Wall Street’s largest banks concluded 2025 with robust performance, and executives voiced optimism for the coming year, despite concerns surrounding U.S. President Donald Trump’s proposed cap on credit card interest rates. Analysts anticipate that high-profile IPOs and substantial deals will continue to drive investment banking momentum, while ongoing market volatility is expected to maintain strong trading activity.
Interest income, a key indicator of lending profitability, increased across major banks, supported by healthy loan growth and reduced deposit costs. Commercial and industrial loans, along with credit card balances, saw slight increases during the quarter, indicating sustained borrowing demand despite elevated interest rates. However, Trump’s proposal to cap credit card interest rates at 10% has faced strong opposition from the industry. Executives warn that such a measure would restrict credit availability for everyday Americans and negatively impact the economy. Credit cards are significant sources of revenue for banks since the debt is unsecured and can charge high interest rates.
Mergers and acquisitions experienced a strong rebound in 2025, pushing global investment banking revenues above $100 billion, according to Dealogic data. Bankers are optimistic about another strong year, citing easing antitrust headwinds, markets near record levels, and a resilient U.S. economy. Banks capitalised on market fluctuations, generating revenue from client portfolio rebalancing and increased proprietary trading. Many also benefited from a surge in demand for products that protect against market swings.
Brian Mulberry, senior client portfolio manager at Zacks Investment Management, noted that equity trading revenues have been a key driver of earnings, with strong gains in the use of leverage and options. Volatility is expected to persist in 2026 due to concerns about stretched valuations, a potential bubble in AI stocks, and uncertainty regarding the Federal Reserve’s policy path. Mulberry added, “Overall, we are bullish on the big banks as the economy remains stable…and with stable prices, consumers are still spending.”
