Wall Street’s biggest banks reported third-quarter results on October 13 and 14. Investment banking fees rose at most of them, led by Goldman Sachs at 21%, while Bank of America’s fell 11%. Compensation grew faster than headcount, and pay per employee rose at every bank we could measure. On the pipeline, banks described a pause in activity in late September but still called their backlogs robust heading into the fourth quarter. Here is what the numbers mean for bankers and the firms that hire them.
The Numbers at a Glance
| Bank | IB fees (Q3 2026) | Change vs. Q3 2025 | Comp & benefits change | Headcount change |
|---|---|---|---|---|
| Goldman Sachs | $3.22 billion | +21% | +9% ($5.12 billion) | −2% (47,500) |
| JPMorgan | $3.0 billion | +14% | Not broken out (total expenses +12%) | Not disclosed; cited front-office hiring |
| Morgan Stanley*** | $2.16 billion | +2% | +7% ($8.0 billion) | +2% (83,728) |
| Bank of America | $1.80 billion | −11% | +4% ($10.97 billion) | −2% (209,911) |
| Citi* | $1.35 billion | +9% | +1% ($7.53 billion) | −4% (217,000 direct staff) |
| Wells Fargo** | $611 million | +10% | Not broken out (higher personnel expense) | −8% |
*Citi reports “investment banking revenues” rather than fees, a metric it adopted in the second quarter. **Wells Fargo figure is investment banking fees in its Corporate and Investment Banking segment. ***Morgan Stanley figure is investment banking revenue in its Institutional Securities segment, the figure Reuters reports; the firmwide investment banking line was $2.36 billion, up 4%. Compensation and headcount are firmwide figures for every bank, so they include businesses well beyond investment banking.
Deal Fees: Up at Most Banks, Led by Advisory
Goldman Sachs had the strongest quarter. Its investment banking fees rose 21% to $3.22 billion, and advisory fees of $1.65 billion were up 18% and a quarterly record. Equity underwriting rose 43% and debt underwriting 15%.
Advisory was the common thread at the banks that grew. JPMorgan’s fees rose 14% to $3.0 billion, which the bank credited to “strong performance across products, notably in advisory.” Morgan Stanley’s investment banking revenue rose 2% to $2.16 billion: advisory revenue rose about 30% on more completed M&A in the Americas, but lower IPO and block activity pulled its equity underwriting down about 19%. Wells Fargo’s investment banking fees rose 10%, and CEO Charlie Scharf said its M&A revenue was up 30%. At Citi, equity underwriting jumped 77% while advisory slipped 4%.
Bank of America was the exception. Its fees fell 11% to $1.80 billion, with advisory down 19% and debt issuance down 14%, in line with the drop of more than 10% that management had warned of in September. The bank also slipped to fourth from third in Dealogic’s global investment banking league table for the first nine months of the year, according to Reuters.
The independents are seeing the same advisory strength. Jefferies, whose fiscal third quarter ended August 31, reported a record $818 million in advisory revenue, up 25%, and total investment banking revenue up 17%.
The broader market is still strong. Dealogic puts global investment banking revenue at $91 billion for the first nine months of 2026, up 16% from a year earlier.
Where the Strength Is, Product by Product
Firmwide fee totals hide big differences between products, and those differences matter for which groups are busiest and best paid.
- M&A advisory: the strongest product. Advisory rose 18% at Goldman (a record), about 30% at Morgan Stanley, 30% at Wells Fargo and 25% at Jefferies (a record), and it led JPMorgan’s growth. The weak spots were Bank of America (down 19%) and Citi (down 4%).
- Equity capital markets: strong but uneven. Equity underwriting rose 77% at Citi, 69% at Jefferies and 43% at Goldman, but fell about 19% at Morgan Stanley on fewer IPOs and block trades.
- Debt capital markets and leveraged finance: the softest. Debt underwriting fell 14% at Bank of America, about 3% at Citi and Morgan Stanley, and about 29% at Jefferies. Wells Fargo said lower leveraged finance revenue partly offset its gains. Goldman was the exception, with debt underwriting up 15%.
For bankers, that means M&A and sector coverage teams at the banks that grew advisory are in the strongest position going into bonus season, while leveraged finance and DCM teams face a tougher comparison, especially as rates rise.
Compensation: Pay Is Rising Faster Than Headcount
Every bank that broke out compensation spent more on it than a year ago, while headcount fell at four of the five banks that disclosed it:
- Goldman Sachs: compensation and benefits rose 9% in the quarter and 17% year to date, which the firm tied to “improved operating performance,” while headcount fell 2% from a year earlier.
- Morgan Stanley: compensation rose 7% while headcount grew 2%.
