Here are four key points to keep an eye on as major US banks release their earnings reports

Key Developments as Major US Banks Prepare to Announce Q4 Results

• Leading American banks are set to release their fourth-quarter financial results starting Tuesday, with JPMorgan leading the way.
• Deal activity saw a resurgence in 2025, fueling heightened rivalry among firms for both deals and skilled professionals.
• Industry experts highlight credit quality and artificial intelligence strategies as central topics to monitor.

As the largest institutions on Wall Street gear up to unveil their fourth-quarter earnings next week, competition is ramping up across nearly all business segments—from deal execution and talent acquisition to technological innovation. The earnings season kicks off with JPMorgan Chase on Tuesday, followed by Bank of America and Citi on Wednesday, and then Goldman Sachs and Morgan Stanley on Thursday.

This surge in competition is influencing the perspectives of investors, analysts, and executives as they look ahead. Mike Mayo, a veteran analyst at Wells Fargo, remarked in an interview that banks are now facing their fiercest battle in years to win new business.

“There’s a renewed energy in the industry,” Mayo observed, noting that competition has reached its highest point since before the global financial crisis. Banks are aggressively pursuing opportunities across advisory, investment management, and consumer banking. Even before the earnings reports are released, there are already positive signs—especially regarding compensation.

Alan Johnson, who leads the compensation consulting firm Johnson Associates, shared that early feedback from insiders at firms that have already disclosed bonus plans suggests a robust year. “Banking and trading are emerging as the top sectors for bonuses this year,” Johnson said. He also noted that investment banking advisory bonuses are trending higher than anticipated, with increases reaching up to 20% compared to last year.

As the reporting season begins, analysts point to four major trends to keep an eye on.

Deal Activity Remains Strong

Despite a turbulent start to the year, marked by trade tensions and market swings, dealmakers ended 2025 on a positive note. Data from LSEG shows that global M&A value climbed roughly 45% year-over-year, even though the total number of deals dipped slightly.

Looking ahead to 2026, analysts at Goldman Sachs expect this momentum to persist, forecasting further growth in investment banking revenues and increased spending by financial sponsors.

Matthew Toole, who oversees deals intelligence at LSEG, pointed out that many private equity firms are nearing the typical exit period for companies acquired during the pandemic, which could lead to more sponsor-driven transactions.

“Following a year that was the second-best on record for announced M&A, a record year for global debt issuance, and unprecedented syndicated lending, I anticipate substantial expansion in investment banking fees,” Toole commented.

This uptick in dealmaking is also fueling a race for talent. At a December financial conference, Goldman Sachs CFO Denis Coleman acknowledged the significant investments being made to retain top performers. “We’re committed to offering highly competitive compensation, especially for our most valuable employees,” he stated.

Jeanne Branthover, vice chair at DHR International and head of its financial services and fintech division, told Business Insider that the surge in deal activity is directly increasing demand for skilled professionals. “The best talent is always in demand when the market is strong,” she said.

Credit Risks: Stable but Under Scrutiny

Credit quality remains a focal point for the industry.

“Credit conditions are still healthy, though we’re keeping a close watch,” Mayo said, referencing a remark by Jamie Dimon, CEO of JPMorgan, from October. The failures of subprime auto lender Tricolor Holdings and auto-parts supplier First Brands last autumn have raised concerns about the broader credit environment. During JPMorgan’s third-quarter earnings call, Dimon warned, “When you see one cockroach, there’s probably more.”

Mayo believes that while a major surprise at the largest banks is unlikely, credit cycles often start with isolated issues, especially among mid-sized institutions. Leaders in the private credit sector have disputed claims that private lending is the main driver of rising credit stress, arguing that recent bankruptcies are more closely tied to loans originated and syndicated by banks.

Nonetheless, Mayo cautioned, “Periods of optimism are often when risky loans are made.”

Goldman Sachs Accelerates Its AI Strategy

Goldman Sachs is focusing on OneGS 3.0, its latest cross-divisional initiative aimed at maximizing returns through advanced technology.

Mayo identified the rollout of Goldman Sachs 3.0 as a key development to watch this earnings season.

Launched last fall, the program is a multi-year plan to enhance profitability and efficiency by leveraging artificial intelligence. The initiative also emphasizes disciplined hiring and targeted staff reductions.

AI Moves from Experimentation to Core Business

While previous years saw banks experimenting with AI, this year is about implementing proven strategies on a larger scale.

Sumeet Chabria, CEO of ThoughtLinks and a former senior technology executive on Wall Street, noted that AI has evolved from isolated pilot projects to a central business priority. He expects bank leaders to provide more details on how they are integrating AI to drive results.

“Every business unit will have a clear strategy for using AI to create value,” Chabria said. “The emphasis has shifted from small-scale pilots to making AI a strategic imperative for all major banks.”

For further details, read the original article on Business Insider.