As Wall Street’s biggest banks prepare to report fourth-quarter earnings next week, competition is intensifying across nearly every part of the business — from dealmaking and talent to technology. JPMorgan Chase kicks things off Tuesday, followed by Bank of America and Citi reporting on Wednesday, and Goldman Sachs and Morgan Stanley on Thursday.
That competitive pressure is shaping how investors, analysts, and executives are thinking about the coming year. In an interview, Mike Mayo, a longtime Wells Fargo analyst known for his pointed questions on earnings calls, said banks are waging the toughest fight they’ve faced against rivals in years to capture new business.
“The animal spirits have been unleashed,” Mayo said, adding that competition is now “at its most intense level since before the global financial crisis,” with banks across the industry playing offense across sectors ranging from financial advisory to investment management to consumer banking. Even before earnings get underway, some hopeful signals are already emerging — particularly around pay.
Alan Johnson, the founder of compensation consultancy Johnson Associates, said initial readouts from industry insiders at firms that have already communicated compensation are pointing to a strong year. “Banking and trading, the big winners for bonuses this year is sort of what I’m detecting,” Johnson said. Investment banking advisory bonuses, he added, are tracking higher than he predicted, up as much as 20% from the year prior.
As earnings season gets underway, experts say there are four key things to watch.
The dealmaking rebound continues
After a rocky start marked by tariff worries and market volatility, dealmakers finished 2025 in the green. Worldwide M&A value rose about 45% year over year, according to LSEG data, even as the total number of deals declined slightly.
In a 2026 forecast, Goldman Sachs analysts said they expect that momentum to carry forward, projecting growth in investment banking fees and a pickup in spending by financial sponsors.
Matthew Toole, LSEG’s director of deals intelligence, said some private equity firms are approaching a traditional exit window for companies they bought during the pandemic, setting the stage for more sponsor-driven sales.
“Coming off of the year that we’ve had from an investment banking perspective — the second-largest year on record for announced M&A, the largest year on record for global debt, and also a record year for syndicated lending — I think you’re going to see pretty significant growth in the investment banking fee pool,” Toole said.
That resurgence is intensifying hiring competition. Speaking at a financials conference Goldman hosted in December, Denis Coleman, the firm’s chief financial officer, acknowledged the pretty penny that it was spending to hang onto its top performers.
“We want to make sure that we’re in a position to pay very competitively, particularly for our very best people,” he said.
Jeanne Branthover, vice chairman of DHR International and global head of the firm’s financial services and fintech practice, told Business Insider that deal momentum is translating directly into hiring pressures. “What happens is the best talent is always going to be recruited,” she said. “That is always the case when a market is good.”
Credit risks remain contained — for now
Credit quality is another closely watched theme.
“Credit is still fine, certainly we’re on a cockroach alert,” Mayo said, referencing a comment made by JPMorgan CEO Jamie Dimon in October. The collapse of subprime auto-lenders Tricolor Holdings and auto-parts company First Brands last fall raised questions about the health of the credit market, and during his firm’s third-quarter earnings call, Dimon said, “When you see one cockroach, there’s probably more.”
Mayo added that a major surprise at large banks would be unlikely, but cautioned that credit cycles often begin with isolated problems, particularly at midsize firms. Leaders in the private credit industry have pushed back on claims that private lending is behind rising credit stress, saying some recent high-profile bankruptcies reflect risks tied to loans originated and syndicated by banks rather than held by private lenders.
Still, Mayo offered a note of caution: “When you’re bullish, this is the time when bad loans are made.”
Goldman’s AI push
At Goldman Sachs, attention is trained on OneGS 3.0, the latest iteration of the company’s cross-bank initiative to maximize returns across business lines.
Mayo pointed to Goldman Sachs 3.0 as one of the most interesting new data points this earnings season.
The program, announced last fall, is designed as a multi-year effort to boost profitability and productivity by leveraging AI. Goldman has said the initiative includes head count discipline and limited role reductions.
AI: from early-stage to mission-critical
If the past few years represented AI’s Wild West — marked by widespread experimentation and spending — this year is about formalizing what works.
Sumeet Chabria, CEO of advisory firm ThoughtLinks and a former senior Wall Street technology executive, said AI has moved from isolated pilots to a core priority. He anticipates more detail from banking chiefs on how their firms are deploying AI to enhance results.
“Every line of business’ strategic plan will have clarity on how they’re using AI and how they’re going to drive value, for sure,” he said. “The focus has moved from projects and programs or pilots to enterprise — to AI being a strategic priority for all the top banks.”
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