As 2025 unfolds, the banking and capital markets sector is entering a promising phase that calls for a more proactive and strategic growth agenda. Favorable macroeconomic indicators, such as a growing US economy, declining benchmark interest rates, consistent loan demand, and rising trading volumes, have created a strong foundation for expansion.

According to PwC, the US bank net interest income is projected to rise by 5.7% year-over-year, a notable improvement compared to the stagnation of the prior year. This financial momentum offers banks an opportunity to reassess and accelerate their growth strategies, including entering new markets, pursuing acquisitions, or expanding relationships with existing clients.

Political developments are also shaping a more conducive environment for financial institutions. The Republican victory in the 2024 US elections has raised expectations for deregulation and pro-growth economic policies. If these reforms materialize, they may reduce compliance burdens and encourage capital raising, particularly through public markets. However, firms must be prepared to respond to increased demand.

Looking ahead, while 2025 is expected to bring change, a recession in the US appears unlikely. Assuming this outlook holds, it is a good time for banks and capital markets firms to take action. Institutions that leverage high-quality data, skilled personnel, and modern tech will be better positioned to lead in an increasingly digital and dynamic financial landscape.

With that in mind, let’s take a look at the 10 best Goldman Sachs stocks to buy that are also on Wall Street’s radar.

Our Methodology 

We analyzed the Q1 2025 portfolio of Goldman Sachs and identified 10 bank stocks that received coverage from Wall Street analysts and mainstream media outlets in June 2025. These bank stocks were also favored by top hedge funds in the first quarter of 2025, as per Insider Monkey’s Q1 2025 database.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

10. The Bank of Nova Scotia (NYSE:BNS)

Goldman Sachs’ Stake Value: $475,475,313

Number of Hedge Fund Holders: 19

The Bank of Nova Scotia (NYSE:BNS) is one of the best Goldman Sachs bank stocks. On June 9, Fitch Ratings maintained the Bank of Nova Scotia’s long-term and short-term issuer default ratings at ‘AA-’ and ‘F1+’, respectively, maintaining a stable outlook.

These ratings indicate the constraints in Scotiabank’s operating environment, reflected by its average operating environment score of ‘aa-’. This score factors in the risks and revenue from primary end markets, such as Canada, the United States, Chile, Mexico, Peru, and Colombia.

BNS maintains a leading retail banking position in Canada. Scotiabank is working on a five-year plan launched in December 2023 to grow its core businesses, strengthen relationships with clients, and improve how the bank operates. As part of this plan, BNS bought a 14.9% stake in KeyCorp (NYSE:KEY) and simplified its operations in Latin America by exiting Colombia, Costa Rica, and Panama.

Fitch observed that, given its significant presence in Mexico, BNS could feel more of an impact from new US tariffs than other Canadian banks. Broader economic challenges in Mexico and Canada could also put pressure on the quality of its loan book. In Q2 2025, the percentage of impaired loans rose to 90bps, up from 83bps the year before, mostly due to weaker performance in Canadian retail and commercial lending. Credit quality has been a consistent challenge for BNS compared to other domestic banks, again tied to its international exposure.

Revenue at BNS has improved due to better loan management and stronger margins, but near-term profit pressure remains as the bank continues to realign its operations. To guard against tariff-related risks, it has increased loan-loss provisions. Capital levels are solid, with a CET1 ratio of 13.2%, providing a strong buffer in uncertain conditions.

Fitch does not expect a ratings upgrade soon. A more optimistic outlook would require lower exposure to emerging markets and reduced risk from Canadian household debt and housing.

9. UBS Group AG (NYSE:UBS)

Goldman Sachs’ Stake Value: $482,643,005

Number of Hedge Fund Holders: 33

UBS Group AG (NYSE:UBS) is one of the best Goldman Sachs bank stocks. On June 9, UBS maintained a Neutral rating on UBS, with a price target of CHF26.90. Analysts talked about the Swiss Federal Council’s newly announced proposals, introduced following the Credit Suisse fallout and a comprehensive review of Switzerland’s ‘too big to fail’ regulatory framework.

The proposals introduce an incremental CET1 capital requirement of $26 billion, landing at the upper end of market expectations. However, the outlined transition period of six to eight years post-implementation provides UBS with a meaningful runway to meet the requirement properly.

Citi analysts noted that the extended transition timeline alleviates near-term uncertainty. In their view, UBS is well-positioned to address the incremental capital requirements without disrupting its capital return strategy, including dividends and share buybacks.

However, analysts cautioned that the proposals remain subject to consultation and legislative review, introducing potential for revisions. They also highlighted concerns around UBS’s relative earnings momentum, which continues to trail peers due to sustained weakness in net interest income.

UBS Group AG (NYSE:UBS) is a global financial services firm offering a wide range of solutions for individuals, businesses, and institutions, including wealth management, personal and corporate banking, asset management, and investment banking.