Goldman Sachs reported fourth-quarter results on Wednesday that exceeded expectations due to stronger-than-expected trading revenue. The bank’s profit 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. The company’s shares surged over 5% in morning trading.
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 the estimate by nearly $300 million. Investment banking fees of $2.05 billion were in line with the estimate. The asset and wealth management division also performed well, with revenue increasing by 8% to $4.72 billion, surpassing estimates by $560 million.
Goldman Sachs CEO David Solomon expressed confidence in the company’s performance, 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.” The bank has benefited from a resurgence in Wall Street deals, with its shares rising by almost 50% last year, outperforming its competitors. The Federal Reserve’s easing cycle and the election of Donald Trump in November have boosted expectations for mergers and stock deals.
Solomon’s current position contrasts sharply with the challenges he faced a year earlier when the bank shifted focus away from consumer finance. At that time, Solomon was under pressure to address losses related to consumer finance and navigate a slowdown in Wall Street deals due to rising rates and increased regulatory scrutiny.
On the same day, JPMorgan Chase, Wells Fargo, and Citigroup are also releasing their results, while Bank of America and Morgan Stanley are scheduled to report on Thursday.
