Two of Wall Street’s largest banks have recorded one of their strongest quarters since the financial crisis, in a sign that the industry may be escaping the malaise that has gripped it for more than five years.

Goldman Sachs saw a return on equity of 14.7 per cent — the best in 18 quarters. Its quarterly profits were the highest in four years and it saw the biggest investment banking revenues since 2007.

Citigroup, whose chronic difficulties since the financial crisis have put pressure on chief executive Mike Corbat, also recorded its highest quarterly profit in more than 7 years, with net income up more than a fifth at $4.8bn. The bank is also approaching year-end targets for efficiency and profitability that until recently it had looked likely to miss.