Major US banks add 600 billion dollars in market value during 2025

Major US banks added $600 billion to their market value in 2025, driven by the Trump administration’s efforts to deregulate the sector and a resurgence in investment banking.

According to data from S&P Global, the combined market capitalization of the six largest US banks by assets—JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley—rose from $1.77 trillion at the end of last year to $2.37 trillion at Tuesday’s close.

The total market value of the six most valuable European banks is only $1 trillion, highlighting the widening gap between US banks and their European rivals that has persisted since the financial crisis.

US banks are on track to outperform the S&P 500 index for the second consecutive year. Following the 2008 financial crisis, the largest US banks struggled with regulations that dampened investor interest in the sector.

However, these banks are now benefiting as the Trump administration has begun rolling back many regulations. Gerard Cassidy, a banking analyst at RBC, stated, “Do not underestimate how important this regulatory change is for stock prices. The sector’s profitability was significantly reduced by the financial crisis because banks were rightly forced to bring in much more capital.”

Since the beginning of this year, US regulators have proposed allowing higher leverage ratios for the country’s largest banks, revised the annual banking stress tests used to determine capital requirements, and rescinded lending guidance for riskier loans.

Banks also anticipate that the final implementation of global capital rules, known as Basel III Endgame, will be much less burdensome than the initial proposal introduced by the Joe Biden administration in 2023.

“They all have excess capital because they had already accumulated it according to the other proposal,” Cassidy said.

Capital is available to absorb potential losses, but it can also be used to fund business activities and for shareholder payments such as share buybacks and dividends.

Some opponents of lighter regulation, such as Democratic Senator Elizabeth Warren, have expressed concerns about the scale of financial deregulation. However, investors so far appear largely unconcerned about the banks’ increased appetite for risk.

Saul Martinez, head of US financial equity research at HSBC, noted, “This is a risk that could emerge in the future. But given how little the banks’ balance sheets have grown, there is a sense that there is room for more risk-taking.”

Citi shares were the best performers among the big six US banks, gaining approximately 70% in 2025 as years of efforts to simplify the bank and reduce costs bore fruit. This month, the bank traded above the total value of its parts for the first time since 2018.

Goldman shares also increased by nearly 60% in 2025, reaching record levels thanks to a recovery in its core investment banking business—which bankers expect to accelerate further in 2026—and a long-running boom in trading.

Industry monitor Crisil Coalition Greenwich predicts that sector-wide revenues from both equity and fixed-income trading will exceed previous peaks this year, generating $92 billion from equity trading and $163 billion from fixed-income trading.

Martinez remarked, “Right now, this situation looks almost too good to be true. Underlying conditions are good. I think the real question is how much of this is already priced in.”

American banks had also reported significant profits last October.