Investment banks on Wall Street are gearing up for a deal boom in 2025 as president-elect Donald Trump returns to the White House.
Investment banks such as Goldman Sachs (GS) and Morgan Stanley (MS) are preparing for a surge in initial public offerings (IPOs) and mergers and acquisitions (M&A) in the year ahead.
The Reuters news agency is forecasting that investment banking income could rise to $316 billion U.S. globally next year, a jump of about 5.7% over 2024 levels.
Global investment banking income has surpassed $300 billion U.S. on only five previous occasions in the last 20 years.
Trump's pro-business leanings and de-regulation are expected to open the flood gates on Wall Street when it comes to deals such as IPOs and M&A.
The Trump administration’s de-regulation could be of particular help to M&A activity, which has been anemic in recent years due to enhanced regulatory scrutiny under current U.S. President Joe Biden.
At the same time, revenue from trading securities, which is the biggest contributor to investment bank income, is forecast at $220 billion U.S. for 2025, which would be the highest since 2022.
With revenue on the rise, demand for bankers and their compensation is also expected to grow in the coming year.
Pay consultancy Johnson Associates has said that it expects banker salaries to rise in every business unit except for real estate investing.
Headhunters are reporting new hiring mandates from some banks following Trump's re-election, with a focus on adding staff in the first quarter of 2025.
The bottom line is that boom times look to be returning to Wall Street.
