Wall Street firms poised for strong Q1
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Wall Street's big banks, including Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley, and Wells Fargo & Co., are expected to report improved first-quarter earnings driven by a surge in revenues from investment banking, according to Moody's Investors Service. Moody's expects the banks to announce stronger earnings as investment banking revenues are up significantly from the same quarter a year ago. Debt issuance and equity follow-on issuance have increased, which should boost investment banking revenue. However, the initial public offering market remained weak, and merger and acquisition activity was flat. Revenues from trading are expected to be lower despite strong trading volumes. European banks may have more muted first-quarter results due to ongoing restructurings and muted growth in Europe. Wall Street firms with stronger equity capital market franchises are best-positioned to benefit from a recovery if improved market sentiment translates into higher business volumes. Higher equity prices should have boosted fee revenues at firms with large wealth management businesses. The growing private credit market represents a rising source of revenue for banks that view this business as compatible with their risk policies, with JP Morgan and Goldman Sachs leading the way.

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