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/comments?post=500972"}],"version-history":[{"count":4,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/500972\/revisions"}],"predecessor-version":[{"id":500991,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/500972\/revisions\/500991"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media\/495083"}],"wp:attachment":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media?parent=500972"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/categories?post=500972"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/tags?post=500972"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/yst_prominent_words?post=500972"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}