- Bank of America: compensation rose 4% even as headcount fell by about 3,500 and investment banking fees declined.
- Citi: compensation edged up 1% while direct staff fell about 10,000, or 4%.
- Wells Fargo: personnel expense rose in its Corporate and Investment Banking unit while firmwide headcount was down 8% as part of its efficiency push.
- JPMorgan: expenses rose 12%, driven by revenue-related costs, “front office hiring and wage inflation.”
Pay per Employee
Dividing each bank’s quarterly compensation by its headcount gives a rough measure of pay per employee. It rose at all four banks that disclose both numbers:
| Bank | Q3 2026 comp per employee | Q3 2025 comp per employee | Change |
|---|---|---|---|
| Goldman Sachs | $107,800 | $96,900 | +11% |
| Morgan Stanley | $95,500 | $90,300 | +6% |
| Bank of America | $52,300 | $49,300 | +6% |
| Citi | $34,700 | $32,900 | +5% |
Prospect Rock calculation: quarterly compensation and benefits divided by period-end headcount (direct staff for Citi). These are firmwide averages for one quarter, including bonus accruals, and are not annual pay for bankers.
Goldman’s 11% jump stands out, and it matches its fee growth. Goldman’s compensation came to about 27% of net revenues in the quarter and about 30% for the first nine months, by our calculation. At Jefferies, where bankers make up a much larger share of staff, the compensation ratio rose to 53.7% from 52.9%.
For bankers, the pattern points to more pay per head. That is consistent with what we noted in our bonus season preview: firms are accruing for a strong year. One caution is that these are firmwide figures, so the headcount cuts at Citi, Bank of America and Wells Fargo may be concentrated outside the front office.
Headcount: Fewer People Overall, but Still Competing for Bankers
Firmwide headcount is shrinking at most of the big banks, but the front office tells a different story. JPMorgan specifically cited front-office hiring as a driver of higher expenses. Goldman’s headcount rose 3% from the end of June to 47,500, a jump that typically reflects new analyst classes arriving over the summer, even though it is still 2% below a year earlier.
Management commentary points the same way. Goldman CFO Denis Coleman told analysts there is “a very, very strong bid for the very, very best people,” and Citi CEO Jane Fraser said the bank is “continuing to invest responsibly in high quality talent,” crediting new hires with helping win mandates.
The reductions at Citi (about 10,000 fewer direct staff), Wells Fargo (down 8%) and Bank of America (about 3,500 fewer) are part of broader efficiency programs. For investment bankers, the more useful signal is where banks are adding senior coverage and which product groups are growing, not the firmwide total.
The Pipeline and M&A Outlook: A Pause, Not a Stall
The forward-looking picture is more nuanced than the strong quarter suggests. Activity slowed in late September, but the banks still describe healthy pipelines.
What the banks said
- Goldman Sachs: Its investment banking backlog decreased from the end of the second quarter, “primarily driven by a decrease in Advisory,” and was slightly lower than at the end of 2025. That decline largely reflects deals closing and turning into record advisory fees. On the call, CEO David Solomon said, “Our backlog is incredibly robust,” and that companies are “very front-footed” strategically.
- JPMorgan: CFO Jeremy Barnum said activity slowed in “the second half of September,” as markets took “a breath and a pause to make sure buyers and sellers can meet on valuation terms.” He added that “the overall environment is robust and supportive, and there is a lot of business that wants to get done.” CEO Jamie Dimon called the pipeline “like an accordion. It can open and close pretty quick.”
- Citi: CEO Jane Fraser called it “a solid pipeline, to say the least,” and said the bank expects “an above average wallet even if it pulls a bit back from the 2026 near-record levels.”
- Morgan Stanley: Its role on recent large mandates points to a busy advisory book. Reuters reported that the firm was lead financial adviser on Uber’s deal to buy Delivery Hero, valued at $14.8 billion in equity, and on GE Aerospace’s $11.75 billion acquisition of Consolidated Precision Products, and that it has underwriting roles in the expected IPOs of Anthropic and OpenAI.
- Bank of America: Its 11% fee decline came after management warned in September of a drop of more than 10%. Reuters reported that the bank was not well positioned in some of the businesses that saw more activity this quarter, and noted that fees can be lumpy because deal timing shifts with market conditions and regulatory approvals.
- Jefferies: In late September, management said it was “very optimistic about the balance of 2026 and our momentum heading into 2027.”
The market data shows the late-quarter slowdown. Global deal value fell 41% from the second quarter to $993 billion, according to LSEG data cited by Reuters, and several companies pulled planned IPOs, citing tough market conditions. Announcements lead fees, so a slower quarter for new deals can show up in fees over the next few quarters.
