Shanghai, 5 July 2026 – Major Wall Street banks are seeing a recovery in China after their mainland securities units posted record profits, supported by a trading boom and stronger cross-border market activity.
Goldman Sachs, Morgan Stanley and JPMorgan recorded stronger performance from their China securities operations in 2025, marking a turnaround after several years of slower momentum following the pandemic and amid a more cautious investment banking environment.
The recovery has been driven largely by brokerage, trading and cross-border activity rather than a broad revival in traditional dealmaking. This suggests that China remains a meaningful market for global banks, but the profit mix is shifting.
For global investment banks, China has long been viewed as a major strategic opportunity because of the size of its capital markets, savings pool and corporate financing needs. However, foreign banks have faced a difficult operating environment in recent years, shaped by slower economic growth, weak property sentiment, subdued initial public offerings and geopolitical uncertainty.
The latest profit rebound shows that market volatility can still create opportunities. Increased trading activity, stronger client hedging needs and cross-border flows have helped securities units generate better returns, even as investment banking revenues from listings and mergers remain under pressure.
JPMorgan’s China business has reportedly grown by about 20% annually over the past two years, reflecting stronger traction in selected activities. The gains point to the importance of scale, client relationships and the ability to provide trading, research and financing services across markets.
The performance of United States banks also contrasts with weaker results among some European rivals, with only selected players benefiting strongly from the trading-led recovery. This divergence suggests that foreign banks in China are not experiencing a uniform rebound. Success depends heavily on business mix, local execution and the ability to capture flows in the right segments.
China has allowed full foreign ownership of securities firms since 2020, giving global banks more control over their mainland operations. Yet regulatory openness alone has not guaranteed rapid growth. Foreign financial institutions still need to navigate local competition, policy cycles, capital-market reforms and shifting client demand.
The latest improvement therefore reflects a more selective recovery. Trading and brokerage activities are doing better, while advisory and underwriting businesses remain more sensitive to confidence, valuations and corporate expansion plans.
For Chinese capital markets, the rebound in foreign bank profits may be read as a sign of renewed activity in certain areas. However, it does not necessarily mean the broader financial-sector environment has fully normalised. Equity fundraising, outbound transactions and large-scale mergers remain affected by macro uncertainty and regulatory caution.
For Wall Street banks, the opportunity is to rebuild momentum without overestimating the pace of China’s recovery. Mainland operations can contribute meaningfully when market activity is strong, but earnings may remain uneven if dealmaking stays subdued.
The Ledger Asia Insights
The recovery of Wall Street banks in China highlights a crucial point for Asian investors: financial-sector rebounds are not always driven by traditional lending or dealmaking. In volatile markets, trading activity can become a major earnings engine.
This matters because China remains one of Asia’s most important financial markets despite its slower economic backdrop. Even when corporate confidence is weak, investor repositioning, hedging demand and cross-border flows can create profitable opportunities for banks with strong trading platforms.
The shift also shows how global banks are adapting to China’s changing capital-market landscape. Instead of relying mainly on IPOs, M&A and advisory fees, banks are increasingly depending on securities trading, brokerage services, derivatives, financing and institutional client flows.
For investors, this creates a more nuanced view of China exposure. A bank can benefit from market activity even when the broader economy remains under pressure. However, trading-led rebounds can be more cyclical and harder to predict than recurring fee income or sustained deal pipelines.
The contrast between stronger United States banks and weaker European rivals also suggests that scale and platform strength matter. Banks with deeper client relationships, broader product capabilities and stronger balance sheets may be better placed to capture market volatility.
For Southeast Asia, including Malaysia, the development is relevant because it reflects how capital-market activity can recover in phases. A full investment banking recovery often requires confidence in listings, acquisitions and corporate expansion. But trading, brokerage and flow businesses can improve earlier when market activity picks up.
The broader lesson is that China is not a simple growth story for foreign financial institutions. It remains a large opportunity, but one that requires patience, local knowledge and a diversified business model.
Wall Street’s improved China performance therefore signals cautious progress rather than a full return to the boom years. The next test will be whether stronger trading profits can be followed by a deeper revival in capital raising, advisory activity and long-term institutional participation.
