For years, Wall Street’s biggest banks struggled to fire on all cylinders: one division did most of the work. For a while, that was consumer banking. More recently, amid a slowdown in lending and net interest income growth, trading desks picked up the slack. Now, it is dealmakers who are roaring. The difference, however, is that this time other businesses have plenty of momentum of their own.
M&A is certainly booming, with companies globally striking $1tn of deals in the third quarter, one of the busiest in history. As a result, JPMorgan Chase, Citigroup and Goldman Sachs collectively pulled in around $6.5bn in advisory work and equity and debt underwriting fees, 25 per cent more than a year ago. That contributed to net income growth, which at Goldman — the most pure play investment bank out of the three — was 37 per cent during the third quarter.