Private equity: pent-up exits
Sponsors remain the swing factor. Solomon said sponsors “have been slow to monetize and turn over the capital portfolios from the 2020 and 2021 vintages,” and Fraser said they “have continued to sit on aged assets.” That backlog of unsold portfolio companies is a source of future sale processes, IPOs and financing work if markets stay stable, which matters most for financial sponsors coverage and leveraged finance teams.
IPOs: selective, with some very large deals ahead
Fraser said the IPO market “continues to be a bit more selective.” Solomon said September’s IPOs reflected valuation expectations set in conversations in May and June. Dimon was more upbeat on Europe, where he said the pipeline is “quite healthy and even more so in IPOs than we would have thought.” If large expected listings such as Anthropic and OpenAI come to market, they would be significant fee events for the banks underwriting them.
Rates: the main risk
The Federal Reserve raised its benchmark rate in September, and 10-year Treasury yields approached their highest level in almost a quarter century earlier this month. Fraser said the strong debt pipeline is partly driven by “clients acting before rates move higher and stay there for longer,” which could pull some issuance forward. Solomon said the bigger headwind is sudden volatility, “when you have very, very abrupt moves,” and that he is “not overly concerned” about the rate environment in the short term. He also said he does not see the midterm elections significantly affecting activity.
What It Means for You
For bankers considering a move. Compensation accruals are up, so year-end payouts should be strong at the banks with the best fee growth. That makes timing important: most lateral moves are best planned now and executed after bonuses are paid. Advisory-heavy groups at firms that grew fees this quarter are in the strongest position to hire, and Goldman’s own CFO describes strong competition for top talent.
For bankers in groups that had a tough quarter. Where fees fell, as at Bank of America, or in softer products such as leveraged finance, bonus pools in the affected groups may be tighter. That can make a well-timed conversation with other firms worth having. If sponsors start selling their older portfolio companies, financing teams could be among the first to benefit.
For hiring managers and firms. Banks expect a healthy fourth quarter, but a pause in new announcements could make them more selective in 2027, even as they keep paying for proven senior talent. Candidates will know which banks had strong quarters and will price that into offers and buyout requests, so firms planning to hire in the first half of 2027 should set budgets early.
What to Watch
- Fourth-quarter deal announcements. They will show whether the late-September pause was a breath or a turn.
- Sponsor exits. Sales and IPOs of 2020 and 2021 vintage portfolio companies would add work across M&A, ECM and leveraged finance.
- Large IPOs. Timing of the biggest expected listings will shape ECM fees and league tables into 2027.
- Fed policy and Treasury yields. Abrupt moves in rates are the biggest risk to financing and M&A.
- Year-end compensation decisions. Bonus pools are set late in the year, and a weak fourth quarter could temper them.
- Front-office headcount. Watch for hiring or cuts in specific coverage groups, which firmwide totals do not show. Our guide to reading a bank earnings report like a recruiter covers which lines to check.
- Jefferies’ fiscal fourth quarter. Its results, covering September through November, will be one of the first reads on whether the slowdown in announcements is reaching fees.
Sources
- Goldman Sachs, third quarter 2026 earnings results (SEC Form 8-K)
- Goldman Sachs, third quarter 2026 earnings results, full release (SEC)
- Goldman Sachs, Q3 2026 earnings call transcript (The Motley Fool)
- JPMorgan Chase, Q3 2026 earnings call transcript (The Motley Fool)
- Citi, Q3 2026 earnings call transcript (The Motley Fool)
- Bank of America, third quarter 2026 financial supplement (SEC Form 8-K)
- Reuters via BNN Bloomberg, “BofA misses profit estimates on capital market weakness” (10/14/2026)
- Citigroup, third quarter 2026 financial supplement (SEC Form 8-K)
- Morgan Stanley, third quarter 2026 results (SEC Form 8-K via StockTitan)
- Reuters via BNN Bloomberg, “Morgan Stanley beats quarterly profit estimates on equity trading strength” (10/14/2026)
- Wells Fargo, third quarter 2026 earnings release (SEC Form 8-K)
- Jefferies, third quarter 2026 financial results (Business Wire, 9/28/2026)
- Reuters via Investing.com, “Goldman Sachs beats quarterly profit estimates on equities strength” (10/13/2026)
- Bloomberg, “Bond Traders Hand Crown to Equities as US Banks Deliver Results” (10/13/2026)
- Bloomberg, “Goldman’s Equity Traders Post Big Haul as Credit, Rates Miss” (10/13/2026)
- Dealogic (ION Analytics), “Investment bankers pocket almost USD 100bn revenues as deal making soars” (10/7/2026)