Goldman Sachs and JPMorgan Chase Post Soaring Profits

Major U.S. banks posted impressive profit gains in the fourth quarter, fueled by renewed optimism among corporate clients and a surge in dealmaking and trading activity. Net income rose 50% at JPMorgan Chase and more than doubled at Goldman Sachs, showcasing a robust rebound for Wall Street as businesses embraced economic confidence under the incoming Trump administration.

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Bankers reported a heightened demand for capital, driven by increased corporate activity and financing needs. Companies are investing heavily in areas like data centers and technology upgrades, supported by growing CEO confidence globally.

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“There’s no question that there’s a significant increase in optimism in the overall environment,” said Jeremy Barnum, JPMorgan’s finance chief. “We’re pleased to see greater optimism in C-suites across the country and globally in some sectors.”

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Fourth-Quarter Results

JPMorgan Chase reported a 47% jump in profit, reaching $14 billion, or $4.81 per share, as revenue climbed 11% to $42.77 billion. The bank achieved record performance in its payments and asset-management divisions.

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Goldman Sachs saw its profit more than double to $4.11 billion, or $11.95 per share, while revenue rose 23% to $13.87 billion.

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At Citigroup, profit rebounded to $2.86 billion, compared to a net loss of $1.84 billion a year ago. Meanwhile, Wells Fargo posted a 47% increase in profit, reporting $5.08 billion for the quarter.

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All four banks exceeded analysts’ expectations, supported in part by lower charges compared to the prior year. In 2023, banks had absorbed billions of dollars in special assessments by the Federal Deposit Insurance Corporation (FDIC) to replenish the deposit insurance fund after the regional banking crisis.

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Wall Street Reawakens

Wall Street experienced a resurgence in 2024 after two sluggish years, thanks to higher interest rates and global geopolitical shifts. Donald Trump’s election as U.S. president further energized markets, driving increased dealmaking and trading.

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JPMorgan’s investment-banking fees surged 49%, while trading revenue rose 21% amid heightened client demand to buy and sell stocks and bonds. Similarly, Goldman Sachs reported a 24% increase in investment-banking revenue, with equity and debt-underwriting revenues climbing 98% and 51%, respectively.

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According to Dealogic, global debt-underwriting volumes in 2024 reached their highest levels since 2020. Private-equity firms sought financing for acquisitions, while corporations borrowed to fund infrastructure and technology projects.

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Despite the strong quarter, JPMorgan’s consumer division saw profits fall 6% as tighter margins and competition for customer deposits impacted results. Deposits at the bank declined 3% year-over-year. However, the Chase credit-card and auto-lending businesses offset some of the pressure with a 14% revenue increase, supported by higher interest-bearing credit-card balances.

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The bank’s loan portfolio revealed some vulnerabilities, with net charge-offs—loans deemed uncollectible—rising 9% to $2.4 billion, largely due to its card business.

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In contrast, JPMorgan’s payments business achieved record revenue of $18.09 billion for the year. CEO Jamie Dimon has focused heavily on growing this segment, which he views as a potential disruptor to companies like Visa and Mastercard.

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Dimon’s Outlook

While acknowledging the strong quarter, Dimon expressed caution about the future.

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“Ongoing and future spending requirements will likely be inflationary, and therefore, inflation may persist for some time,” he said. “Additionally, geopolitical conditions remain the most dangerous and complicated since World War II.”

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However, Dimon praised the recent rollback of certain banking regulations, including higher capital requirements proposed during the Biden administration. He emphasized the need for fair and transparent regulations that promote economic growth while maintaining a safe financial system.

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“This is not about weakening regulation but about setting rules that are transparent, fair, and holistic in their approach,” he said.

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Goldman Sachs’ Highlights

Goldman Sachs also benefited from the revived market activity, reporting strong gains in its equity and debt-underwriting businesses. Investment-banking revenue rose to $2.05 billion, while the firm capitalized on robust demand for financing and trading solutions.

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The Road Ahead

While challenges such as inflationary pressures and geopolitical risks remain, the strong earnings from major banks signal renewed momentum in the financial sector. With corporate clients increasingly optimistic and markets rebounding, banks like JPMorgan and Goldman Sachs are positioned to navigate 2025 with confidence.

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The robust performance of these institutions underscores the broader recovery on Wall Street, driven by heightened deal activity, trading volumes, and corporate investment. For now, optimism reigns, though careful monitoring of economic and geopolitical factors will be critical in the year ahead.

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