Major United States banks are expected to report stronger fourth-quarter profits next week, driven largely by a rebound in investment banking revenue as deal-making activity accelerates, according to a Reuters report.

JPMorgan Chase, the largest U.S. lender, is set to kick off the earnings season for banks on 13 January. It will be followed by Citigroup, Bank of America and Wells Fargo, which are scheduled to release their results on 14 January, while Goldman Sachs and Morgan Stanley are expected to report on 15 January.

Analysts say the banks’ performance in the quarter benefited from a revival in mergers and acquisitions, improved initial public offering activity and sustained strength in trading across commodities, fixed income and equities.

“The fourth quarter shaped up to be a perfect recipe for a consecutive build-up in investment banking revenues,” Stephen Biggar, a banking analyst at Argus Research, told Reuters. He cited an improving IPO calendar, a surge in M&A activity and elevated trading volumes as key drivers of earnings growth.

Data from Dealogic showed that global investment banking revenue rose by 15 per cent from a year earlier to nearly $103 bn, the second-highest level since 2021, with JPMorgan leading the global league table. Global mergers and acquisitions volume climbed to $5.1 tn in 2025, representing a 42 per cent increase from 2024, largely supported by a wave of megadeals. Goldman Sachs topped the M&A rankings.

Beyond investment banking, analysts expect broad loan growth and an expansion in net interest margins to further support bank earnings. According to Reuters, expectations of pro-growth policies, lighter regulation and changes to capital rules are also likely to boost lending activity in the coming year.

A generally healthy U.S. economy is expected to underpin bank performance, although analysts have flagged inflation as a key variable to watch. Higher inflation, potentially driven by tariffs, fiscal stimulus and tax cuts, could keep interest rates elevated and eventually dampen deal flow, analysts said.

Meanwhile, investor optimism has already been reflected in market performance. An S&P index of U.S. bank stocks has risen about 3 per cent so far this year, following a 30 per cent rally in 2025, as investors position for stronger earnings and improved profitability in the sector.