In this article, Goldman Sachs reported fourth-quarter results on Wednesday that exceeded expectations due to stronger-than-expected trading revenue. The bank’s profit nearly doubled from the previous year to $4.11 billion, or $11.95 per share, as revenue increased and expenses decreased. Revenue rose by 23% to $13.87 billion, driven by higher equities and fixed income trading revenue, as well as improved investment banking results.
During morning trading, the company’s shares surged by more than 5%. Equities trading brought in $3.45 billion in revenue, surpassing the StreetAccount estimate by approximately $450 million. Fixed income trading revenue reached $2.74 billion, exceeding estimates by nearly $300 million. Investment banking fees of $2.05 billion were in line with expectations.
The asset and wealth management division of the bank also performed well, with revenue increasing by 8% to $4.72 billion, surpassing estimates by $560 million. CEO David Solomon expressed optimism, stating, “With an improving operating backdrop and growing CEO confidence, we are harnessing the power of One Goldman Sachs to continue to serve our clients with excellence and create further value for our shareholders.”
Goldman Sachs has benefited from a resurgence in Wall Street deals, with its shares rising by almost 50% last year, outperforming its major bank competitors. The Federal Reserve’s easing cycle and the election of Donald Trump in November have raised expectations for mergers and stock deals.
For Solomon, the current situation contrasts sharply with the challenges faced a year earlier following a strategic shift away from consumer finance ventures. At that time, Solomon faced pressure to address internal concerns, including losses related to consumer finance and a slowdown in Wall Street deals due to rising interest rates and increased regulatory scrutiny.
On the same day, JPMorgan Chase reported its results, while Wells Fargo and Citigroup also announced their earnings. Bank of America and Morgan Stanley are scheduled to report their results on Thursday.
