America’s 6 Biggest Banks to Report $31 Billion in Profits

America’s biggest banks apparently have Donald Trump to thank for a successful quarter.

Banking giants are set to report $31 billion in profits for the last three months of last year, fueled by a surge in trading and dealmaking following the U.S. presidential election, the Financial Times (FT) reported Monday (Jan. 13).

According to the report, earnings for the six largest U.S. banks in terms of assets — JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley — are projected to have risen 16% compared to the closing quarter of 2023.

That’s after excluding close to $10 billion the banks made to the federal deposit insurance fund near the end of 2023 to cover the costs of the collapse of three regional banks earlier in the year, the report said, citing data from Bloomberg.

“It was a very strong end of the year for capital markets,” said Scott Siefers, a banking analyst at Piper Sandler.

“As it relates to [profit] margins, we are in a Goldilocks situation, where banks are benefiting from higher rates at the long-end of the curve, but have been able to take down deposit costs with the Fed [cuts].”

The report notes that investors are hoping that reduced taxes and relaxed regulations under the second Trump administration can boost loan growth across the banking sector. They are also counting on a continuing uptick in advisory fees at the biggest banks investment offices, as mergers and acquisitions receive lighter scrutiny.

Reduced regulatory requirements for the banks themselves may give them the ability to either take more risk or boost shareholder payouts through buybacks or dividends, both of which would boost investor returns.

At the same time, the FT said, bank analysts warn that Trump policies such as tariffs could drive up inflation and leave short-term rates higher for longer than projected months ago. As PYMNTS wrote late last year, this year seems “more like a wild card” when it comes to questions of financial regulations.

“President-elect Donald Trump’s administration appears set to follow a course of deregulation, and there’s speculation that entire regulator bodies might be shut down, which would indeed be a radical shift,” that report said.

“In the meantime, however, the underlying issues are still there, and key among them will be examinations of the risks and rewards inherent in bank-FinTech partnerships, cybersecurity, capital requirements and innovation.”

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