A Wall Street dealmaking bonanza in the third quarter helped boost profits at JPMorgan Chase (JPM) and Goldman Sachs (GS) as some of the country’s largest banks raked in higher revenues from investment banking and trading.
JPMorgan posted net income of $14.4 billion, a 12% increase from the third quarter of last year and roughly $1 billion more than what analysts anticipated.
Revenue from JPMorgan’s investment banking division climbed 17% from a year ago to $2.6 billion while client trading jumped 25% to $8.94 billion.
“The U.S. economy remained resilient in the quarter,” JPMorgan Chase CEO Jamie Dimon said in an earnings release, adding that “M&A activity picked up against a supportive backdrop.”
“However, significant risks persist — including from tariffs and trade uncertainty, worsening geopolitical conditions, high fiscal deficits and elevated asset prices,” he added. “As always, we hope for the best but prepare the firm for a wide range of scenarios.”
Goldman reported net income of $4.1 billion, a 37% increase from the third quarter of last year and roughly half a billion dollars more than what analysts anticipated.
Goldman’s revenue from investment banking climbed 42% from a year ago to $2.6 billion while client trading and financing jumped 11.5% to $7.2 billion.
“This quarter’s results reflect the strength of our client franchise and focus on executing our strategic priorities in an improved market environment,” Goldman CEO David Solomon said in the bank’s earnings release.
Another big bank that benefitted from a recent frenzy of mergers and IPOs was Wells Fargo (WFC). Its third-quarter profits were $5.6 billion, a 9% increase from the third quarter of last year and also roughly half a billion dollars more than what analysts anticipated.
Its fees from investment banking rose 25% from the third quarter of last year, to $840 million. In July, Wells Fargo landed a leading role in the one of the largest tie ups so far this year: Union Pacific’s $72 billion acquisition of rail rival Norfolk Southern Corp.
“The momentum we are building across our businesses drove strong financial results in the third quarter,” Wells Fargo CEO Charles Scharf said in the bank’s earnings release.
“While some economic uncertainty remains, the U.S. economy has been resilient and the financial health of our clients and customers remains strong,” Scharf added.
The stocks of JPMorgan and Goldman were roughly flat in early market trading, while Wells Fargo was up more than 2%.
