Last year was a banner year for Wall Street traders and investment bankers. Yet fourth-quarter earnings from Goldman Sachs and Bank of America show that the trading and advisory fee boom has not benefited everyone equally. The gulf between standalone investment banks and those with heavy exposure to consumer lending will continue to widen in 2021.

At Goldman, net income more than doubled in the last three months of 2020 to $4.5bn. The gain was powered by the all-important trading division, where revenues jumped 23 per cent to $4.3bn. Meanwhile, the rebound in mergers and acquisitions in the second half of the year lifted revenue from the investment banking division 27 per cent higher. Together, the two units pulled in about 70 per cent of Goldman’s total annual revenue.

The trend was more muted at BofA. The country’s second-biggest lender by assets only managed to muster a 7 per cent rise in revenue from its trading unit. JPMorgan and Citigroup reported 20 and 14 per cent increases from their own trading divisions on Friday.

Wall Street executives have cautioned that a repeat of last year’s fee and trading bonanza is unlikely. Conditions have thus far remained favourable. Both M&A and IPO activity have ticked up in the first few weeks of the year. since the start of 2021. Record debt sales last year should lead to more refinancing.

The same cannot be said for consumer banking, which accounted for more than a third of BoA’s revenue and profits last year. The problem is not just low interest rates. Consumer confidence remains shaky as the pandemic continues. While deposits at BofA were up sharply during the fourth quarter, both loans and credit card spending were down. Lending margins are being squeezed. There was a 16 per cent drop in net interest income during the last quarter. The new Biden administration will not change this overnight.

Banks with large main street operations will struggle to keep up with focused Wall Street rivals this year.

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