Goldman Sachs Raises Dividend 13% After Strong Q4 M&A Year
Investment bank posts $17.18 billion full-year profit as dealmaking dominance continues. Board hikes quarterly payout to $4.50 from $4.00.
Goldman Sachs closed out 2025 as Wall Street's M&A kingpin.
The investment bank reported full-year net earnings of $17.18 billion on revenue of $58.28 billion, capping a year where it advised on more mega-deals than any competitor. Q4 alone delivered net revenues of $13.45 billion and earnings of $4.62 billion.
The board responded by hiking the quarterly dividend to $4.50 from $4.00—a 12.5% increase that signals confidence in the firm's capital position and earnings trajectory. Goldman shares rose modestly in premarket trading.
The Apex Predator of M&A
Goldman advised on 38 of the 68 global deals exceeding $10 billion in 2025. That's more than half of the mega-deal market, a dominance that hasn't been seen since the pre-financial crisis era.
The firm doesn't just win mandates—it wins the mandates that matter. Complex cross-border transactions, contested situations, and deals requiring regulatory navigation all tend to flow to Goldman's advisory practice. That franchise is nearly impossible to replicate.
Investment banking fees drove the year's outperformance. After a two-year drought that began in 2023, M&A activity roared back in 2025 as private equity sponsors put record dry powder to work and corporate boards gained confidence in the economic outlook.
Trading Held Its Own
Markets revenue remained strong, though not the blowout seen at JPMorgan earlier this week. Goldman's FICC and equities desks benefited from elevated volatility around the election and year-end positioning.
The firm's asset and wealth management division continued its steady contribution, though it remains smaller relative to peers like Morgan Stanley. Goldman's strategic pivot toward fee-based wealth management—accelerated under CEO David Solomon—is progressing but hasn't yet transformed the earnings mix.
Expenses Rose Too
Operating expenses hit $37.54 billion for 2025, up 11% from 2024. Compensation costs drove most of the increase, reflecting both headcount growth (2% higher) and the reality that strong performance means bigger bonus pools.
The efficiency ratio ticked up to 64.4% from 63.1%. That's not alarming for an investment bank in a strong revenue year—the absolute dollars matter more than the ratio when dealmaking is booming. But it's worth watching as management balances growth investments against cost discipline.
What Comes Next
Goldman enters 2026 with momentum. The M&A pipeline remains robust, with several large transactions announced in Q4 expected to close in the first half of the year. IPO activity is improving. Debt capital markets stay active.
The dividend hike—announced alongside earnings rather than at the usual June timeline—suggests management sees sustainable earnings power rather than a cyclical peak. Goldman's board doesn't raise payouts frivolously.
For traders watching the bank earnings cycle, Goldman's results confirm what JPMorgan suggested Monday: capital markets activity is back, and the banks with advisory and trading exposure are the primary beneficiaries.
Morgan Stanley reports later today. If it matches Goldman's strength, the narrative shifts from "bank earnings" to "investment bank earnings"—a meaningful distinction given how differently the money-center banks have performed this cycle.