GRAPHIC-Wall Street banks' fourth-quarter earnings in five charts

By Manya Saini

Jan 16 (Reuters) - Wall Street's largest banks ended 2025 on a strong note and executives struck an upbeat tone for the year ahead, even as U.S. President Donald Trump's proposed cap on credit card interest rates kept the industry on edge.

Analysts expect high-profile IPOs and big-ticket deals to sustain momentum for investment banking, while persistent market volatility is set to keep trading strong.

Below are key trends from the fourth-quarter results of top U.S. banks:

SPOTLIGHT ON CONSUMER BANKING

Interest income, a measure of lending profitability, rose across the big banks, supported by healthy loan growth and a decline in deposit costs.

Commercial and industrial loans and credit card balances edged higher in the quarter as borrowing demand held up despite elevated interest rates.

Trump's proposed 10% cap on credit card interest rates drew a sharp pushback from the industry this week, with executives warning it would restrict credit availability for everyday Americans and weigh on the economy.

Credit cards are among the most profitable products as they carry some of the highest interest rates since the debt is unsecured.

Credit quality remains a top focus as analysts and investors scrutinized the results for signs of strain in consumer and business health.

Charge-offs, or debt that a bank declares as unlikely to be paid back, reflect how consumers are faring and the state of household finances.

INVESTMENT BANKING STRENGTH

Mergers and acquisitions rebounded strongly in 2025 and pushed global investment banking revenues above $100 billion, according to data from Dealogic.

Bankers are optimistic about another robust year as antitrust headwinds ease, markets hover near record levels and the U.S. economy remains resilient.

TRADING MOMENTUM

Banks capitalized on market swings, generating revenue from client portfolio rebalancing and increased proprietary trading. Many also benefited from a surge in demand for products that protect against market swings.

"Equity trading revenues have been the story of the earnings so far, strong gains in the use of leverage/options were big drivers of that growth," said Brian Mulberry, senior client portfolio manager at Zacks Investment Management, which owns several large-cap banking stocks.

Volatility is expected to persist in 2026 amid concerns about stretched valuations, a bubble in AI stocks and uncertainty over the Federal Reserve's policy path.

STOCK PERFORMANCE

"Overall, we are bullish on the big banks as the economy remains stable, labor market is a little softer but not as weak as feared and with stable prices consumers are still spending," Mulberry said.

(Reporting by Manya Saini in Bengaluru; Editing by Sriraj Kalluvila)

((Manya.Saini@thomsonreuters.com; X: manya__saini;))