On January 18, 2025, mid-sized banks in the U.S. reported higher fourth-quarter profits, driven by a resurgence in investment banking and trading activities. Danni Hewson from AJ Bell noted that 'dealmaking is back with a vengeance,' indicating a robust recovery in the sector. Notably, Truist's shares rose nearly 3%, Regions Financial increased by 0.7%, and Huntington climbed 1.2%, reflecting positive market sentiment [2a18a09e].
This upswing in profits aligns with the broader trend observed among major banks, including J.P. Morgan Chase & Co., which reported record net income of $58.5 billion for 2024, and Goldman Sachs, which saw a 68% increase in net profit to $14.3 billion [1be20c99]. The optimism surrounding mid-sized banks is partly attributed to expectations of a 'Trump bump' in investment banking, fueled by anticipated corporate tax cuts and deregulation under President-elect Donald Trump [2a18a09e].
However, concerns linger regarding Trump's proposed tariffs, which could potentially increase inflation. Recent data indicated that U.S. consumer prices rose the most in nine months in December 2024, raising questions about the sustainability of this economic growth [2a18a09e].
Despite the positive outlook, loans and leases at Citizens, Truist, and Regions have seen a decline, prompting analysts to monitor these trends closely. The Federal Reserve has projected fewer rate cuts in 2025, which may influence lending practices and overall bank performance [2a18a09e].
As the financial landscape continues to evolve, the market is keenly observing the developments in both mid-sized and major banks, particularly in light of the ongoing regulatory changes and economic adjustments post-COVID-19 [1be20c99].