-- Major US banks delivered stronger-than-expected capital markets revenue in the first quarter amid solid gains in advisory and equities trading, RBC Capital Markets said in a note sent to clients Thursday.
The combined capital markets revenue of JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), Goldman Sachs (GS), and Morgan Stanley (MS) climbed nearly 20% year over year, according to the brokerage.
Their aggregate advisory revenue soared 68%, led by Goldman, RBC said. Total investment baking fees increased 31% from the year-ago quarter, including a boost from equity capital markets.
"We saw increased advisory revenues due the large deals announced in 2025 that closed in (the first quarter of 2026) and ECM revenues benefited from increased follow-on and convertible offerings," Gerard Cassidy, co-head of global financials research at RBC, said in the note.
Equities trading rallied about 26%, with Citigroup logging the strongest performance and JPMorgan showing the smallest gain among the five banks.
The banks' combined fixed income, currencies, and commodities revenue grew 10%, Cassidy said. All five banks except for Goldman achieved year-over-year growth in FICC.
The lenders were "cautiously optimistic" about investment banking activity in the near term, factoring in macroeconomic and geopolitical uncertainties, according to the brokerage.
The deadline for the expiration of a two-week ceasefire between the US and Iran is close. The White House is optimistic about reaching a deal with Tehran, noting that a potential second round of talks would likely be held in Pakistan. Prior peace negotiations in Islamabad ended without a deal last weekend.
"Many of the investment banks pointed to solid backlogs in (the first quarter) which we believe could be monetized in less volatile market conditions," Cassidy said. "The longer economic uncertainty and heightened market volatility exist, however, the more difficult it will be for the companies to grow their investment banking revenues."
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