Next week, major banks such as JPMorgan, Citigroup, and Goldman Sachs will be the first to announce their Q4 performance, signaling the official start of a new earnings report season for USA stocks.

Among them,$JPMorgan (JPM.US)$、$Goldman Sachs (GS.US)$、 $Citigroup (C.US)$ 、$Bank of New York Mellon (BK.US)$and$Wells Fargo & Co (WFC.US)$将率先于下周三（1月15日）陆续公布财报；随后，是下周四（1月16日）公布业绩的$Bank of America (BAC.US)$、 $Morgan Stanley (MS.US)$ 和、$U.S. Bancorp (USB.US)$。

Looking back at 2024, the stock prices of large banks performed strongly overall. Goldman Sachs and Bank of New York Mellon had significant cumulative increases, soaring about 52% last year; Wells Fargo & Co, JPMorgan, and Citigroup all rose over 40%, Morgan Stanley nearly 40%, and Bank of America close to 34%. In addition, Citigroup recently hit a historical high, and many banks, including Goldman Sachs, Wells Fargo & Co, and JPMorgan, also set historical highs at the end of November last year.

The performance of the U.S. banking industry is widely watched by investors at the beginning of each Earnings Reports season, and this quarter's bank earnings reports may reveal new trends in business recovery and profit growth among major Wall Street firms.

• The market trading and investment banking businesses of major Wall Street firms are showing signs of recovery.

There are indications that the market trading and investment banking businesses of major Wall Street firms are recovering. After two years of sluggishness, these major banks have finally encountered a turning point. Analysts generally expect that, apart from fixed income, MMF, and CSI Commodity Equity Index trading, all other department revenues of the world's top banks will achieve their first growth since 2021 this year. This means that global major banks are likely to usher in a year of abundant earnings.

In the field of investment banking, the revenues of major Wall Street firms in 2024 have already increased, ending a two-year 'drought'. According to Dealogic data as of December 17, 2024, the investment banking income of major firms is expected to reach the third highest level in the past decade. Although it is still below the peak in 2021, Solomon predicts that, with more trades taking place and the new American government simplifying regulations...mergers and acquisitions.The approval process indicates that the Investment Banking Business is expected to continue its rebound next year.

Brian Moynihan, CEO of Bank of America, stated in December that the bank's investment banking business is expected to see quarterly revenue growth of at least 25% year-on-year, while the sales and trading business is projected to hit a new high.

Moynihan mentioned that as trading continues to grow, fourth-quarter investment banking revenue may exceed 1.4 billion USD. Analysts had previously estimated that its investment banking revenue would approach 1.5 billion USD, representing a growth of about 27%. Furthermore, Moynihan stated that Bank of America's sales and trading business should again record a year-on-year increase, achieving mid to high single-digit growth in Q4. Analysts predict that market revenue will rise by 8.2% to 4.06 billion USD.

• The profit share of the four largest banks in the USA is expected to reach a nearly ten-year high.

According to relevant Statistics, the four major Banks in the USA (JPMorgan, Bank of America, Citigroup, and Wells Fargo & Co) are expected to achieve the largest share of industry profits in nearly a decade in 2024, indicating that they are consolidating their dominant market positions. Based on media reports utilizing data from the industry tracking institution BankRegData, the total profits of the largest four Banks in the USA are approximately 88 billion dollars for the first nine months of 2024.

It is reported that the U.S. banking industry has over 4,000 banks, with the profits of these four banks accounting for as much as 44%, the highest share for the same period since 2015. Ranked by deposits, the top seven banks in the USA (including U.S. Bancorp, PNC, and Truist) generated nearly 56% of the banking industry profits in the first nine months of this year, significantly higher than the 48% during the same period in 2023. This indicates that large banks are further consolidating their dominant market position.

It should be noted that this data comes from the financial reports submitted by each bank to the Federal Deposit Insurance Corporation (FDIC), focusing solely on the profit situations of bank entities within the USA. Different banks may include different scopes of business in their reports, for example, JPMorgan and Bank of America's data includes earnings from investment banking and trading operations, while many smaller banks do not engage in these areas, further widening the profit gap between large and small banks.

In addition, it is noteworthy that due to the improvement in Business and an optimistic outlook for the coming year, sources reveal that executives from the largest investment Banks on Wall Street are planning to increase year-end bonuses, with many departments expecting bonuses to rise by 10% or more. It is reported that the average salary increase for investment bankers and traders responsible for Stocks and fixed income products at Bank of America is over 10%, while bonuses for traders at Morgan Stanley will also increase by over 10%, and bonuses for investment bankers at JPMorgan will increase by about 15%, with Goldman Sachs providing even greater rewards for certain trading departments.

The era of Trump 2.0 has begun, and banking regulations are expected to relax.

As Trump is about to be sworn in as the 47th President of the USA on January 20, 2025, the banking industry is expected to become an important investment opportunity. The market anticipates that Trump may restore policies that ease financial regulations, which will help improve banks' leverage, profitability, and dividend payments.

Earlier reports indicated that Trump is considering some adjustments to banking regulatory agencies, and his transition team is exploring the possibility of significantly reducing, consolidating, or eliminating the highest regulatory authority in banking. However, U.S. Treasury Secretary Yellen issued a warning, emphasizing the importance of not interfering with appropriate regulation of the capital levels, liquidity, and risk-taking of U.S. banks, which are crucial for ensuring the health of the banking system.

On January 6, the Federal Reserve's official website announced that Vice Chairman Barr, who oversees financial regulation, will resign from his position as regulatory vice chairman. Market analysts believe Barr's departure may be related to Trump's upcoming presidency.

During the Biden administration, Barr was an important participant in the negotiations over the U.S. version of the Basel Accord draft. According to new banking regulatory proposals released by the Federal Reserve and other U.S. regulators in July 2023, banks with assets exceeding $100 billion must increase their capital by about 16%, and major banks like JPMorgan and Citigroup may face capital growth of approximately 19%.

Wall Street executives and related industry associations have long criticized the capital requirements imposed by the Federal Reserve, particularly after the introduction of new regulations in 2023, leading to intensified opposition. On December 24, 2024, the Bank of America and business groups jointly filed a lawsuit against the Federal Reserve, accusing it of keeping the design process of stress test standards confidential and lacking public involvement, resulting in significant and unpredictable fluctuations in banking capital requirements.

As Trump's inauguration approaches and with the departure of key figure Barr from financial regulation, it seems that the USA banking industry is experiencing some degree of concession from regulatory agencies. Institutions indicate that if expectations for regulatory relaxation and tax cuts under the incoming Trump administration become reality, then bank stocks have substantial room for growth.

Analysts led by Vivek Juneja at JPMorgan pointed out in their 2025 large bank outlook report: "We expect that 2025 may be volatile, with two distinctly different phases within one year." They predict that the uncertainty brought by policy changes may lead to continued short-term market turbulence, but potential favorable solutions to capital requirements could become positive factors for the long-term development of the banking industry.

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