Equity trading revenues picked up in US investment banks over the first three months of 2025 in light of energetic pre-US tariff activity, with the push for top spot becoming a three-horse race.
JP Morgan saw the greatest success story, with an 87% quarter-on-quarter (QoQ) hike in equities financing and market making revenues to US$3.81 billion. This also represented a 41% year-on-year increase, from US$2.7 billion in Q1 2024, and put it in competition with battling titans Morgan Stanley and Goldman Sachs.
Goldman continued to edge ahead of Morgan Stanley in overall equity trading revenues – but the gap between the two investment banks, which have been in close competition since Q2 2024, is narrowing. Morgan Stanley reported more than a 50% QoQ increase in revenues, up 78% to US$4.1 billion. The YoY change was far more subdued, however, up just 4% from the bank’s strong lead over competitors in Q1 2024.
Goldman’s steady performance over recent quarters resulted in a 21% revenue increase in Q1. Although the most marginal of the banks referenced here, the firm’s steady performance over recent quarters meant it remained the frontrunner, with a reported US$4.19 billion in equity trading revenues. Its progress was more clearly seen when YoY results were considered, with its 35% increase in revenues the second largest of the cohort.
In the last three months, Goldman CEO David Solomon commented: “We started to see growth showing and slowing in late January and early February. We obviously saw significant moves in equity markets as people positioned for a different kind of trade policies during March, and we saw significant moves in the March period, which actually led to higher activity for us in a variety of ways.”
Bank of America and Citi followed similar trajectories, with revenues rising in tandem but overall performance leaving them well behind the three leaders of the pack. BofA’s revenues rose 48% to US$2.19 billion over the quarter, and 15% YoY. Citi was up 36% QoQ and 25% YoY to US$1.5 billion.
During an earnings call, BofA was questioned on their competitive capabilities.
“This has been a relentless climb up the ladder,” responded Brian Moynihan, CEO. “The idea is to keep gaining share, but at a pace that capitalises on the volume of revenue into the business and grows from there, as opposed to grabbing it and giving it back and grabbing it and giving it back. Expect us to keep gaining share. We’ll keep closing the gaps.”
On investor behavior, Citigroup CEO Jane Fraser observed that clients are wary of making big moves in an uncertain environment after March’s turmoil. “At the moment, [we’re] still seeing deals happening. Even over this last weekend, we were pretty busy. But I would say that most clients are pausing their plans. No one is taking bets in the market right now.
“We’re seeing them prep for more headwinds, so we’re seeing some bolstering of already strong balance sheets.”
Jeremy Barnum, chief financial officer at JP Morgan, agreed that corporate clients were adopting a “wait and see” approach to markets post-US tariffs.
Less concerned by macro conditions is Solomon, who is confident in Goldman’s strength going forwards. “We’re early in the quarter, and so far the business is performing very well and clients are very active,” he affirmed.
Considering global uncertainties, “the animal spirits are still there, insofar as folks are trying to not get caught offsite. We’re seeing natural volatility,” he continued. “The question over time will be, at what point does the uncertainty result in a knockout of the new issue business? Volumes will slow on the back of just a continued sense of uncertainty, and then you see gapier markets and lower volumes. [At the moment] we’re not seeing that.
“For all of the concerns about what could come down the road in the real economy, the market making and the ability to transact to clients as they up-and-down their leverage levels has been very orderly.”
“Markets are off, but clients remain very much engaged,” concurred Ted Pick, Morgan Stanley CEO. “A bear case would be a weaker economy, weaker sentiment. But that’s not where we are.”
Fraser agreed: “There are a lot of complicated dynamics happening, but it is pretty orderly out there on the trading side. We’re seeing clients taking the opportunity to de-risk, so that if we have more turbulence ahead everyone’s in a stronger position for it. But it’s early days. We’ve got to see how this unfolds.”
