Goldman retook the Q4 US equities trading revenues crown at US$4.3 billion, ahead of Morgan Stanley’s US$3.7 billion. Across Wall Street, prime brokerage and derivatives were the drivers of overall growing results; cash intermediation stayed quieter.
Goldman Sachs had the highest equities quarterly revenues at $4.3 billion, up 16% quarter on quarter (QoQ) and 25 year on year (YoY).
Its CFO, Denis Coleman said: “Equities intermediation was up 11% year over year on better performance in derivatives. Equities financing hit a quarterly record of $2.1 billion, up 42% versus the prior year amid record average prime balances.”
Prime brokerage (PB) units, the results of which are directly correlated to account balances or clients’ positions’ values, had stellar results. They were the generic earnings boost for most Wall Street banks.
Morgan Stanley reported US$3.7 billion, down 10% QoQ but up 11% YoY.
CFO Sharon Yeshaya highlighted the breadth of the results, saying: “All businesses were up versus the prior year’s fourth quarter. Prime brokerage revenues drove the fourth quarter’s results; client balances continue to rise, supporting the outlook for financing revenues.”
The bank, having sold its retail market-making business to Citadel Securities in the first half of the year, still benefited from better equity derivatives’ revenues, with the CEO, Ted Pick, saying: “We actually are coming across now as a derivatives house as well for clients.”
Read more: Morgan Stanley paid US$275m for options flow before Citadel sale
JPMorgan had revenues of US$2.9 billion, down12% QoQ but up the most of its competitors on the year showing a growth of 40% YoY.
Its CFO, Jeremy Barnum, echoed his peers during the analyst call. He said: “Equities was up 40%, with robust performance across the franchise, particularly in Prime.”
Citigroup came in at US$1.1 billion, down 27% QoQ.
Its CFO, Mark Mason, said: “Equities revenues were down 1% YoY, as growth in Prime Services — with balances up more than 50% — and derivatives was more than offset by a decline in cash, against a strong prior year quarter.”
Banks are having to increase their risk and balance sheets to earn the same trading revenues, with growing dependence on outsized ‘alpha trades’ according to Citi’s Jane Fraser.
Responding to analysts who were surprised at the lack of revenue growth despite client PB balances being up 50% year on year, and explaining tough year-on-year comp she said: “We had [in Q4 2024] a couple of very big alpha trades. And so, if you strip that out, it looks much more in line with what you would expect. The problem if you have a great fourth quarter, it comes back and bites you.”
Citi’s reported 99% var in Q4 2025 stood at US$109 million versus US$117 million in Q3 and US@119 million in Q4 2024, reflecting the lack of aforementioned large ‘alpha’ trade this last quarter.
Bank of America had revenues of US$2.0 billion, down 13% QoQ and up 22% YoY. The bank CFO, Alastair Borthwick, explained the positive results saying: “It was equities trading that led the improvement, growing 23%, supported by increased activity in Asia.”
Away from trading all banks highlighted strong equity capital markets pipelines going forward, as Goldman pointed to very large IPOs coming in 2026 and 2027.
The strong equity mix prompted Morgan Stanley analysts, led by Giulia Aurora Miotto to make a read across to upcoming European bank results, saying: “The prints provide a positive read-across for strong Equities franchises, in particular UBS, but also BNP and SocGen”
