Banking Executives Express Renewed Optimism
Wall Street’s top executives couldn’t stop emphasizing their growing deal pipelines during third-quarter earnings season, with multiple banking chiefs reporting the strongest activity levels in years. According to reports from major financial institutions, the improvement marks the first time in several years that deal activity has strengthened simultaneously across advisory, equity, and debt underwriting business lines.
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JPMorgan’s chief financial officer Jeremy Barnum told investors that their pipeline remains robust, noting that “I think it was the busiest summer we’ve had in a long time in terms of announcement activity.” Sources indicate that Bank of America’s CFO Alastair Borthwick reported deal flow was “up this quarter, up over double digits,” adding that “it feels like a good environment” for mergers.
Investment Banking Revival Across Multiple Sectors
Morgan Stanley CEO Ted Pick sounded optimistic while acknowledging the uncertainty, stating that “whether we are entering a golden age of investment banking remains to be seen, but it has been several years of chatter around green shoots, and now the flywheel is taking hold.” The report states that banking chiefs are seeing improved conditions across the three pillars of investment banking business: mergers, public issuances, and corporate lending.
Goldman Sachs reported the quarter had generated its “third highest quarterly net revenues,” with CEO David Solomon noting they recently hit the milestone of advising on over $1 trillion in announced M&A volumes for 2025 year-to-date. Analysts suggest that financial sponsors are sitting on more than $1 trillion in so-called “dry powder” – liquidity waiting to be deployed – creating what Goldman describes as a “constructive” setup.
Equity and Debt Markets Show Strong Recovery
Equity capital markets demonstrated renewed vitality across multiple institutions. According to the analysis, Morgan Stanley reported equity underwriting revenues up 80% from a year ago, fueled by what it called “record-breaking post-Labor Day issuance.” Citigroup reportedly saw equity underwriting grow 35%, while Bank of America’s equity underwriting fees of $362 million climbed 34%.
Executives across multiple banks pointed to a backlog of IPOs stretching into 2026 as companies prepare to return to public markets. However, sources indicate that the ongoing US government shutdown, now entering its third week, could potentially delay new listings and threaten the rebound by halting regulatory functions at agencies like the SEC that oversee the IPO process.
Debt issuance followed similar positive trends, with Citigroup reporting corporate lending revenues up 39% and debt underwriting fees up 19%. Bank of America’s debt underwriting fees reportedly shot up 42% to $1.1 billion.
Compensation Outlook Improves for Bankers
Chris Connors, a principal at compensation consultancy Johnson Associates, told Business Insider that the results predicted healthy paydays for bankers come year’s end. “The signs are pointing positive for bonuses this year across the board,” Connors stated, adding that “advisory incentives are going to be up as well – the backlogs are strong, and I think there’s just an optimism that the rest of the year is going to produce pretty positive results when it comes to M&A.”
According to reports, the improved outlook extends beyond traditional banking sectors, with technology companies also showing strength. Recent developments in the technology sector include Apple’s official announcement of the M5 chip and Google’s release of the final Android 16 QPR2 Beta 3. Meanwhile, energy sector developments include Britain’s biggest energy supplier indicating bills are likely to increase, and gaming platforms like Steam are shattering concurrent player records.
The banking executives concluded that their clients “are more comfortable about the long-term outlook” and optimistic that deals will continue through the fourth quarter and beyond. Citigroup CEO Jane Fraser reportedly stated the firm intends to wrap up the year “with momentum into 2026,” with her investment banking unit seeing revenues jump 17% quarter over quarter and 23% year on year to $1.15 billion.
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