Wall Street banks' fourth-quarter earnings in five charts

• Interest income rose across major banks as commercial loans and credit card balances grew, though Trump's proposed credit card rate cap drew sharp pushback from executives warning it would restrict credit access
• Global investment banking revenues exceeded $100 billion in 2025 as M&A activity surged, with bankers optimistic about continued momentum as antitrust pressures ease
• Trading desks capitalized on market volatility with equity trading showing particularly strong gains driven by increased use of leverage and options products

Wall Street Banks' Q4 Earnings Summary

Overall Performance: Major U.S. banks closed 2025 with strong fourth-quarter results, though Trump's proposed credit card interest rate cap introduced market uncertainty.

Key Trends:

Consumer Banking:

• Interest income rose across major banks, driven by healthy loan growth and declining deposit costs
• Commercial and industrial loans and credit card balances increased despite elevated interest rates
• Credit quality improved, with most banks reporting lower charge-offs (debt unlikely to be repaid)
• Credit cards remain highly profitable products due to unsecured debt carrying premium rates

Investment Banking:

• M&A activity rebounded in 2025, pushing global investment banking revenues above $100 billion (Dealogic data)
• Bankers optimistic for 2026 as antitrust pressures ease, markets near record levels, and economy stays resilient
• High-profile IPOs and major deals expected to sustain momentum

Trading:

• Strong performance from market volatility, with banks capitalizing on client portfolio rebalancing and increased proprietary trading
• Equity trading revenues particularly robust, driven by leverage and options activity
• Surge in demand for volatility protection products
• Continued volatility expected in 2026 amid AI stock bubble concerns, stretched valuations, and Federal Reserve policy uncertainty

Market Outlook:

Industry executives warn Trump's proposed credit card rate cap would restrict credit availability and harm the economy. Despite this, analysts remain bullish on major banks, citing stable economy, resilient labor market, and continued consumer spending.

Analyst Perspective: "Overall, we are bullish on the big banks," said Brian Mulberry of Zacks Investment Management, highlighting economic stability and steady consumer activity as key supporting factors.