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Goldman profits surge 150% from year ago on Wall Street rebound
Goldman Sachs (GS) reported that its second-quarter profits soared 150% from a year ago as investment banking surged, the latest signal that Wall Street is warming up after a two-year drought.
Net income was $3.04 billion, which beat analyst expectations. Its total revenues of $12.73 billion also rose 17% from a year ago.
The result gives CEO David Solomon more momentum following his most challenging year ever as boss.
A year ago he was grappling with a dealmaking slump, a costly exit from consumer banking and a series of high-profile departures from the firm.
Net income was $3.04 billion, which beat analyst expectations. Its total revenues of $12.73 billion also rose 17% from a year ago.
The result gives CEO David Solomon more momentum following his most challenging year ever as boss.
A year ago he was grappling with a dealmaking slump, a costly exit from consumer banking and a series of high-profile departures from the firm.
David Solomon, CEO of Goldman Sachs.
Goldman’s stock was up slightly in pre-market trading Monday. As of last Friday’s close, the stock had climbed 24% year to date.
It is up 114% since Solomon took over nearly six years ago.
"We are in the early innings of a capital markets and M&A recovery, and while certain transaction volumes are still well below their tenure averages, we remain very well positioned to benefit from a continued resurgence of activity," Goldman's Solomon said during its earnings call with analysts.
Goldman is the latest big bank to demonstrate it is benefitting from an investment banking rebound.
On Friday, JPMorgan Chase, Wells Fargo and Citigroup each posted sizable jumps in the revenue stream compared with the second quarter of last year.
The revival provided a boost to those banks at a time of rising challenges for their Main Street consumer operations.
Goldman is even more reliant on Wall Street for its performance.
Its investment banking fees rose 21% from a year ago, to $1.7 billion, led by big jumps in debt and equity underwriting. Advisory fees were also up, by 7%.
Goldman's investment banking performance did drop when compared to the first quarter. Fees dipped by 17%.
What propelled its second-quarter earnings higher from a year ago was Goldman's trading operations as well as its increased focus on asset and wealth management.
Goldman’s fixed-income trading revenue rose 17% year over year, while asset and wealth management revenues increased 27%.
It is up 114% since Solomon took over nearly six years ago.
"We are in the early innings of a capital markets and M&A recovery, and while certain transaction volumes are still well below their tenure averages, we remain very well positioned to benefit from a continued resurgence of activity," Goldman's Solomon said during its earnings call with analysts.
Goldman is the latest big bank to demonstrate it is benefitting from an investment banking rebound.
On Friday, JPMorgan Chase, Wells Fargo and Citigroup each posted sizable jumps in the revenue stream compared with the second quarter of last year.
The revival provided a boost to those banks at a time of rising challenges for their Main Street consumer operations.
Goldman is even more reliant on Wall Street for its performance.
Its investment banking fees rose 21% from a year ago, to $1.7 billion, led by big jumps in debt and equity underwriting. Advisory fees were also up, by 7%.
Goldman's investment banking performance did drop when compared to the first quarter. Fees dipped by 17%.
What propelled its second-quarter earnings higher from a year ago was Goldman's trading operations as well as its increased focus on asset and wealth management.
Goldman’s fixed-income trading revenue rose 17% year over year, while asset and wealth management revenues increased 27%.
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