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Global investment banking fees hit four-year high, driven

by M&A

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Large deals resume, including EA's $55 billion acquisition

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U.S. deregulation and lower interest rates spur rebound

By Tatiana Bautzer, Nupur Anand and Manya Saini

NEW YORK, Oct 14 (Reuters) - Major US bank executives

predicted more windfalls as equity markets surged over the last

quarter and the economy held up despite tariffs, but some warned

of frothiness in asset prices.

At Goldman Sachs ( GS ), investment banking revenue jumped 42%

in the third quarter, while rival JPMorgan Chase's ( JPM )

investment banking fees climbed 16%, the banks reported on

Tuesday. Wells Fargo ( WFC ) and Citigroup ( C/PN ) also had solid

performances in investment banking.

"Pipelines look good, the activity levels are good, and the

conversations are constructive" with clients, Wells Fargo ( WFC ) Chief

Financial Officer Mike Santomassimo told journalists on a

conference call.

His counterpart at JPMorgan ( JPM ), Jeremy Barnum, said the investment

banking (IB) environment is quite good after the bank saw its

busiest summer in M&A for a long time. Conditions for equity

capital markets and IPOs are also strong heading into the fourth

quarter, Barnum added.

The strength in M&A is being buoyed by higher asset prices,

where U.S. equity markets have repeatedly hit records. However,

that is causing some concerns.

"A lot of assets looking like they are entering bubble

territory. But those prices fuel IB, equities, asset

management," said JPMorgan ( JPM )

JPM.N

CEO Jamie Dimon. Dimon said that in credit markets, there

were "early signs of some excess."

Citigroup ( C/PN ) Chief Financial Officer Mark Mason said that there

were signs of frothiness in equity markets.

"When you look at equity markets, I think it's hard not to

think that there could be some frothiness in different sectors,

and so we'll have to kind of see how that ultimately evolves,"

Mason told journalists on a conference call.

HIGHER INVESTMENT BANKING FEES

Global investment banking fees reached a four-year high in

the first nine months of the year, underpinning earnings.

"What we've learned so far is that momentum continues across

the majority of business lines with Wall Street remaining strong

and the demand for consumer loans is very resilient," said

Macrae Sykes, a portfolio manager at Gabelli Funds.

Worldwide investment banking fees rose 9% to $99.4 billion

so far this year, the highest since records were set in 2021,

according to LSEG data.

Dealmakers in mergers and acquisitions were standout

performers in the third quarter, particularly in technology and

financial M&A, where fees increased 55% and 34%, respectively,

the data showed.

Multibillion-dollar deals have also resumed as tariff

uncertainty subsided and the Trump administration sought to ease

regulations. Megadeals in the third quarter tallied up to a

stunning $1.26 trillion.

The $55 billion acquisition last month of video game developer

Electronic Arts by buyout group Silver Lake, Saudi Arabia's

Public Investment Fund (PIF) and Affinity Partners was the

largest leveraged buyout in history.

The rebound in dealmaking has been spurred by stocks at

historical highs, lower interest rates and lighter regulations

under Trump, which offset the uncertainty from trade tensions

that stalled activity earlier this year.

Global mergers and acquisitions surged 40% in the third

quarter versus the previous year, according to Dealogic data.

While megadeals rebounded, a paltry 8,912 deals were signed,

down 16% from last year, the worst third-quarter for deal volume

in 20 years, the data showed.

The rebound in activity also led to a flurry of job-hopping by

senior executives.

Even the U.S. government is contributing to dealmaking,

pursuing deals across up to 30 industries, involving dozens of

companies deemed critical to national or economic security,

Reuters reported this month.

Global investment banking fees:

Bank 2025 YTD 2024 YTD 2024

Wallet Rank

share (%)

JPMorgan 7.7 1 7.8

Goldman Sachs 6.3 2 6.1

Morgan Stanley 5.2 4 4.8

BofA 5 3 5.5

Citi 4.2 5 3.9

Barclays 2.7 6 2.9

Wells Fargo 2.5 7 2.3

Source: LSEG

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