Goldman Sachs announced a stronger-than-expected profit for the fourth quarter, alongside record annual revenue in its investment banking and markets division. The bank attributed this performance to a surge in corporate deals and borrowing activity.
Profit increased 12% to $4.62 billion in the quarter, equivalent to $14.01 per share. Revenue fell 3% to $13.45 billion, partly due to a one-time reduction from the bank's agreement to transfer its Apple credit-card program to JPMorgan Chase. This transaction added 46 cents per share to fourth-quarter earnings.
Morgan Stanley also reported better-than-expected profit and revenue in the fourth quarter, benefiting from heightened dealmaking. Its investment-banking revenue jumped 47%, while wealth-management revenue, accounting for about half of total revenue, rose 13%.
Goldman said on Thursday it is raising its quarterly dividend by 50 cents to $4.50. The bank set new targets for its asset and wealth-management business, aiming for returns in the high teens rather than midteens.
Investment-banking revenue at Goldman rose 25% in the fourth quarter from a year ago, driven by advisory fees and debt underwriting. Trading revenue increased 19%, supported by lending to hedge funds and institutional clients. The firm reported record revenue from equities financing for the quarter and full year.
Goldman also posted record revenues from FICC financing, which includes lending such as capital call loans to investment firms and warehouse financing to mortgage lenders.
At Morgan Stanley, revenue from fixed-income underwriting surged 93% in the fourth quarter, contributing to the firm's rise in investment-banking fees.
Industrywide, dealmaking numbers are approaching all-time highs. Globally, merger and acquisition activity increased 44% in 2025 from a year earlier, with private-equity firms returning to dealmaking. Debt underwriting activity in 2025 surpassed the sector's 2020 high, according to Dealogic.
Wall Street's momentum continues, fueled by a booming stock market and increased corporate interest in mergers and public offerings. Banks are preparing for what could be a record year for IPOs, with companies like SpaceX and Anthropic considering listings. The rise in mergers and acquisitions is also boosting lending activity, with big banks increasing loans to support artificial-intelligence investments and infrastructure projects.