The six largest U.S. banks posted $142 billion in profits last year as they benefited from high interest rates, a strong economy and a rebound in deal-making and other activity on Wall Street.
JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley saw a 20 percent increase in their combined net income compared to 2023, according to FactSet data. It marked the second best year on record stretching back to 2007, the year before the global financial crisis reshaped the sector.
Chief executives of Wall Street giants offered upbeat forecasts for this year, hoping that the continued strength of the US economy and President-elect Donald Trump’s promises to cut regulation and boost growth will further boost their earnings.
“We ended 2024 with good momentum, and as we head into 2025, the economy is resilient and healthy,” said Brian Moynihan, BofA’s chief executive, after his bank released results on Thursday.
Major banks ended 2024 on a high note, with shares rising after November’s US election and bond market turmoil fueling divergence in their markets.
Trading revenues will reach $123 billion for the full year 2024, up 10 percent from 2023, according to calculations by the Financial Times. Investment banking fees rose 34 percent to $36 billion as deal-making activity picked up and firms launched equity and debt sales.
Continued consumer and corporate spending also boosted the bank’s credit card and payments divisions.
“There is a renewed sense of optimism,” said Jason Goldberg, banking industry analyst at Barclays in London. “Banks should see double-digit profit growth in 2025 and 2026.
The banks’ traditional credit operations, the source of most of their profits, recorded more stable results last year, reports SEEbiz. The six banks generated just over $250 billion in net interest income, which is usually the difference between the rate banks pay depositors and the rate they charge borrowers. The figure is high by historical standards, but little changed compared to 2023.
Even as banks continue to collect high interest on outstanding debt, high rates and economic uncertainty are discouraging many borrowers from taking on additional debt.
Loans outstanding at the nation’s largest bank, JPMorgan, rose less than 2 percent. At Wells Fargo, overall lending fell 2 percent.
“I wouldn’t count on overall credit growth,” said Mark Zandi, chief economist at Moody’s Analytics. “Consumers will come back.”
