Wall Street’s biggest banks posted record profits after Donald Trump’s election triumph triggered a US stock market trading frenzy.
JP Morgan reported a $58.5bn biggest annual profit on Wednesday, the largest in US banking history and beating its previous record of $49.6bn in 2023.
Goldman Sachs’s annual profits also rose by 68pc to $14.3bn after a boom in clients ploughing into the US stock market following Mr Trump’s election victory in November.
The record-breaking figures were driven by strong trading activity in the final three months of 2024, when uncertainty over the US Presidential election and then Mr Trump’s win sent the US stock market haywire.
US stocks rallied after Nov 4 with the S&P 500 hitting a record high and delivering gains for the banks.
JP Morgan, led by Jamie Dimon, veteran chief executive, posted a $14bn profit for the three months ending December, a 50pc jump compared with the same period year earlier.
Goldman’s profits for the period covering Mr Trump’s election win also more than doubled to $4.1bn.
Both banking giants are a bellwether for confidence in the US economy.
The president-elect’s plans to deregulate financial markets and lower corporate taxes have fuelled optimism on Wall Street.
Banking regulations such as Basel III, which tell Wall Street how much capital they need to hold, are expected to be softened significantly when Mr Trump takes power.
David Solomon, Goldman Sachs chief executive, said issues that the new Trump administration were talking about had got people “excited”.
“There has been a meaningful shift in CEO confidence, particularly following the results of the US election,” he said.
“Additionally, there is … an overall increased appetite for dealmaking, supported by an improving regulatory backdrop.”
Mr Dimon was also upbeat. “Businesses are more optimistic about the economy and they are encouraged by expectations for a more pro-growth agenda and improved collaboration between government and business,” he said.
Both banks also make a significant sum of money from mergers, and their investment banking businesses also showed a surge in activity.
JP Morgan’s investment bank quarterly revenue rose 46pc versus the prior year to $2.6bn. Goldman’s investment bank revenues was $2bn – up 24pc from a year ago.
Both banks advised on a number of UK deals, including Aviva’s takeover of Direct Line and BHP’s failed £34bn merger bid with Anglo American.
The figures both bode well for Goldman and JP Morgan’s bonuses. Both banks are expected to unveil how much their bankers are paid in an announcement to staff next week.
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