Goldman Sachs, Morgan Stanley, and JPMorgan's China Operations Hit Record Profits in 2025
0xBroomberg
Goldman Sachs, Morgan Stanley and JPMorgan all posted record net profits at their mainland China securities units in 2025, driven not by traditional investment banking but by trading and brokerage income — a structural shift in how Wall Street makes money in China.
Record profits — where did the money come from?
All three banks saw sharp increases in commission and fee income at their onshore securities subsidiaries, with trading and brokerage as the main engine.
JPMorgan said its China business has grown 20% a year for the past two years and expressed confidence in sustaining that pace.
This means → the profit engine has shifted from "helping companies list and do deals" to "trading on market swings" — they are earning volatility money, not financing money.
Why does volatility help the trading desk but hurt dealmaking?
Han Lin, China director at Asia Group Advisors, noted that slowing growth, policy shifts and trade friction have created volatility — exactly the soil trading desks thrive in.
In plain terms = more uncertainty means wider price swings, giving traders more opportunities to profit from spreads and hedging. M&A, by contrast, needs certainty — so it stalls.
This reflects a counterintuitive dynamic: uncertainty cuts opposite ways across business lines — trading desks feed on it, investment-banking teams fear it.
Why is investment banking still the weak spot?
Mainland China's IPO market remains subdued, and onshore M&A is dominated by local banks — leaving little room for foreign players.
Morgan Stanley is a rare exception: its onshore advisory revenue rose from RMB 123 million to RMB 312 million (about $46 million).
Goldman and JPMorgan's IB revenue stayed low. Cross-border fees — such as advising Chinese firms on overseas listings — are often booked by other entities, so onshore figures show only part of the picture.
Why didn't European banks capture the same upside?
HSBC's China securities unit saw net profit fall from RMB 169 million to RMB 102 million (about $15 million), despite commission income of RMB 611 million.
Deutsche Bank's joint venture Zhong De Securities (33% stake) widened its net loss to RMB 93 million, with both IB and trading revenue declining.
This means → the same market volatility that Wall Street banks monetised, European banks failed to capture — the gap is in trading capability and client networks, not in opportunity.
Why is UBS the exception among European banks?
UBS won approval for full ownership of its mainland securities business last year. Net profit grew more than fivefold; brokerage revenue reached RMB 1.3 billion (about $191 million), up RMB 800 million.
In 2024 UBS also sold the Credit Suisse China stake it inherited from the acquisition, completing the integration.
In plain terms = UBS got two things right at once: full-ownership licence (more control) + disposal of Credit Suisse legacy assets (lighter balance sheet) — enabling it to grow while peers struggled.
Can the good times last for foreign banks in China?
China has allowed foreign full ownership of onshore securities firms since 2020, but expansion into asset management remains an uphill battle — newly established foreign mutual-fund companies hold less than 1% combined market share.
US law firms are also pulling out, signalling that the broader operating environment has not improved across the board.
This reflects a key vulnerability: current profits depend heavily on trading, and trading depends on volatility — if markets enter a low-volatility phase, this profit engine could stall.
Content is for reference only, not financial advice.