Stock prices soar, regulations loosened! Major US banks set to finish strong in 2025 and are expected to continue leading in 2026.

The largest bank in the United States is ending 2025 in a strong position - with its stock price reaching a historic high, its balance sheet size increasing, and enjoying unprecedented regulatory freedom over the past 15 years. In the coming years, this industry and its top institutions plan to turn this momentum into a sustained growth story. The stock price of the second largest bank in the United States - Bank of America Corp (BAC.US) - hit a historic high in December, finally surpassing its pre-financial crisis peak in 2006. The stock prices of the largest in the US, JPMorgan Chase (JPM.US), and the fourth-largest, Wells Fargo & Company (WFC.US), are also at all-time highs. Citigroup Inc.'s (C.US) stock price has surpassed its book value per share for the first time in seven years, but is still about 80% lower than its historical peak in 2000. An index tracking these banks and the top 20 lending institutions in the US - the KBW Bank Index (BKX) - has risen by 29% year-to-date, outperforming the S&P 500 index by 13 percentage points. Wells Fargo & Company analyst Mike Mayo said, "This is certainly more upside than we anticipated at the beginning of the year." He added, "Large banks will outperform the market again in 2026." Wall Street has been a significant growth engine for these banks. Increased M&A activity in 2025 and heightened market volatility have led to substantial growth in their investment banking and trading division fees. According to Dealogic data, despite market turbulence related to tariffs and the government shutdown in the spring and fall, global investment banking business is expected to grow by 10% this year compared to 2024, reaching the highest level since 2021. Analysts expect all these banks, including Goldman Sachs Group, Inc. (GS.us) and Morgan Stanley (MS.US), to set record high trading fees this year, excluding Wells Fargo & Company. At an industry conference hosted by Goldman Sachs Group, Inc. this month, executives of these banks signaled their plans to further expand their "territories" in 2026. Citigroup CFO Mark Mason said, "Despite uncertainties, the global economy shows considerable resilience overall. Capital markets are somewhat open." Bank of America Corp revealed its growth ambitions to investors for the first time in nearly 15 years last month, planning to increase cross-selling between its retail banking and wealth management departments by strengthening financial advisor recruitment and expanding physical branch networks. CEO Brian Moynihan said, "We want to sell products that can retain customers in the long term, not just products." After relaxing restrictions earlier this year, Wells Fargo & Company also plans to expand its scale in almost all business areas (excluding mortgage lending). These restrictions had long suppressed the bank's growth, stemming from its 2016 fake accounts scandal, but now that shadow has faded. The bank's total assets exceeded $2 trillion in the third quarter - a level that was almost unimaginable under previous regulatory constraints. CEO Charlie Scharf said, "Looking ahead, this is an extremely exciting moment for us." Earlier this fall, Moynihan and Scharf set more aggressive profit targets for their respective banks based on Return on Tangible Common Equity (ROTCE). Bank of America Corp aims to raise ROTCE to 16%-18% in the medium term, while Wells Fargo & Company targets a narrower but higher range of 17%-18%. Meanwhile, since the beginning of 2025, JPMorgan Chase's market value has increased by about $200 billion, bringing it closer to becoming the first bank globally with a market value of $1 trillion. Since 2019, JPMorgan Chase has consistently promised investors a 17% ROTCE throughout the economic cycle. JPMorgan Chase plans to spend nearly $10 billion next year to support key businesses such as credit cards and branch expansion, as well as increase strategic investments in areas like compensation and artificial intelligence. Marianne Lake, CEO of JPMorgan Chase's Consumer and Community Banking unit, said at an industry event in December, "While some institutions choose to shrink, it feels good to be a growth-oriented institution." She added, "Competition is healthy...bring it on." Regional banks move towards nationalization It's not just the top four largest banks in the US planning for growth next year. The broader deregulation policies promoted by the Trump administration in the financial services sector have allowed banks to have more surplus capital, making mergers smoother. Analysts at Goldman Sachs Group, Inc. estimate that by the end of next year, the policy changes in the first year of the second Trump administration will provide Bank of America Corp with an additional $180 billion to $200 billion in capital. Some of these funds can be used for acquiring competitors, entering new business areas, or increasing investment in existing high-growth businesses. With higher stock valuations, improved securities portfolios, and concerns about being squeezed by larger competitors, this backdrop has already sparked a series of mergers and acquisitions, and this momentum is expected to continue in the coming year. In October, Cincinnati-based Fifth Third Bank (FITB.US) and Columbus-based Huntington Bank (HBAN.US) announced acquisitions of smaller regional banks. Fifth Third Bank stated that it will acquire Coker Bank (CMA.US) based in Dallas for $11 billion, while Huntington Bank announced the acquisition of Cadence Bank (CADE.US) based in Tupelo, Mississippi and Houston for $7.4 billion. PNC Financial Services Group, Inc. (PNC.US), a larger competitor in the "rust belt" based in Pittsburgh, also acquired FirstBank based in Colorado for $4.1 billion in September. In an interview in December, Goldman Sachs Group, Inc. analyst Richard Ramsden said, "If you want the economy to grow faster, you need someone to finance it." He stated, for the first time in years, there is consensus that "everyone is saying, 'we need to rethink our growth plans and how much growth we are willing to take on.'"