Goldman Sachs profit surges as investment banking, trading fuel bumper quarter
By Manya Saini, Noor Zainab Hussain and Syed Azhar
(Reuters) – Goldman Sachs (GS:) posted its best profit since the third quarter of 2021, driven by bankers who brought in more fees from deal-making, debt sales and stronger trading, sending its shares up 3% before the bell.
In the fourth quarter ended Dec. 31, profit rose to $4.11 billion, or $11.95 per diluted share, from $2.01 billion, or $5.48, a year earlier, the Wall Street giant said on Wednesday.
Banking executives expect stronger deals this year as the U.S. Federal Reserve cuts interest rates and President-elect Donald Trump’s business comments inspire optimism among investors.
“We are very pleased with our strong results for the quarter and year,” CEO David Solomon said in a statement in our company growth strategy.”
Goldman’s investment banking fees rose 24% to $2.05 billion in the fourth quarter, driven by a debt underwriting account that benefited from sales of strongly leveraged financials and corporate bonds.
A recovery in the mergers and acquisitions industry, as well as renewed activity in capital and debt markets, boosted results for Wall Street’s leading banks in the second half of 2024.
In investment banking, equity and debt underwriting revenues grew 98% and 51%, respectively, in the fourth quarter, driven by secondary and initial public offerings, private placements and leveraged finance activity.
Its advisory revenue fell 4% in the quarter but rose for 2024 on a rise in completed deals, the bank said.
According to Dealogic, total investment banking revenue rose 26% to $86.8 billion in 2024, with North America up 33% from a year ago.Goldman earned is the second highest income in banks in the world.
Last month, Solomon told a Reuters conference that deals in stocks, mergers and acquisitions could exceed the 10-year average in 2025.
Revenue at Goldman’s asset and wealth management division rose 8% to $4.72 billion, while revenue at its global banking and markets division rose 33% to $8.48 billion in the fourth quarter.
The bank’s stock traders continued to lead the broader stock market in the final three months of 2024, with revenue up 32% to $3.45 billion.
U.S. stocks hit record highs, buoyed by optimism about the new administration’s economic policies combined with low interest rates.
English