Investment Bank Revenue Outlook 2025-26: Equities Lead, Advisory Surges, Trading Cools

The 2025 outlook for global investment banking suggests a strong rebound from recent sluggishness, with expected revenues rising about 10% year-over-year, propelled by robust equities trading performance. According to Coalition Greenwich (affiliated with S&P Global), top investment banks should reach roughly $346B in revenue in 2025 vs. $315B in 2024 [1].

Equities trading is projected to be the main engine, growing ~15% annually, with derivatives (≈20%), prime services (≈14%), and cash equities (≈13%) the fastest-growing sub-segments [1]. This reflects a combination of market volatility, elevated trading volumes, institutional client demand, and expanding prime brokerage activity. Key banks including Morgan Stanley notably posted ~35% growth in equity trading in Q3 2025 [1].

FICC (fixed income, currencies and commodities) trading, while positive, lags equities with expected growth of just over ~8% in 2025; advisory and origination revenues are recovering from perturbations caused by trade policy and geopolitical uncertainty, with ~8% forecast for 2025 and ~9% expected growth in 2026 [1].

Looking into 2026, there is a cautiously optimistic framework: while advisory and origination revenues are expected to continue improving, with momentum in M&A and IPO activity, trading revenues—particularly equities—are expected to decline. Equities trading revenues are projected to fall ~6%, and FICC revenues to edge down more than 1% [1]. This signals that the strong 2025 gains may not fully carry over as market volatility, valuation pressures, and potential regulatory or macro headwinds temper enthusiasm.

Individual banks are already signaling this mix of opportunities and risks. For example, Bank of America expects its markets revenue to increase by “high single digits to approximately 10%” in Q4 2025, while its investment banking fees are expected to be flat [2]. JPMorgan foresees modest investment banking fee growth and low-teens markets revenue growth in Q4, even as it braces for expense growth of nearly 10% in 2026 [3][4]. The strong Q3 2025 performance by banks such as Morgan Stanley—surpassing Goldman Sachs in equities trading—underscores competitive shifts underway [5].

Strategic implications for banks include ensuring robustness in equities trading operations while preparing for normalization, preserving advisory/origination strength, managing cost inflation (especially personnel, technology, regulation), and maintaining flexibility in risk appetite and capital allocation in anticipation of possible 2026 softness. Open questions include how sustainable the prime brokerage gains are, whether AI-driven volatility will persist, and whether regulatory, macroeconomic, or geopolitical shocks might disrupt current tailwinds.