Bank of America (BAC) and Morgan Stanley (MS) more than doubled fourth-quarter profits, cementing Wall Street's recovery, boosting results for all the big U.S. banks and giving dealmakers hope for what's to come in 2025. There’s optimism in the Trump era.
Bank of America's profit for the quarter was US$6.7 billion, an increase of 111% from US$3.1 billion in the same period last year. The results brought full-year profits to $27.1 billion.
Morgan Stanley's profit in the last quarter of last year was US$3.7 billion, an increase of 145%. Its full-year profit was $13.4 billion, an increase of 47% from 2023.
"We ended 2024 with a strong fourth quarter, and we believe this broad-based momentum positions Bank of America well into 2025," said Bank of America CEO Brian Moynihan.
Morgan Stanley CEO Ted Peake called it an "outstanding fourth quarter" that capped "one of the strongest years in the company's history."
The banks' performance suggests a two-year trading drought will end in 2024, with volumes surging as volatility intensifies during the U.S. presidential election.
Bank of America's investment banking fees rose 44%, while sales and trading revenue rose 10% to $4.1 billion. Morgan Stanley's investment banking revenue rose 25% to $1.64 billion.
Strong results on Wall Street helped other big banks in the fourth quarter, including JPMorgan Chase (JPM), Goldman Sachs (GS), Citigroup (C) and Wells Fargo (WFC).
JPMorgan Chase & Co. is making more annual profits than ever before, with profits of $14 billion in the final quarter of 2024.
Its full-year profit rose to $58 billion, a record for JPMorgan Chase and the highest in the history of the U.S. banking industry. Its fourth-quarter profit increased 50% from the same period last year.
Goldman Sachs' fourth-quarter profit surged 105% to $4.1 billion, and full-year profit surged 68% to $14.2 billion. Its investment banking fees rose 24% in the fourth quarter.
Wells Fargo's fourth-quarter investment banking expenses increased by 59% compared with the same period last year, and fourth-quarter profits increased to US$5.08 billion from US$3.45 billion in the same period last year.
Many bankers hope deal activity will continue to recover in 2025 as Republicans take over Washington.
Shares of the largest U.S. banks have risen following the election of Donald Trump on hopes his administration will loosen some rules and adopt more lenient policies when it comes to approving corporate mergers.
The Trump administration is expected to repeal or modify a set of proposed capital rules that could curb future industry profits.
All major bank stocks rose again Wednesday as earnings season got underway.