Goldman Sachs Leads Bank Earnings Beat as Trading Surges; Morgan Stanley and BofA Trail with Mixed Results
Wall Street's major banks posted stronger-than-expected second-quarter results this week, underscoring how volatile markets and cautious optimism are shaping the post-tariff earnings season.
Goldman Sachs (GS) stole the spotlight with a blockbuster performance, while Morgan Stanley (MS) and Bank of America (BAC) also rode a trading tailwind despite mixed results in dealmaking.
Goldman Sachs: A Return to Form
Goldman Sachs delivered a standout quarter, with net earnings rising 22% year-over-year to $3.7 billion—well above analyst expectations. Revenue hit $14.58 billion, marking a 15% gain, fueled by a surge in both trading and advisory services.
The bank’s equities division had its best quarter ever, with trading revenue up 36% to $4.3 billion. Investment banking fees also rose sharply, climbing 26% to $2.19 billion, thanks to a rebound in mergers and acquisitions activity. CEO David Solomon pointed to a “remarkably resilient” dealmaking environment and growing CEO confidence.
Goldman’s Global Banking & Markets division, its largest segment, accounted for nearly 70% of total revenue. Its Advisory business surged 71% year-over-year, maintaining the firm’s top spot in completed M&A deals. The firm raised its dividend by 33% to $4.00 per share and returned nearly $4 billion to shareholders during the quarter.
Despite market turbulence and uncertainty following new U.S. trade tariffs, Solomon emphasized the firm’s “focus on risk management” and remained upbeat about the evolving policy landscape.
Goldman Sachs delivered a standout quarter, with net earnings rising 22% year-over-year to $3.7 billion—well above analyst expectations. Revenue hit $14.58 billion, marking a 15% gain, fueled by a surge in both trading and advisory services.
The bank’s equities division had its best quarter ever, with trading revenue up 36% to $4.3 billion. Investment banking fees also rose sharply, climbing 26% to $2.19 billion, thanks to a rebound in mergers and acquisitions activity. CEO David Solomon pointed to a “remarkably resilient” dealmaking environment and growing CEO confidence.
Goldman’s Global Banking & Markets division, its largest segment, accounted for nearly 70% of total revenue. Its Advisory business surged 71% year-over-year, maintaining the firm’s top spot in completed M&A deals. The firm raised its dividend by 33% to $4.00 per share and returned nearly $4 billion to shareholders during the quarter.
Despite market turbulence and uncertainty following new U.S. trade tariffs, Solomon emphasized the firm’s “focus on risk management” and remained upbeat about the evolving policy landscape.
Morgan Stanley: Trading and Wealth Deliver, But M&A Slips
Morgan Stanley also beat Wall Street estimates, reporting $3.5 billion in net income, or $2.13 per share, compared to $3.1 billion a year ago. Total revenue came in at $16.8 billion, exceeding analyst projections.
The bank’s traders capitalized on heightened volatility, with equities revenue jumping 23% and fixed income rising 9%. But investment banking revenue dropped 5% year-over-year, with advisory revenue falling to $508 million amid a slowdown in closed M&A deals during April’s tariff-related uncertainty.
CEO Ted Pick said market activity rebounded in the second half of the quarter, and the bank remains optimistic about upcoming deal flow. The wealth management division continued its ascent, bringing in $7.8 billion in revenue and adding $59 billion in net new assets.
With total client assets in wealth and investment management reaching $8.2 trillion, Morgan Stanley is aiming to hit $10 trillion in the coming years. Pick reiterated the bank’s cautious approach to acquisitions, noting that while inorganic opportunities are being evaluated, the bar for deals remains high.
Morgan Stanley also beat Wall Street estimates, reporting $3.5 billion in net income, or $2.13 per share, compared to $3.1 billion a year ago. Total revenue came in at $16.8 billion, exceeding analyst projections.
The bank’s traders capitalized on heightened volatility, with equities revenue jumping 23% and fixed income rising 9%. But investment banking revenue dropped 5% year-over-year, with advisory revenue falling to $508 million amid a slowdown in closed M&A deals during April’s tariff-related uncertainty.
CEO Ted Pick said market activity rebounded in the second half of the quarter, and the bank remains optimistic about upcoming deal flow. The wealth management division continued its ascent, bringing in $7.8 billion in revenue and adding $59 billion in net new assets.
With total client assets in wealth and investment management reaching $8.2 trillion, Morgan Stanley is aiming to hit $10 trillion in the coming years. Pick reiterated the bank’s cautious approach to acquisitions, noting that while inorganic opportunities are being evaluated, the bar for deals remains high.
Bank of America: Consumer and Trading Strength Offset M&A Drag
Bank of America posted solid results with $7.1 billion in net income, or $0.89 per share—above the $0.86 expected. Revenue rose 4% to $26.5 billion, supported by a record $14.7 billion in net interest income.
Trading also stood out, with sales and trading revenue hitting $5.4 billion, up 15% year-over-year. Equities trading revenue rose 10%, while fixed income jumped 19%, both reaching quarterly records. Bank of America’s consumer banking segment also remained robust, with $3.0 billion in net income on revenue of $10.8 billion.
However, investment banking lagged, with fees dropping 9% to $1.4 billion, falling behind peers like JPMorgan (JPM) and Citigroup (C). CFO Alastair Borthwick pointed to smaller deal sizes and a slow April, though activity improved by late May and June.
Bank of America posted solid results with $7.1 billion in net income, or $0.89 per share—above the $0.86 expected. Revenue rose 4% to $26.5 billion, supported by a record $14.7 billion in net interest income.
Trading also stood out, with sales and trading revenue hitting $5.4 billion, up 15% year-over-year. Equities trading revenue rose 10%, while fixed income jumped 19%, both reaching quarterly records. Bank of America’s consumer banking segment also remained robust, with $3.0 billion in net income on revenue of $10.8 billion.
However, investment banking lagged, with fees dropping 9% to $1.4 billion, falling behind peers like JPMorgan (JPM) and Citigroup (C). CFO Alastair Borthwick pointed to smaller deal sizes and a slow April, though activity improved by late May and June.
CEO Brian Moynihan highlighted ongoing commercial loan growth and strong consumer spending as signs of resilience, despite geopolitical and policy-driven headwinds. The bank reiterated its forecast for record net interest income in the second half of 2025 and announced an 8% dividend increase for the third quarter.
Trading Reclaims Center Stage, Dealmaking Reawakens
Goldman Sachs’ explosive quarter reaffirmed its dominance in trading and M&A, while Morgan Stanley and Bank of America demonstrated strength in wealth and consumer banking, respectively. Although investment banking showed uneven recovery, executives across all three firms voiced growing optimism for the second half of the year. With deal pipelines firming and trading volatility proving lucrative, Wall Street’s top banks are navigating a shifting macro landscape with cautious confidence.
Goldman Sachs’ explosive quarter reaffirmed its dominance in trading and M&A, while Morgan Stanley and Bank of America demonstrated strength in wealth and consumer banking, respectively. Although investment banking showed uneven recovery, executives across all three firms voiced growing optimism for the second half of the year. With deal pipelines firming and trading volatility proving lucrative, Wall Street’s top banks are navigating a shifting macro landscape with cautious confidence.
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