It is a golden moment for banks.
Trading profits are at record highs, and so are employee bonuses. Mergers, acquisitions and other deals are piling up at the second-fastest pace in at least a decade, producing billions of dollars in fees. And after they operated for nearly two decades in what one banker described as a regulatory “straitjacket,” the Trump administration is making it easier for banks to expand and take more risks.
“The stars are aligning for banks in a way that hasn’t been seen in multiple decades,” Citi analysts wrote in a research note this month.
The good times for banks represent a flip of fortunes. Since the 2008 financial crisis, Wall Street’s biggest paydays have been earned by private equity and private credit firms, making often high-risk investments with the promise of high returns.
Lately, many of those private equity firms have struggled to raise money as the industry has delivered lackluster investment returns. At the recent Milken Institute Global Conference in Los Angeles, a confab popular with the private equity set, the chief executive of one giant investment firm compared the vibe, with some hyperbole, to the final days of Sodom and Gomorrah.
It’s also a tenuous time for many international businesses, with airlines going bankrupt, global ship traffic choked, inflation on the rise and artificial intelligence roiling industries.
Many banks, by contrast, have followed the trajectory of Citizens Bank, a once sleepy Providence, R.I., institution that has been expanding rapidly, and seen its share price rise by more than 50 percent over the past year.
