Investment banks are predicting a 5.7% increase in global income for 2025, driven by President-elect Donald Trump’s pro-business policies and the expected rebound of mergers and acquisitions (M&A) activity.
According to data from analytics provider Coalition Greenwich, M&A bankers can expect to rake in $27.6 billion in fees next year, which could be their second-best year in at least two decades. This is a significant jump from recent years, when earnings power were stifled by the pandemic and inflation.
Trump’s administration is expected to create a more favorable environment for dealmaking, with bankers predicting that he will wave through deals blocked under the previous administration due to competition or strategic concerns. Private equity firms are also likely to be active as both buyers and sellers of businesses, according to analysts.
While revenue from securities trading may remain stable, credit and emerging markets macro-related products are expected to see significant growth, with a 6% increase each in 2025. Trading in interest rate-related products could decline by up to 3.5%.
Banker payouts are also expected to follow the increase in revenue, although bonuses will remain below bumper levels for now. Headhunters are reporting increased hiring mandates from banks and a focus on adding staff in the first quarter, traditionally a time when most banks reduce headcount.
Overall, Trump’s dealmaking boost is expected to fuel investment banking growth, with bankers predicting a strong 2025.
Source: https://www.reuters.com/business/finance/investment-banks-eye-2025-income-boom-trump-drives-deal-rebound-2024-12-06